Turkey’s Black Sea Gas Push Relies Heavily on Foreign Credit

Turkey’s ambition to accelerate natural gas production in the Black Sea is increasingly drawing attention due to its financing structure. While the government has allocated a massive budget to Turkey’s state energy company, the reliance on foreign borrowing has raised questions about both economic sustainability and political timing.

The ruling administration has earmarked ₺332.6 billion for the Turkish Petroleum Corporation (TPAO) to intensify oil and natural gas exploration and production. However, nearly ₺196 billion of this funding is expected to come from imported foreign credit, making external financing the initiative’s dominant pillar.

The scale and structure of the funding have fueled debate in Ankara, with critics suggesting the move could be aimed at accelerating visible energy output ahead of a potential early election. The strategy is being interpreted by some observers as an attempt to align energy discoveries with political narratives centered on “domestic and national” production.

Sakarya Gas Field Takes the Largest Share

The largest portion of the budget has been directed toward the Sakarya natural gas field in the Black Sea, which remains the centerpiece of Turkey’s offshore energy ambitions. A total of ₺211.4 billion has been allocated to complete drilling and production infrastructure in this field alone.

Crucially, ₺195.7 billion of this amount will be financed through foreign-sourced loans, underscoring the extent to which Turkey’s flagship energy project depends on external capital. The funds are intended to support an extensive operational agenda, including deep-sea exploration and large-scale production drilling.

Planned activities under this financing package include 7,620 meters of exploratory drilling, geophysical surveys covering more than 1.8 million hectares, the completion of 39 offshore wells, and 131,345 meters of production drilling. These efforts aim to accelerate output timelines and expand recoverable reserves in the Black Sea.

Phase-2 and Phase-3 Development Plans

Beyond initial drilling, the Sakarya field’s expansion will continue through Phase-2 and Phase-3 development projects, each with its own funding structure combining foreign loans and limited domestic contributions.

Approximately ₺69.9 billion in foreign credit has been allocated to Phase-2, supplemented by ₺1.2 billion in domestic resources. This brings the total investment for Phase-2 to ₺71.1 billion, targeting infrastructure expansion and upgrades to production capacity.

Meanwhile, Phase-3 is set to absorb the largest share of imported financing. Around ₺125.8 billion in foreign loans will be used for this stage, with an additional ₺5 billion from local sources. The total investment value of Phase-3 is projected to reach ₺130.3 billion, signaling a long-term commitment to scaling production rather than maintaining pilot-level output.

These phases are designed to move the Sakarya field toward sustained commercial production, positioning it as a core component of Turkey’s energy supply strategy.

Nationwide Exploration and Production Efforts

While the Black Sea remains the primary focus, TPAO’s investment program extends well beyond offshore projects. The remaining ₺107.2 billion of the total budget has been allocated to oil and gas exploration and production activities nationwide.

These funds will support exploration work in 22 provinces and active production in 12 provinces, reflecting a nationwide push to expand hydrocarbon output. Approximately ₺87 billion will be spent on exploration drilling, seismic and geological surveys, and the completion of 215 wells.

The remaining ₺18.5 billion is earmarked for production activities, with targets including 273 million cubic meters of natural gas and 47.5 million barrels of crude oil. This phase also involves completing 77 production wells and drilling 164,000 meters of production-focused boreholes.

Political and Economic Implications

The heavy reliance on foreign credit has become a focal point of debate, particularly given the government’s frequent emphasis on energy independence. Critics argue that financing “domestic” energy production with imported loans creates a structural contradiction, especially at a time when Turkey is seeking to limit external vulnerabilities.

At the same time, the timing of the investment surge has drawn political scrutiny. Large-scale energy announcements have historically played a role in election narratives, and the accelerated pace of spending has fueled speculation that the administration is positioning energy output as a campaign asset should early elections be called.

From an economic standpoint, the strategy represents a high-stakes bet. If production ramps up as planned, domestic gas output could help reduce energy imports and ease pressure on Turkey’s current account. However, delays, cost overruns, or weaker-than-expected reserves could amplify debt exposure and strain public finances.

As TPAO moves forward with its ambitious drilling and production agenda, the balance between energy security, financial risk, and political signaling will remain under close scrutiny by markets, policymakers, and voters alike.