Norway's Equinor to exit onshore Turkish gas play: Valeura

London — Norway's state-controlled Equinor has opted to exit a joint venture with Canadian explorer Valeura Energy to develop a potential 10.1 Tcf (285 Bcm) unconventional gas play in northwestern Turkey, Valeura said Tuesday.

Valeura has been working in partnership with Equinor to develop the unconventional gas accumulation at the Banarli block in the Thrace Basin following a successful exploration well -- Yamalik-1 -- in 2017.

An appraisal well, Inanli-1, was drilled at the site in 2019, and Valeura said subsequent flow tests from the well had been "encouraging" despite flowing only small volumes of gas.

"Valeura has received notification from its joint venture partner Equinor indicating that it intends to discontinue participation in the deep gas appraisal program," Valeura said in a statement.

Equinor could not be reached for immediate comment Tuesday.

Valeura said it had begun discussions with Equinor on the commercial mechanism by which the Norwegian company would exit the play, adding that it would provide more detail in due course.

Commercial development

Valeura said it intends to deploy capital in a "judicious manner" in 2020, and expects to continue its deep gas appraisal program aimed at demonstrating the potential for commercial development.

"We are sorry to see Equinor discontinue their participation in the deep play," Valeura CEO Sean Guest said.

Guest said the company had gathered a "significant volume" of new data and key learnings about the attributes of the large gas resource base.

"We will leverage these data in the next phase of appraisal and we remain encouraged about the long-term potential for the play."

Turkey is almost entirely dependent on imports from Russia, Iran and Azerbaijan -- as well as imports of LNG -- to meet gas demand of around 50 Bcm/year.

Valeura -- created in 2010 when it changed its name from PanWestern Energy -- has made Turkey its primary geographic focus and has 20 exploration and production licenses.