TURKEY - The Black Sea.

In offshore areas of Turkey in the Black Sea, TPAO has a number of blocks on offer for exploration. They are rich in oil and natural gas, judging by discoveries made there. TPAO is also looking for potential Western partners to farm into its large deep-water Blocks 3532 and 3533 in the eastern part of the sea, as well as Blocks 3678 and 3480 in the western Black Sea.

The Black Sea has a unique, two-layer hydrographic structure. The surface layer of low salinity water is about 100 metres thick, overlying an 1,800 to 2,000-metre layer of brackish water which is black and almost lifeless. Below 200 metres, there is a switch from dissolved oxygen to hydrogen sulphide.

BP, in partnership with TPAO, is leading deep-water exploration in both the Turkish and Georgian sectors of the Black Sea. BP is TPAO's 50% operating partner in Block 3534. In mid-June 2005, BP spudded its first appraisal well on that block, about 120 km north-east of the Turkish city of Trabzon, and was to drill two wells 4,600 metres below the seabed in water depths ranging from 1,100 to 1,300 metres. These were the first deep-water drilling activities in the Black Sea, representing a significant challenge in exploration technology and investment in what is viewed as a geological and ecological frontier.

BP had already collected extensive 2D seismic covering Block 3534's entire 18,000 sq km tract between 1991 and 2002, and 1,163 sq km of 3D seismic in 2003. Based on information obtained from the data, BP and TPAO farmed into an adjacent deep-water block in the Georgian sector. About half the size of Block 3534, this covers about 80% of Georgia's territorial waters and had been explored by Anadarko of the US.

The production sharing agreement (PSA) for the Georgian block now is held by Anadarko (48%). BP (38.5%) and TPAO (13.5%). But Anadarko's UK partner in this block, JKX Oil & Gas, retains a 4% net profit interest. BP has also assumed operatorship of the block. The Georgian government has a 12% "Back-in option" at the expense of Anadarko in the event of a confirmed commercial discovery.

The Georgian block and Block 3534 share similar geological formations which extend from north to south and from Georgian to Turkish waters. A number of structures have been identified there. Upstream on April 29, 2005, said that each of these potentially contained several billion barrels of oil. It said the cost of each well there may vary between $45-50m.

The shallow-water blocks in the Black Sea have proved to be rich in natural gas. TPAO in June 2005 received another boost with the discovery of a commercial gas field there. The focus of attention has since switched to an eight-block licence covering nearly 4,000 sq km operated by Toreador Resources of Texas through its Madison unit. The company then revealed its Akkaya-1 well as its second gas discovery, news which was sufficient to send Toreador's shares up by 23.5% to close at US$21.48 on the Nasdaq.

The well is productive from the Eocene Kusuri formation, a Tertiary sequence which also flowed gas in the Ayazli-1 just 7 km to the north-west and in the nearby Akcakoca-1 well drilled by TPAO in 1976. Madison estimated 47m of net pay. The Akkaya-1 well was temporarily suspended as further development activity in the South Akcakoca SubBasin continued thereafter.

The rig, "Prometheus" J/U, was moved to a new location which is an immediate offset to the Ayazli-1. The results of Akkaya-1 backed Toreador's previous estimate of reserves in South Akcakoca of about 350 BCF of gas.

Ayazli-1 was completed in September 2004 after testing a combined 15 MCF/day flow from four zones. Toreador holds a 36.75% interest in this licence and is partnered by Stratic of Canada (12.25%) and TPAO (51%).

Toreador in June 2005 said it had the option to drill five wells - in addition to its three-well programme - using the same rig and had earlier claimed to have identified six prospects with reserve potential per prospect ranging from 100 BCF to 1 TCF.

Toreador's eight tracts are grouped into Blocks 3498 to 3505, in District II. Akkaya-1 is in Block 3500, located around 11 km east of Ayazli-1 well in which multiple tests were conducted at depths of 647-967 metres. Madison is still drilling in the Akcakoca area.

Several companies are exploring for oil and gas in Turkey's 18 Petroleum Districts. A decline in exploration since 1995 has led to a fall in oil production. Peak output in Turkey's oil history was reached at 90,400 b/d in 1991. Only about 1,450 exploration and appraisal wells have been drilled in the whole country since 1961. The Turkish portion of the Arabian Basin is less explored with fewer wells per acre drilled than in the rest of the basin.

In 1995 Shell cut its exploration considerably and sold its interests in 27 fields to Perenco, a multinational group based in Paris and London. Mobil (now part of ExxonMobil) has done the same. But both have remained active in Turkey's upstream and downstream sectors (see Vol. 62, No. 16).

Exploration for oil in Turkey dates back to the 1880s, with small discoveries made years after Baku, capital of Azerbaijan, began to be called "a new Texas" for the Russian empire. Exploration was resumed after World War I, and the first commercial oil find was made in 1945 at Raman in the south-eastern district of Si'irt. But it was not until the early 1950s, six years after World War II, that oil production began.

The explorer at the time was Turkey's State Minerals Exploration Institute (MTA). With the help of some Western experts, MTA found oil at Garzan in 1951, also in Si'irt close to Raman. But its work did not satisfy Ankara. The state formed Turkiye Petrolleri Anonime Ortakligi (TPAO) in 1954 to take over from MTA, to invite foreign firms to explore for oil and produce it as partners, and to handle the downstream sector.

Many fields were found in the subsequent years. In 1958, a JV with American Overseas Co., called Aladdin/Amoseas (now known as Aladdin), had an oil find at Kahta. The field was small, containing heavy 11.5 deg. API oil, and the US firm later sold its stake to a group of private Turkish interests represented by a company called Ersan, which later was called Aladdin. Aladdin as operator found other oilfields in the subsequent years (see Part 2 in next week's Review).

Mobil came in during the late 1950s and in 1960 found the Bulgurdag field containing 37.9 deg. API oil in the Adana Basin of District 14. It was the first discovery of high quality oil in Turkey. Shell came in during the late 1950s and later found many oilfields (see Part 2).