TURKEY - The Oil Producers.

There are four oil producing companies in Turkey and many others are exploring (see exploration background in Gas Market Trends). Most of the fields produce from Upper Cretaceous reservoirs.

Producers of natural gas include the state oil company, BP and Amity Oil of Australia (see Gas Market Trends)

Turkiye Petrolleri Anonime Ortakligi (TPAO), the state-owned oil producing firm, accounts for 55% of the oil output in Turkey with its production in the first quarter of 2006 averaged 21,250 b/d, down from 25,325 b/d in the first quarter of 2004. This compares with 37,470 b/d in the first quarter of 2002, 54,400 b/d in 1997-98, about 52,250 b/d in 1996 and 50,000 b/d in 1995.

TPAO has more than 45 oilfields producing in four south-eastern districts - Si'irt, Diyarbakir, Gaziantep and Adana. From 1994 to mid-1998, TPAO found about 2-3 fields every year.

TPAO was set up in 1954 as took over from the State Minerals Exploration Institute (MTA). MTA had made Turkey's first major oil discovery at Raman in 1945 and had found the Garzan field close to Raman in 1951. Since then TPAO has made many discoveries, partly with the help of foreign experts.

Marking its 50th anniversary in 2004, TPAO said in its website it had been founded by Law No. 6327 with the responsibility of being involved in petroleum exploration, drilling, production, refinery and marketing as Turkey's sole national company (NOC). TPAO built the Batman, Izmit, Aliaga and Middle Anatolia refineries, pipelines on Batman-Dortyol, Kerkuk-Yumurtalik, Yumurtalik-Kirikkale routes, Shelmo-Batman inter-field sections, Adiyaman-Saril pipelines, and was engaged in marine-transportation by DITAS-1, TPAO-1 oil tankers and the IGSAS-Istanbul Fertiliser Industry Inc. It contributed to the construction of Yarimca and Aliaga petrochemical complexes as their major shareholder (see DT No. 19).

As a result of studies on restructuring the public oil sector in 1983-84, TPAO became a State Economic Enterprise (SEE) with a capital of 500 bn liras, active on oil and gas E&P. It was also active in pipeline and marine transport, refining, distribution and marketing, through its four units: Botas, for transportation by pipelines; Ditas, for transportation by marine tankers; Tupras for oil refining; and Petrol Ofisi (POAS), for products marketing. POAS and Tupras have since been privatised (see DT No. 18).

In 1988, IGSAS became a unit of TPAO. The company said in its release on the occasion of it 50th anniversary: TPAO, having raised its capital to 1 tn liras in 1989 and to 3 tn liras in 1991, was among the 50 biggest private and public companies in the world "contributing to the global economy... In compliance with the privatization policy of the State Economic Enterprises, Tupras, Botas, Ditas and Igsas were...[transferred] to the Prime Ministry Public Partnership Administration Directorate in 1990, 1990, 1993 and 1998, respectively. In 1995, Botas was separated from...TPAO and became an independent company.

In 1988 TPAO founded the Turkish Petroleum International Co. (TPIC) to operate overseas in oil and gas E&P ventures in line with government policy. In the early 1990s Turkey's relations with Central Asian republics for E&P developed and TPAO signed international agreements with Kazakhstan and Azerbaijan. The KazakhTurkMunay Joint Co. (KTM) was founded under an agreement on Jan 9, 1993 and the BP-led Azerbaijan International Operating Co. (AIOC) agreement in Baku was signed in September 1994 to develop three giant oilfields in the Azeri sector of the Caspian Sea.

TPAO has been structured to having its HQ in Ankara and three district managements in Adiyaman, Batman and Thrace.

TPAO has international activities through TPIC, TPOC (Turkish Petroleum Overseas Co.), TPBTC (Turkish Petroleum BTC Ltd - for the Baku-Tblisi-Ceyhan crude oil pipeline on stream since late 2005) and TPSCP (Turkish Petroleum SCP Ltd - for the South Caucasus Pipeline for natural gas from Azerbaijan to Turkey, to be on stream in late 2006), KTM and its stake in AIOC.

TPAO does not have a monopoly on any segment of the national petroleum business and applies to the Energy Ministry's General Directorate of Petroleum Affairs for permits on the same basis as private Turkish and foreign companies. TPAO has done extensive seismic and exploration work in many of the favourable licence areas in Turkey. The company dominates the Turkish petroleum sector.

The government co-ordinates with TPAO and its exploration work due to the rising oil and gas needs of Turkey. In turn, the company assists in the development of the government's energy policy and provides the required technical assistance.

During the years 1954-2004, 70% of the geological surveys, 75% of the geophysical surveys, 76% of total drilling in Turkey was done by TPAO. TPAO produced 55% of total crude oil and 93% of total natural gas in Turkey.

           MAIN OIL & GAS FIELDS IN TURKEY

Field        Operator Dscvry  Nature     API     Wells Rsrvoir Depth (ft)
Petroleum District 10 - Si'irt
 Raman         TPAO    1945     O      18.8 deg.   8   UC       4,500
Garzan         TPAO    1951     O      25 deg.    11   UC       4,700
Germik         TPAO    1958     O      19 deg.    10   UC       6,500
Kurtalan       TPAO    1961     O      33.2 deg.  18   UC       5,750
Magrip         TPAO    1961     O      18.4 deg.  20   UC       5,700
Raman W.       TPAO    1961     O      13.3 deg.  96   UC       4,200
Silivanka      TPAO    1962     O      21-25 deg. 18   UC       8,200
Celikli        TPAO    1964     O      35.2 deg.  21   UC      10,500
Selmo(Mobil)   TPAO    1964     O      34.4 deg.  30   Pa       5,800
Malahermo      TPAO    1965     O      33 deg.   susp. UC        n.a.
Dodan          TPAO    1965     O      36 deg.   susp. UC        n.a.
Magrip N.      TPAO    1969     O      27 deg.   susp. UC        n.a.
Yolacan        TPAO    1970     O      19 deg.    n.a. UC        n.a.
Sezgin         TPAO    1970     O      17 deg.   susp. UC       5,600
Oyuktas        TPAO    1972     O      31 deg.   susp. UC       7,600
Yasince        Aladdin 1974     O      29 deg.   n.a.  UC        n.a.
Molla          Aladdin 1974     O      n.a.      susp. MC        n.a.
Camurlu        TPAO    1975     O/G    12.2 deg.  30   T/UC     5,600
Ikiztepe       TPAO    1976     O      11.3 deg. susp. UC       4,900
Beycayir       TPAO    1976     O      26.1 deg.  13   UC       7,700
Selmo W.(Mobil)TPAO    1981     O      34 deg.   n.a.  Pa       6,000
Dincer S.      TPAO    1981     O/G    16.7 deg.  18   UC       5,350
Kozluca W.     TPAO    1985     O      12 deg.    29   UC       5,000
Selmo          Petrom  2000     0      n.a.      n.a.  Pa        n.a.

Nature: O = Oil; G = Gas
Age of Reservoir: L = Lower; M = Middle; U = Upper
                  C = Cretaceous; Co = Coniacian; J = Jurassic; T = Triassic;
                  Mi = Miocene; P= Paleozoic; Pa = Paleocene; S = Santonian

District 11 - Diyarbakir
Kayakoy        (Shell) Perenco 1961   O  38.2 deg. 27    UC     n.a.
Kayakoy S.     TPAO            1961   O  30.4      n.a. T/Pa   8,600
Kayakoy W.     (Shell) Perenco 1961   O  34.7      29   T/Pa    n.a.
Kurkan         (Shell) Perenco 1963   O  31.4      35   UC      n.a.
Beykan         (Shell) Perenco 1964   O  33.2      48   UC     4,800
Sahaban        (Shell) Perenco 1966   O  33.2      13   UC      n.a.
Kurkan S.      (Shell) Perenco 1967   O  34.5      10   UC      n.a.
Malatepe       (Shell) Perenco 1970   O  32.7      15   UC      n.a.
Katin          (Shell) Perenco 1971   O  29.5       8   UC      n.a.
Malatepe W.    (Shell) Perenco 1972   O  33.9    susp.  UC      n.a.
Kock           (Shell) Perenco 1972   O  27.4     n.a.  UC      n.a.
Barbes         (Shell) Perenco 1972   O  30        22   UC      n.a.
Yatir          (Shell) Perenco 1973   O  31.1    susp.  UC      n.a.
Sebyan         (Shell) Perenco 1973   O  33.4     n.a.  UC      n.a.
Saricak        TPAO            1973   O  31.5       7   UC     5,250
Saricak S.     TPAO            1973   O  31.5      13   UC     5,250
Yenikoy        TPAO            1973   O  31.3      20   UC     6,400
Yenikoy E.     (Shell) Perenco 1973   O  31.3       2   UC      n.a.
Yatir E.       (Shell) Perenco 1974   O  30.9      11   UC      n.a.
Cabantepe      (Shell) Perenco 1975   O  32.8    n.a.   UC      n.a.
Sivritepe      TPAO            1977   O  33.4       4   UC     8,200
Sahaban S.     TPAO            1978   O  34.5       5   UC      n.a.
Sincan         (Shell) Perenco 1980   O  31.2       9   UC      n.a.
Mehmetdere     TPAO            1982   O  31         2   UC     6,700
Kartaltepe     TPAO            1982   O  31         5   UC     6,550
Alcik          TPAO            1983   O  34         4   UC     6,500
Kervan         (Shell) Perenco 1983   O  30       n.a.  UC      n.a.
Firat West     TPAO            1984-5 O  n.a.     n.a.  Mi/UC   n.a.
Bectar        (Shell) Perenco  1985   O  n.a.     n.a.  UC      n.a.

District 12 - Gaziantep
Kahta          Aladdin         1958   O  11.5 deg. 25    Co/S  3,500
Piyanko       (Shell) Perenco  1968   O  35.5       3    UC     n.a.
Adiyaman      TPAO             1971   O  27.6       8    UC    5,800
Adiyaman N.   TPAO             1977   O  20.4    susp.   UC    9,500
Adiyaman S.   TPAO             1977   O  32      susp.   UC    5,000
Bolukyala     TPAO             1977   O  35.3    susp.   UC   10,300
Cemberlites   TPAO             1983   O  30.5      24    MC    6,500
Kahta W.      Aladdin          1985   O  n.a.     n.a.   Co/S   n.a.
Kucukpirin    TPAO             1985   O  n.a.     n.a.   MC     n.a.
Cukurtas      TPAO             1985   O  36         3    UC   10,000
Akpinar       TPAO             1985   O  31.6       6    UC   10,500

District 14 - Adana Basin
Bulgurdag     (Mobil) TPAO     1960   O37.9 deg.    4    M/P   4,300

By end-2004, TPAO's cumulative oil production from its domestic and international fields had reached 510m barrels, and natural gas production was 6.8 BCM. The annual hydrocarbon production of 20.2m barrels in 2004 was planned to reach 55.1m barrels in 2009.

Turkey's first underground natural gas storage project at Silivri, with a 1.6 BCM capacity (about 8% of Turkey's consumption), started up recently.

The projection for gas injection rate to Kuzey Marmara and Degirmenkoy fields during the low season is 9.5 MCM/day, while the output is 11.5 MCM/day during high seasons.

In 2004, TPAO established its "vision and mission for meeting Turkey's continuously increasing oil and natural gas demand through domestic and international exploration and production means" and had a boom in domestic investments in recent years by extending its activities to unexplored basins onshore and offshore. These and TPAO's external assets should boost its oil and gas output to 300,000 b/d of oil equivalent by 2010 and 600,000 b/doe by 2020.

In August 2004 TPAO's partner Madison Oil of the US, a unit of Toreador Resources of Dallas, made a commercial gas discovery at its Ayazli-1 well in shallow waters in the western part of Turkey's Black Sea zone. In 2005, the Akkaya-1,2 and Ayazli-3-2 wells resulted in major natural gas finds. These are to become major gas producers from late 2006 (see Gas Market Trends of this week).

In the TPAO-BP venture in the Eastern Black Sea, the drilling of the first dee-water well started in July 2005. In parallel to that, TPAO-BP has since farmed into an adjacent block in the Georgian sector of the Black Sea, where Anadarko of the US had been operating.

TPAO has since been in contract with major IOCs for taking up new offshore blocks along Turkey's Black Sea coast (see Gas Market Trends of this week).

TPAO's output includes about 2,350-2,500 b/d of production taken over in 1994 from Mobil (now ExxonMobil), when the US major sold its share of fields to the state firm. Mobil withdrew from the Si'rt province partly because its Selmo fields were small and partly in view of attacks by Kurdish rebels.

The other oil operators in Turkey together have been producing about 18,250 b/d, up from 11,655 b/d in the first quarter of 2004, compared to about 9,980 b/d in the first quarter of 2002, 15,600 b/d in early 1998 and about 13,750 b/d in the first quarter of 1996.

Perenco, a company based in Paris and London, has 27 fields in the districts of Diyarbakir and Gaziantep, together producing 9,000 b/d, up from 7,000-8,000 b/d in the first quarter of 2004 but down from 11,800 b/d in April 2000, 15,000 b/d in early 1998 and 13,400 b/d in the first quarter of 1996. Its fields are operated by Shell.

NV Turkse Shell, operating in Turkey's upstream sector since the late 1950s, sold these fields to Perenco in late 1995 (see profiles of these fields in the tables on the previous page).

Shell continues to explore for oil in Turkey and is also investing in the country's power sector through InterGen (Shell/Bechtel). In 1998 Shell sold its 27% stake in the Atas refinery (80,000 b/d) and its Turkey products distribution business (see Downstream Trends).

Perenco has tried but failed to increase production to 20,000 b/d, a level it was hoping would be reached after it acquired the fields from Shell. But it has been under government orders not to inject into the Midyat drinking water reservoir. This is near Diyarbakir city, with polluted water having come out of redundant wells. In late 1991, Shell had been asked by the government to pump the water back into the same well.

Aladdin Middle East, a Turkish company owned mostly by private groups, has several fields in Si'irt and Gaziantep together now producing about 6,650 b/d, up from 600 b/d in early 1998 and compared to 350 b/d in early 1996.

The partners in the Aladdin venture now are Aladdin (55.5%), JKX Oil & Gas of the UK which in May 2005 farmed in and got a stake of 30%, Avenue Energy (9.5%) and Ersan Petrol Sanayii (5%). By farming in, JKX is to benefit from the Karakilise block, where an oilfield was found in 2003 with 60m barrels. This is near the city of Diyarbakir.

The first of Aladdin's fields, Kahta in Gaziantep, was found in 1958 by American Overseas Co. (Amoseas). Later Amoseas sold this to the Ersan family and Aladdin which eventually discovered three other fields with the help of foreign experts.

Petrom of Romania is producing about 2,600 b/d in the Selmo block, in the south-eastern district of Batman. It found oil in October 2000 when it said it planned to produce up to 4,000 b/d. However, production has since declined. The field requires an EOR system. Petrom has been exploring for oil in the same block, trying to boost production, and has acquired other tracts where exploration efforts are underway.