Turkey looks to speed up exploration

Exploration: Turkey aims for energy independence

Turkey is drilling for oil and natural gas with more rigs than any European country and plans new rules in 2013 to speed exploration of energy supplies, according to a report.

Turkey fielded 26 rigs as of 31 December, according to data compiled by Bloomberg, and the number has since risen to 34, Energy Ministry officials said this week.

Turkey has leapfrogged Norway as offshore drilling increased in the Black and Mediterranean seas. Spending on exploration jumped to $610 million last year from $42 million a decade earlier, the news wire reported.

With economic growth forecast at 3.5% this year and about twice the pace of the most advanced economies to 2017, Turkey is drilling for its own energy to ease reliance on imports from Iran, Iraq and Russia.

State-owned Turkish Petroleum (TPAO) has taken supermajors Shell and ExxonMobil as partners, after neighbouring Israel and Cyprus made some of the decade’s biggest gas finds in the past three years.

“If there’s one country that needs energy, it’s Turkey,” Darren Engels, an analyst at FirstEnergy Capital in Calgary, told Bloomberg. “Their domestic business doesn’t scratch the surface.”

TPAO – which has operations in Libya, Iraq, Azerbaijan, Colombia and Kazakhstan – needs to boost domestic output as it pursues a target of supplying all of Turkey’s energy needs by 2023.

Turkey had proved reserves of 307 million barrels of oil and gas in 2010, 88% of which is oil, according to Engels. In 2011 alone, the country consumed about 258 million barrels, according to the EIA.

To speed up the search for oil and gas, the government submitted a draft Petroleum Law to Parliament on 21 December. The bill calls for changes to “ensure speedy, continuous and efficient search of carbon resources”, requiring companies to pledge 2% of their projects as collateral to extend licenses.

“Our aim is to make Turkey one of the 10 largest economies in the world by 2023,” Energy Minister Taner Yildiz told Bloomberg. “Finding energy (will) enable Turkey to achieve its goal.”

Turkey imported about 92% of the oil it consumed in 2011 and 98% of the natural gas, according to the US Energy Information Administration.

In the past, TPAO was designated as the national company tasked with searching and drilling oil and gas reserves in the country. The draft law no longer defines TPAO as such and in theory it will be treated like any other company, Necdet Pamir, head of Energy Studies Group at Ankara-based Chamber of Petroleum Engineers, told Bloomberg.

TPAO is just one of the contributors to the domestic drilling boom. Shell, ExxonMobil and smaller explorers such as Transatlantic Petroleum and Anatolia Energy are also investing.

The Turkish government “is doing everything it can to attract the foreign majors,” said Timothy Ash, head of emerging-market research at Standard Bank Group.

TPAO and Shell plan to start drilling off the coast of Antalya in the Mediterranean in 2015, Yildiz said.

“TPAO is also planning to drill in the Black Sea in Kuskayasi field in 2014, which was abandoned by Chevron. Obviously, it would be cheaper if it can find a partner.”

Energy officials in the ministry say the complex geology of Turkey makes it more difficult to find large reserves compared with neighbours.

The Mediterranean and Black Sea regions are more likely to hold gas, while the southern part of the country is more likely to hold oil, said FirstEnergy’s Engels.

Turkey produced 2.3 million tons of oil in 2012. The average production is 44,000 barrels per day, according to official figures. In contrast, Norway produced about 2 bpd in 2011, according to BP’s Statistical Review of World Energy. Russia produced 10 million bpd.

TPAO’s share in production of oil at home was 69% in the first 11 months of 2012 with the rest divided among others such as Perenco, Tiway Oil of Norway, Amity Oil International, Transatlantic Petroleum and Aladdin Middle East.

via Turkey looks to speed up exploration – Upstreamonline.com.