PETROLEUM EXPLORATION
IN TURKEY
Mesut ATALAY
Yerbil Geological Services Ltd.
Turkish Association of Petroleum Geologists,
Member of Executive Committee
1. Introduction
Petroleum sector is made of a chain
of different activities. These activities
can be divided into two main groups.
The group that includes exploration
and production activities is called
as "upstream" and the one
that includes post-production, that
is, transportation, refining, storage
and distribution activities is called
as "downstream" activities.
The exploration activities, which form
the first chain of the petroleum sector,
include geological, geophysical and
drilling works performed for the purpose
of finding petroleum and gas. These
works start with compilation of all
existing geological, geophysical and
subsurface data from wells related to
the exploration area and the sedimentary
basin, which includes the exploration
area. These data, which were produced
by different institutions for different
purposes in different times, are to
be evaluated continuously to enlighten
the subsurface geology both in local
and regional scale. The megascopic geological
features as large as tens or hundreds
of kilometers, e.g., the North Anatolian
Fault Zone, the East Anatolian Fault,
are complied and evaluated along with
the reservoir parameters of microscopic
features, such as porosity and permeability,
and the chemical features in the order
of ppm (part per million). The purpose
is to outline the subsurface in detail
as much as possible. The exploration
wells are drilled in prospect areas
determined as favorable for the formation
of petroleum reserve in the exploration
area, which is continuously re-evaluated
under the light of accumulating new
information. If a petroleum accumulation
of economic size is encountered, this
means a new oil field is discovered
and production activities start with
drilling the extension wells and production
wells to develop the field. If the exploration
well results negative and there is no
other drilling potential in the exploration
area, then that exploration license
is relinquished according to the articles
of Petroleum Law.
2. History Of Petroleum Exploration
In Turkey
The history of petroleum exploration
in Turkey extends into the Ottoman period.
The first exploration activity with
drilling is the shallow wells with gas
show drilled in the Çengen area near
Iskenderun in 1890 (1). Oil and gas
shows were encountered in shallow wells
drilled in 1898 around Ganos in Thrace.
Turkish Petroleum Company was established
jointly by foreign companies in 1914,
but stopped its operation due to First
World War.
Following the foundation of the Republic,
Government made a decision, as a principle,
to explore himself the petroleum resources
in Turkey. For this purpose, in accordance
with the Petroleum Law No 792 enacted
on 24 March 1926 the right to explore
and produce all petroleum and petroleum
related materials within the boundaries
of Republic of Turkey was given to the
Government provided that the rules of
the Mining Law will be obeyed. Although
the first geological survey initiated
in this period, the exploration activities
started significantly after the establishment
of Petroleum Exploration and Operation
Management on 20 May 1933 with the Law
No 2189. Baspirin-1 well drilled to
a total depth of 1351 meters around
Midyat between 13 October 1934 and 15
June 1936 has been considered as the
first deep well drilled in Turkey.
Petroleum Exploration and Operation
Management was attached to Mineral Research
and Exploration Institute (MTA), which
was founded on 22 June 1935 by the Law
No 2804, and the petroleum exploration
activities were conducted by MTA afterwards.
The main duties of MTA in its Law was
" to search the existence of mines
and rock quarries suitable for exploitation
in the country, the conditions of more
feasible exploitation of mines and quarries
being exploited and in this connection
to conduct exploration operations, scientific,
geological and technological research,
to prepare maps, plans and sections,
to conduct projects, scientific reports
and feasibility studies, and to train
the qualified personnel for the mining
sector" (2) and MTA carried out
extensive work in those days conditions
to execute these duties. The petroleum
exploration activities were conducted
in Southeast Anatolia, Iskenderun, Adana,
Van and Thrace through geological, geophysical
and drilling operations.
Petroleum was encountered in the Raman-1
well drilled south of Batman in 1940
and commercial discovery of petroleum
was made in Raman-8 drilled in 1945.
Garzan field was discovered in 1951
following the discovery of petroleum
in the Raman field. After constructing
the refinery of 3 tons per day capacity
in the Maymune area in the Raman field,
another refinery with 200 tons per day
capacity was constructed in Batman in
1948, of which the capacity was increased
to 330 000 tons per year in 1955
As the petroleum activities attained
their own legal frame through the Petroleum
Law No 6326 on 7 March 1954, they were
also opened to domestic and foreign
private capital. Turkish Petroleum Corporation
(TPAO) was founded by the Law No 6327
on the same day and the relevant units
of MTA was connected to TPAO. The control
of application of Petroleum Law was
given to Petroleum Administration that
was established by the Petroleum Law
and the name was later changed to General
Directorate of Petroleum Affairs.
In the Republican time, 37 exploration,
7 extension, 13 production and 19 test
wells, as a total of 76 wells were drilled
and 95 881 tons of petroleum was produced
totally during the 20 years period between
the drilling of first well in 1934 and
legislation of Petroleum Law in 1954
(3)
The Petroleum Law was amended a few
times depending on the economic and
political conditions of the time, of
which the amendment with Law No 1702
on 18 April 1973 was statist and the
amendment with Law No 2808 on 30 March
1983 was liberal. The foreign petroleum
companies rushed into Turkey with the
legislation of the Petroleum Law which
is a liberal law in general.
The ten-year period following the legislation
of Petroleum Law is considered as the
first peak period. Drilling activities
increased following the increase in
the geological and geophysical surveys
and several oil fields were discovered.
While the geological and geophysical
works made a peak in 1958 with 164 crew-month
of geological and 157 crew-month of
geophysical survey (4), drilling activities
increased continuously until 1965 (Figure
1). While TPAO was discovering new fields,
Kahta field as the first discovery of
foreign companies was discovered by
California Asiatic company. Mobil discovered
its first field, Bulgurdağ, in 1960
and its main field,
The external dependency in the gas
market is stronger and the gas business
depends almost fully to importation.
The Hamitabat and Kumrular gas fields
discovered in 1970 by TPAO in Thrace
were followed by other fields discovered
in 1980's and 1990's. The produced gas
was restrictedly consumed in production
of electricity and in local industry
and gas consumption was restricted for
a long time since the substructure and
the market was not established in regional
and country scale. The importation of
gas initiated in 1987, the annual importation
of gas increased rapidly in accordance
with the importation contracts and its
usage became extensive. The domestic
production of gas, which increased to
731 million tons in 1999, has been decreased
to 311 million tons in 2001 due to economic
reduction in recent years and to importation
contracts based on irrational prediction
of demand. The gas importation was 15.52
billion cubic meters and the consumption
was 15.83 billion cubic meters.
A total of 5 963 507 meters of drilling
was carried out in 3015 wells as of
end 2002 in Turkey. The distribution
of these wells according to types is
given in Table 1. The analysis of Table
1 indicates that, of the exploration
wells, 60% was drilled by TPAO, 5.4%
was drilled by MTA, 0.3% was drilled
by other domestic companies, 28% was
drilled by foreign companies and 6.3%
was drilled jointly by domestic and
foreign companies.
Table 1- Distribution of wells
drilled in Turkey as of 31.12.2002
| Companies |
Explor |
Extens. |
Prod. |
Inject. |
Strat.
Test |
Total |
| TPAO |
681 |
320 |
991 |
23 |
37 |
2052 |
| MTA |
61 |
8 |
15 |
- |
20 |
104 |
| Other
domestic comp |
4 |
1 |
16 |
- |
18 |
39 |
| Foreign
companies |
317 |
110 |
253 |
- |
5 |
685 |
| Joint
foreign+domestic |
72 |
31 |
24 |
7 |
1 |
135 |
| Total |
1135 |
470 |
1299 |
30 |
81 |
3015 |
The most conspicuous feature of Table
1 is that activity of domestic companies
is almost negligible. The domestic capital
should be encouraged to be more active
the highly risky petroleum exploration
with a smart exploration policy instead
of being unwillingly.
3. Importance Of Petroleum Exploration
The petroleum sector is made of a chain
of different activities from exploration
to marketing. Each of these rings of
the chain is a large activity area and
is in a tight interrelation. Each field
of activity has different specific properties.
It is possible to mention the importance
of petroleum exploration, which forms
the first ring of the chain, into the
following groups.
The technological importance of oil
exploration includes the accumulation
of information and qualified manpower
in this subject and capital(7). The
technology used in the oil exploration
develops very fast. The technology consists
of many different branches requiring
expertise and accumulation of information
in them. The expertise in geological,
geophysical, geochemical and other exploration
techniques and in drilling technology,
the application of, and in fact, the
leadership in developments in these
subjects is possible only by doing intense
exploration activity. The realization
of this is possible only by having qualified
manpower and instrumentation in each
branches of exploration, that is, by
allocating capital into this field and
having activity continuously. The institutions
having qualified manpower, knowledge
and technology may go into international
operations by using the experience gained
at home.
The property that differentiates the
exploration activity from other sectors
is that the information obtained during
the activities accumulates continuously
and is used in later activities. The
information related to a certain part
of a sedimentary basin is important
not only for that specific area, but
also for the whole basin. The proper
estimation of each of the local parameters
related to petroleum exploration depends
on gathering and realistic evaluation
of information related to distribution
and variation of the parameters in the
basin. Therefore, as required by the
Petroleum Law, the new data related
to an exploration license are transferred
to and filed at the General Directorate
of Petroleum Affairs following the relinquishment
of the license, to be used by other
explorations in future. By this way,
since quantity and quality of information
increase by the time, it would be possible
to do more realistic evaluation in the
exploration activities.
Another importance of the exploration
activities is the economic consideration.
The new petroleum reserves can be discovered
only by the exploration activities.
If it is assumed that a petroleum field
to be discovered at the end of exploration
work amounting to a few million Dollars
would produce 100 million barrels oil
in the next 10 years and the oil price
is 25 Dollars per barrel, this would
yield an economic size of 2.5 million
Dollars. The high risk but enormous
income at the end of a prolific exploration
work and lack of necessity of proportion
of success to the amount of investment
are other strikingly specific features
of the sector. It is possible to be
successful, that is, to discover a major
oil field, at the end of drilling a
cheap well, as well as being unsuccessful
at the end of spending great amount
of money. A typical example of this
nature is the Karakuş field near Adıyaman.
The cumulative production in this field
as of end 2001 exceeded 105 million
barrels when considered together with
the Cendere field located in the same
structure. The daily production is 11
670 barrels on the same date; Karakuş
field is the largest of Turkey both
in daily and total production.
The other economic aspects of petroleum
exploration are the employment and taxes
to be generated by the services sector
in the exploration activities and the
royalty to be given to the government
as part of the oil to be produced from
a new field. A royalty of 12.5% of the
gross production is given according
to the Petroleum Law. The 13.12 million
barrels royalty given in 15 years from
the 105 million barrels production of
the above mentioned Karakuş field makes
328 million Dollars when a 25 Dollars
per barrel price is assumed.
One other importance of petroleum exploration
is the strategic nature of petroleum.
Petroleum and gas, same as coal, are
fossil fuels, that is, they are source
of energy impossible to renew. Therefore,
possession of the areas including the
existing reserves or discovery of new
reserves are of strategic importance.
The strategic importance of petroleum
has been continuing to increase since
its commercial production started mid
19th Century. The sufficiency of petroleum
reserves at strategic importance can
only be maintained by discovering the
new reserves which is possible only
by continuous performance of exploration
activities to search and outline the
petroleum potential as a whole. The
decrease in the discovery of new fields
plays a role to further increase the
strategic importance of petroleum.
4. Petroleum Potential Of Turkey
The petroleum exploration activities,
which were seriously considered after
the foundation of Republic, have been
carried out also with the contribution
of domestic and foreign capital. As
of end 2001, a total of 170 foreign
and 20 domestic companies have been
operating. The number producing companies
are 11, two of which are domestic and
9 are foreign. The production data of
these companies are given in Table 2.
Table 2- Reserves in Turkey as
of end 2001, (8)
| Reserve |
TPAO |
Shell |
Mobil |
Other |
Total |
| Oil in place
(million barrel) |
4639 |
1294 |
539 |
163 |
6635 |
| Recoverable
oil (million barrel) |
601 |
356 |
94 |
43 |
1098 |
| Total production
(million barrel) |
419 |
282 |
79 |
31 |
811 |
| Remaining recoverable
oil (million barrel) |
183 |
74 |
15 |
14 |
284 |
| |
| Natural gas
in place (million cu m ) |
13025 |
4654 |
|
2621 |
20300 |
| Recoverable
natural gas (million cu m) |
8563 |
3258 |
|
2069 |
13890 |
| Total gas production
(million cu m) |
5122 |
46 |
|
49 |
5217 |
| Remaining recoverable
gas (million cu m) |
3441 |
3211 |
|
2021 |
8673 |
| |
| Total oil fields
discovered |
61 |
24 |
3 |
12 |
100 |
| Oil fields produced
in 2001 |
47 |
20 |
1 |
8 |
76 |
| |
| Total natural
gas fields discovered |
14 |
2 |
|
4 |
20 |
Table 2 indicates that the recoverable
oil reserves are slightly above one
billion barrels, of which 811 barrels
has been produced and the remaining
recoverable reserve is 286 million barrels
(42 million tons). This remaining recoverable
oil of 42 million tons is less than
1.5 times of annual consumption of 30
million tons. The domestic production,
which is in declining period, was 2.5
million tons in 2001. The amount of
recoverable oil is 17 fold of annual
petroleum production. Production ceased
in about one quarter of the discovered
fields.
The oil exploration activities in Turkey
have been concentrated in Southeast
Turkey and Thrace and the sedimentary
basins out of these areas were not sufficiently
explored. The parameters forming the
petroleum system of all sedimentary
basins in Turkey have been outlined
with the available information. There
exists further petroleum potential both
in Southeast Turkey, Thrace, Adana regions
and the other sedimentary basins (9).
A great number petroleum discovery
in Turkey has been made after drilling
the second or third wells. Adıyaman,
Çemberlitaş and Karakuş fields are examples
of this feature. Positive results have
been obtained, under the light of new
data, in areas where the dry wells were
drilled in the past due to improper
location definition resulting from insufficient
subsurface data or the wells were relinquished
due to technical reasons.
The offshore areas have been poorly
explored although Turkey is surrounded
by seas in three directions. The offshore
drilling, which is rather expensive
depending on the depth of bathymetry,
will be realized in future.
Only the fraction of petroleum consumption
of Turkey less than 9% is supplied by
indigenous production. This feature
is much less in natural gas; it almost
fully depends on the importation. Therefore,
Turkey is a petroleum-hungry country.
On the other hand, it is known that
Turkey is not a petroleum country. But
it possible to discover new petroleum
and natural gas fields by using comprehensive
exploration programs.
5. Results And Recommendations
During the time following the foundation
of Republic, while revolutions have
been realized on one hand, intense efforts
had been spent for exploration and production
of raw materials and natural resources
to realize the economic development.
By this way, the foundation of petroleum
sector in Turkey has been made and the
sector became successful in a short
time. The petroleum sector was opened
to foreign and domestic private investors
with the application of the Petroleum
Law in 1954. After achieving success
in Turkey, TPAO went outside and had
exploration alone or jointly with others
in Asia, and Africa. TPAO became stakeholders
in major projects in Caucasia and Central
Asia.
The petroleum fiels of various scale,
100 in number, and 20 gas fields have
been discovered in Turkey by MTA, TPAO
and foreign companies in the 70 years
history. MTA and TPAO drilled 2156 wells,
742 of which are exploration, and discovered
600 million barrels recoverable reserves.
A total of 170 foreign companies operated
in Turkey in 50 years period. A great
part of the registered capital of one
billion Dollars stayed in Turkey. This
is because the great majority of the
companies could not discover any oil
and it was not possible to transfer
outside any capital for these companies.
The foreign companies drilled 820 wells
as a total, 389 of which is exploration,
discovered 500 million barrels recoverable
reserves in about 40 fields and produced
400 million barrels oil. Since producing
companies are allowed to transfer their
registered capital and benefits from
the income obtained from the oil they
produced, they transferred 1.1 billion
Dollars as registered capital and benefit.
However, the indigenous production could
never compensate the consumption in
Turkey, where growth has been fast and,
parallel to that, consumption of petroleum
product has increased rapidly too. The
ratio of indigenous production to consumption,
which is less than 10% in recent years,
has reached to its maximum value of
55% in 1969. The dependency to oil importation
will be more in future in Turkey, where
almost all of the producing fields are
in declining period and consumption
continues to increase. As a consequence
of energy policies of recent years,
Turkey inclined towards natural gas
and almost all of consumption depends
on importation.
As originating from the nature of oil
exploration, all of the exploration
activities, whether small or large,
provide accumulation of highly valuable
data that are used in determining the
petroleum potential of the country and
exploration work later. Under the light
of data available at present, it cannot
be said that the petroleum potential
of Turkey has been fully explored. Most
of the exploration wells were drilled
in 1950's, 60's and 70's when the information
was sparse and technology was poor.
With the new exploration activities,
new prospects can be defined as well
as positive results can be obtained
from the prospects which were drilled
before but negative results were obtained.
The internal sedimentary basins and
offshore areas were relatively less
explored when compared with Southeast
Turkey and Thrace where exploration
has been more.
Although not a petroleum country, Turkey
is still attractive for exploration.
Decrease of external dependency of petroleum,
which is a strategic material, is only
possible by increasing the ratio of
compensation of consumption by indigenous
production. This is conditional to increase
of exploration work. The precautions
should be taken which will increase
the exploration activities of TPAO and
domestic and foreign companies. The
following recommendations are suggested:
1. The exploration budget of TPAO should
be increased; TPAO should be kept out
of political influence and should reattain
its traditional oil company identity.
2. The joint operation of TPAO with
foreign companies should have realistic
frame, joint operation should be arranged
to be attractive for foreign companies.
3. The issue of cessation of transfer
of registered capital with exchange
guaranty, which influenced the entry
of new foreign capital, should be solved.
4. The domestic private capital should
be supported for petroleum exploration
through regulations in tax laws. The
domestic investor who will be successful
in oil business and gain exploration
and production experience at home will
be an example and motivate the other
domestic companies to go and make investment
into petroleum exploration and also
will operate later out of country.
5. The Petroleum Market Law and the
revision of Petroleum Law No 6326 should
be cleaned of articles, which would
negatively affect exploration activities,
on the contrary, should be supportive.
However, the supportive articles should
be realistic but not exaggerated.
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Ankara.
Editor's
Note
