Why Turkey

While Turkey has a known oil and natural gas industry (Turkey currently has estimated proven reserves of 307 mmboe and 2010 production from the country was approximately 66,000 boe/d), Turkey’s oil and natural gas basins are relatively under-explored and under-exploited. Only about 3,730 wells had been drilled in Turkey up to the end of 2009, of which approximately 60% were drilled in the period from the mid-1950s to the late 1980s. Considerable scope remains for more extensive exploration drilling given the size and prevalence of the sedimentary basins in the country.

 

Unlocking Turkey’s Potential

 

It is well-known within the industry that Turkey can benefit greatly from increased E & P investment and a much broader application of modern technology and industry practices, including 3D seismic, deeper vertical drilling, horizontal drilling, hydraulic fracturing, workovers and recompletions, and secondary recovery methods. These practices and technology, if employed in Turkey on a larger scale, have the potential to dramatically increase reserves and production from both conventional and unconventional plays. While the exact quantity of that potential remains uncertain, due to the infancy of these practices in the country, there is reason to be very optimistic about, based on the initial results of some pioneering local and international players.

 

Welcoming Investment Climate

 

In addition to this untapped potential, Turkey’s competitive royalty rate of 12.5% and corporate tax rate of 20% result in relatively high netbacks from a global context, and make Turkey a very lucrative target for investment. Given strong reference prices, and a government take that is amongst the best in the world, companies operating in Turkey are capable of generating very robust returns.

 

Well-Defined Plays

 

Historically, Turkey’s oil and natural gas exploration and development has primarily been focused in southeast Turkey in the Anatolia Region, near the border of Iraq, Iran and Syria, where over 100 oil fields have been discovered to date. The other area of focus has been the Thrace Basin, a natural gas prone region located in northwest Turkey where approximately 25 natural gas fields have been discovered to date. The Thrace Basin is a prospective target for unconventional gas (tight gas and possibly shale gas) that has the potential to be unlocked with fracturing technologies in vertical and horizontal wells.

 

A Wealth of Opportunity

 

Turkey’s proximity to energy consuming markets, relative ease of monetization, strong realized pricing, robust crude oil and natural gas prices and favorable fiscal terms make it an excellent prospect for international investment. As new players enter the market, bringing with them new capital, new technology, and new industry practices, Turkey’s oil and gas sector is poised to flourish like never before.