ÇAĞRILI KONUŞMALAR / KEYNOTES Invited Speeches ... - TPJD

Some Suggestions with Regard to a New Turkish Petroleum Law
Ahmet Tandırcıoğlu
TPOC Libya Branch, Libya
New Turkish Petroleum Draft Law numbered 5574 was prepared to change the existing Petroleum
Law of 6326 with effective date of 1954 and with the reasoning of alignment with European
Union acquis; exploration, development and production of Turkey’s petroleum resources in a
fast, effective manner and in alignment with today’s market conditions. However, with the new
proposed law, it seems unrealistic to reach the expected results while guarding the national
interests; therefore, a hybrid model as used in some countries in the world is suggested. With
this model, several suggestions are made with regard to: transparent, objective and competetive
environment for licensing procedures in which only technically and financially pre-qualified
companies participate; realization of significant exploration investments, auditing, and sanctions
to be applied, in case of commercial discovery, sharing of the profit between the investor and
the state fairly.
In principle, exploration licences should be given in bid rounds to the companies with technical
and financial pre-qualification and capable of conducting operatorship. In case of an application
for an open area for exploration, it should be announced officially and 90 days should be given
to other companies for application. Companies without technical capabilities, can only form
partnerships with operating companies and not given an exploration license. In the application,
companies submit their minimum work program commitment and profit sharing percentage
according to R factor or additional state share. The winner is determined instantly using a point
calculation formula which is announced prior to bid rounds and announced in public.
Exploration risks should be considered in determination of the size of exploration licenses.
Licenses with high exploration risks should be large (maximum 10,000 km 2 ) whereas licenses
with low exploration risks should be small (minimum 500 km 2 ). Exploration period should be
divided into 2 phases: for onshore licenses 4+2 years, for offshore licenses 6+3 years. In order
to go into the 2. Phase, at least 1 exploration well should be committed and at least 40% of the
license area should be relinquished. Discovery and commercial discovery definitions should be
clearly made. If the exploration period is not enough to appraise the discovery, then maximum of
two years should be given for appraisal only for the prospect area where the discovery is made.
Thus, the remaining area will be available for future exploration work.
It is necessary that General Directorate of Petroleum Affairs (GDPA) must be restructured in terms
of competent personnel, technology, and financial aspects in order to fulfill its responsibilities.
In addition, Türkiye Petrolleri Anonim Ortaklığı (TPAO), major player in the sector, must be
restructured and be competetive in the international arena.
Keywords: Petroleum Law
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