Eastern promise

TPAO is already drilling deep in the Black Sea and now it plans to conquer the Middle East’s oil fields. Diana Milne meets the company’s head of drilling Zaher Ataya to find out how.

“In Turkey drilling activity is increasing but the highest potential is not onshore, but offshore”
-Recep Ataya

With 4000 employees in Turkey and branch offices across the world, TPAO (Turkiye Petrolleri Anonim Ortakligi) has established itself as one of Europe’s top drilling and oil exploration companies. And as its operations move further East it is taking its place alongside other IOCs on the MENA oil and gas stage. Having been founded in 1954 as Turkey’s sole national oil company, today TPAO focuses on drilling, exploration, well completion and production, as well as natural gas storage, oil trade and transportation and pipeline projects. Its activities span the Caspian Region, North Africa and the Middle East with exploration and production in Azerbaijan, Kazakhstan and Libya. This list of countries is set to grow however, with the company involved in talks about new projects in Syria, Turkmenistan, Georgia, Iraq, Egypt, Russia and Algeria.

Home territory
For now however, the bulk of TPAO’s drilling activities concentrate on the Black Sea area and it is involved in extensive activities to source hydrocarbon reserves following the discovery of natural gas there in 2004.

The company’s head of drilling Recep Ataya, reveals the company’s planned activities in the area: “Actually in Turkey drilling activity in increasing but the highest potential is not in onshore but offshore. In 2010 TPAO, and some of the TPAO joint venture companies such as Exxon Mobil or Petrogas, are going to drill some ultra deep-water wells in the Black Sea. The Black Sea will be a very active place in the coming years, especially for offshore operations.” The latest development in the company’s Black Sea activities is the signing of a Drilling Services Agreement between Petrobras and Ocean Rig company for the use of the Leiv Ericsson submersible drilling rig – which can reach depths of 75000 feet - to drill in the joint Sinop Block in the Black Sea. The deal also allows for TPAO to use the rig to drill elsewhere in the ultra deep waters of the Black Sea.

Shifting horizons
But while its main focus remains the Black Sea, TPAO’s horizons are shifting towards the Middle East, where it is particularly keen to become involved in drilling and exploration in Iraq. It has made major inroads in this area, having been listed as one of the 35 pre-qualified companies by the Petroleum Ministry of Iraq following its first Petroleum Licensing Round held in June this year.

TPAO took part in the bid as part of a consortium of three companies, bidding for Zubair Oil Field, Kirkuk Oil Field and Akkas Oil Field.   Late last year it also signed a lucrative MOU with Boru Hatlariyla Petrol Tasima AS (BOTAS) and Shell Energy Europe as part of the Turkey Gas Export Project which will see natural gas exported from Iraq to Turkey.  As part of the Iraq to Turkey Gas Export Project the three parties will also examine the possibilities of cooperation in developing natural gas related upstream opportunities in Iraq and export activities to other European markets via Turkey. But these are not the company’s first attempts to stake its claim in the Iraqi energy sector: “Before the war we drilled 20 wells in Iraq very successfully,” says Ataya. “After the war we took our crew out of Iraq but now there are some good opportunities coming up so we are ready to go to Iraq.”

Ataya says that Libya is another key market that TPAO hopes to tap into it. However Ataya says he knows this will be a challenging prospect: “There are a limited number of drilling contractors working in Libya. There is no free market there. But in the coming years, a lot of concessions may open to contractors.” The company already has drilling operations in Libya where it is actively drilling in Block NC188, Block NC189 and 147/3 and 147/4. It now hopes to expand its operations across the country.

Ataya says it faces significant health and safety challenges in its current activities in Libya, because of the remote locations of the areas in which it is drilling and the fact that this is relatively unchartered territory for many IOCs.

However he says these issues will be addressed when more companies enter the market: “Oil companies will most probably bring high quality contractors and as a result the health and safety will be increased.”

In the Levant, TPAO is seeking drilling opportunities in Syria where it is continuing to negotiate for oil and gas exploration development opportunities. It signed an MOU with Syrian National Oil Company in Damascus in 2005. In accordance with the terms of the MOU, a joint company is planned to be established to develop and carry out exploration production projects at designated concessions.

High tech drilling
To take maximum advantage of the drilling opportunities in the countries where it hopes to expand, TPAO is taking advantage of the latest drilling technologies, including digital data from the drilling units: “We have one of the latest technology drilling units and we can see the whole drilling parameters sitting in our homes. We are transferring all the data on the internet. So we can see the data just as clearly as from on the rig side and those are very exciting technologies with which to monitor the drilling activities. We have a visualisation room and we see all the well trajectories on the screens.”

This sort of technology means it is easier than ever now for TPAO to keep a bird’s eye view of its operations overseas. And as it continues to expand ever further east and its remit becomes wider, the challenges of overseeing multiple drilling operations will only increase.

Aiming high
By 2010 TPAO hopes have reserves of 1.5 billion barrels of oil. This compares to its to the reserves of 558 million which it had in 2005. It produced 70,000 barrels of oil a day that year. But in 2010 it hopes to produce 300,000 barrels of oil.

TPAO’s Middle East and Africa strategy:

Syria
TPAO is continuing to negotiate for oil and gas exploration-development and production investments in Syria. An agreement was signed between TPAO and Syrian Petroleum Company – SPC (Syrian National Oil Company) in Ankara on January 4, 2008.

Iran
According to the MOU signed on July 14, 2007, South Pars Field Development and Production Project, 22-23-24 Phases were reserved to TPAO with direct negotiations. Evaluations of the sites are ongoing.

Iraq
TPAO has been continuing contacts with the Ministry of Oil of Iraq since 1994, for exploration and production opportunities in Iraq. TPAO has continued business development activities with Iraqi Ministry of Oil.

Turkmenistan
TPAO has been carrying out oil and natural gas exploration and development studies on onshore and offshore areas of Turkmenistan, since 1993.

North Africa
In 2007, TPAO experts visited data rooms in Congo, Equador Guinea, Gabon and Tanzania to study technical and commercial evaluations of some blocks there with a view to beginning exploration activities in those countries.

Other Countries
In addition to the activities mentioned above, TPAO has been continuing to search and negotiate for business opportunities in other hydrocarbon rich regions such as Russian Federation, Ukraine, Algeria, Egypt, Brazil, Indonesia, Sudan, West Africa and South America.