What attracts international companies to the Turkish energy sector?

PER H. SKAUG Our focus is on Southeast Europe and the MENA region. Up until 2009, we had been seeking entry into the Turkish market through deals or partnerships. Finally, Toreador Resources was selling its company and leaving Turkey, so we acquired Toreador and became Tiway Turkey. The most important result of the deal was the excellent team in Turkey. Ultimately, we paid for the team on the ground, and the production assets just came along with that investment. There were a number of factors that drew us to Turkey. First was the top-notch fiscal regime in the oil and gas sector. Historically, oil and gas production has not been a high priority in Turkey, and it has been a way for the Turkish government to attract investors in the region. Secondly, the country has a very transparent bidding process and a decent petroleum law that is being updated. Thirdly, the country lacks large oil and gas-producing companies, which is good for us, especially as a smaller organization.

KUBİLAY YILDIRIM Considering the geographical position of the country, it is easy to see why Turkey is attractive for foreigners. In terms of the transportation of resources from the Middle East to Europe, Turkey plays a central role amidst its neighbors. That is why it is attractive for foreigners.

Where do you see the greatest oil and gas opportunities in Turkey?

PS The best opportunities are in the southeast, because, due to a history of security issues, the region remains tremendously under explored. We believe that there are going to be significant opportunities in southeast Turkey as in the neighboring countries of Iraq and Syria. There are parts in the southeast that have a similar geology to Iraq and Syria. The borders of these countries were drawn before oil was located, but the resource does not stop flowing at the border. We see tremendous opportunities in the southeast that are now opening up because of the peace process. Turkey has the Black Sea and the Eastern Mediterranean, where obviously there is gas in deepwater areas. We have the best track record as an operator in shallow water in the Black Sea, and we are partnered with TPAO in the only offshore gas production operation in Turkey. We have made the largest discoveries in the country in terms of heavy oil, and we are examining our licenses with hopes to expand them.

Does Turkey have enough petroleum reserves to significantly reduce its dependence on energy imports?

KY With maybe two or three giant discoveries, imports could be reduced significantly because Turkey imports 93% of its oil and 97% of its gas. It will not be easy to make such discoveries, even in the Black Sea, but I believe there will be a significant effect on the import amount. Turkey is under explored, particularly offshore. It will take not just one, but a couple of discoveries in the Black Sea and the Mediterranean to change that. Mehmet Uysal, the president of TPAO, said that Turkey will be an exporter of gas by 2023. Although it is a dream and a good target, I doubt even he believes that Turkey will become an exporter. In 2,000 feet of water, if we fail to make a discovery soon, it will be impossible to produce enough for exports by 2023. Nevertheless, he established the target, which inspires operators to at least reduce the amount of imports by half, for example. That would make a great impact on the Turkish economy.