TPAO, Shell to Explore for Oil and Gas in the Black Sea

Turkey's state owned upstream operator, Türkiye Petrolleri Anonim Ortakligi(TPAO), along with Anglo-Dutch Shell, will begin explorational drilling in the Western Black Sea.

At a press briefing where executives of both companies were in attendance, Turkish Energy Minister Taner Yildiz said that he is hopeful the venture will result in the discovery of oil and gas.

"Our first priority is to improve and use national energy resources as much as possible. Our neighbouring countries such as Bulgaria and Romania have found natural gas and oil resources in this region. So, that's why we're hopeful for this exploration venture of TPAO and Shell," Energy Minister Taner Yildiz said at the press conference.

According to remarks by Mr. Yildiz, TPAO and Shell Turkey will spend around $300 million in the exploration process, which will take place 100km offshore Istanbul with a 2,000m exploration drill. The drilling ship crossed the Bosphorus and set sail towards the exploration area.

Mr. Yildiz also said that 45 oil companies drilled both onshore and offshore Turkey in 2014, including 17 foreign companies. "Our ratio of finding oil and gas is 33% percent. Turkish government will pay $1.9 billion less for oil and gas imports, with these new findings of oil and gas," according to Minister Yildiz. He also said that the 50% slump in oil prices resulted a $500 million cost to TPAO. The Western Texas Intermediate (WTI) crude oil price has recently fallen below $50 a barrel for the first time since April 2009.

"Oil price decline won't deter TPAO from drilling, but we're planning to drill half of the 130 wells planned for 2015," TPAO CEO Besim Sisman said at the press conference. Also, Shell executives gave a similar message with different words. "Oil price developments won't stop Shell from exploring. We'll start drilling this month, a year before than planned earlier," Shell Upstream Turkey Director Joris Grimbergen said at the press conference.


Separately, Minister Yildiz also answered questions regarding the arbitration process for natural gas prices with Iran and demands for lowering natural gas prices from Russia. He explained that the arbitration process with Iran had finished, with the final verdict on gas pricing to be announced in the near future. "We talked about lowering prices with our Russian counterparts, in two different meetings. We may need to hold another round of talks for the pricing with Russia," Yildiz said. Russia has already offered a6% discount ongas supplies toTurkey starting fromJanuary andpossibly could offer even lower prices, Russian President Vladimir Putin said in a visit to Ankara last December.

"Turkey's priority is tocompensateBOTAS losses which are around $1.2 billion. Natural gas prices in Turkey are the least expensive in all Europe," said Minister Yildiz.

(Natural Gas Europe)
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