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2010 Annual ReportTURKISH PETROLEUM CORPORATION
1TPAO 2010
TURKISH PETROLEUM CORPORATION
3TPAO 20102 TPAO 2010
Our Nation's high capability and commonsense have been our guide and source of success in strenuous duties we involved in.
M. Kemal ATATÜRK
CONTENTS
4 TPAO 2010
Throughout 2010, 3 deep water drillings, Sinop-1,
Yassıhöyük-1 and Sürmene-1, were successfully
realized in Black Sea with "Leiv Eiriksson", one of the
biggest exploration platforms of the world.
Oil discovery was realized in 7 wells out 11 wells
drilled by TPAO in Libya.
TPAO signed technical service contracts for the
“Missan and Badra Oil Fields” in Iraq.
TPAO won the bid for Mansuriya Gas Field as an
operator and Siba Gas Field as a partner in Iraq’s
third bidding round in 2010.
In Western Black Sea Development Project, within the
scope of Phase-II in TPAO's operatorship, Akçakoca
Platform was engaged and production activities were
initiated.
In order to maintain oil and natural gas production
from “Unconventional Reservoirs”, TPAO and
TRANSATLANTIC signed a “Memorandum of
Understanding (MOU)” on April 9th, 2010.
TPAO added a new 1,500 HP drilling rig (NOV-1500)
to its rig fleet.
By 2010, TPpd, the 8th biggest distribution company
in the market, continues to increase its market share
in Türkiye.
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05060810121416182634424648505258
highlights
about us
organization chart
message from the president
board of directors
general management
company profile
domestic exploration and production activities
international exploration and production activities
technology and services
research center
occupational safety and environmental protection
human resources
district managements
subsidiaries and associated company
finance
HIGHLIGHTS
5TPAO 2010
Focusing on productivity, integration, staff development, sensitiveness to the society and environment, TPAO's 2010-2014 roadmap is;
l To increase the regional and global efficiency,
l To increase our domestic crude oil and natural gas reserves production,
l To increase the current natural gas storage and capacity,
l To increase high performance staff culture.
Roadmap
With “to become a regionally effective world-class energy company meeting Türkiye’s oil and natural gas demand and to be the most desired company to work with” vision and
with “to bring out oil and natural gas potential of Türkiye and provide them for the use of Turkish economy, to supply new sources of income via international activities and play an effective role in the energy sector, by also actively participating in Türkiye’s process of being an Energy Corridor” mission,
TPAO’s employees, temporizing world conjucture and fulfilling the duties in the globalization process are hand to hand to shape the future of our country with their institution culture, knowledge and experiences.
6 TPAO 2010 7TPAO 2010
who we are?TPAO was founded in 1954 by Law No. 6327 with the responsibility of being involved in hydrocarbon exploration, drilling, production, refinery and marketing activities as Türkiye’s sole national oil company. Until 1983, as an integrated oil company, it was engaged in all activity fields of oil industry from exploration to transportation.
what we do?TPAO has four different core activities in the oil sector.• Exploration, Drilling, Production and Well Completion• Natural Gas Storage• Participation to Pipeline Projects• Oil Products Trade and Distribution (TPIC)
where we operate?TPAO was structured as having its headquarters in Ankara and also 3 District Managements in Batman, Thrace and Adıyaman with approximately 5,000 employees throughout Türkiye and its branch offices abroad. To ensure energy supply security of the country, TPAO conducts its international activities especially in Caspian Region, North Africa and Middle East. In this context, TPAO carries out its exploration and production activities actively in Azerbaijan, Kazakhstan, Libya and Iraq. TPAO has been continuing to search and negotiate for business opportunities in other hydrocarbon rich regions such as Syria, Turkmenistan, Iran, Ukraine, Russia, Brasil, Colombia, Algeria, Egypt, Sudan and Venezuela.
ABOUT US
8 TPAO 2010 9TPAO 2010
Advisor to the President
Secretariat to the President
Batman District ManagementSüleyman ÇALIK
Trakya District ManagementMurat HACIHALİLOĞLU
Department of International ProjectsTayfun Yener UMUCU
Department of Well CompletionSerdal AZARSIZ
Offices
Department of DrillingHüseyin ÇİLOĞLU
Department of Human ResourcesYahya PEKTAŞ
Department of Machinery Supply&Construction Recai GÜNGÖR
Department of Occupational Safety&Env. ProtectionYusuf AHÇI
Department of ProductionAli TİREK
Adıyaman District ManagementHalil Murat DEMİR
Department of Research CenterÖmer ŞAHİNTÜRK (A.)
Board of Searching and Development
Department of Planning & CoordinationErdal COŞKUN
Department of FinanceFikri NAYIR
Department of Information TechnologiesLevent ÖZKABAN
Department of Strategies Memet Ali KAYA
ORGANIZATION CHART
Member of the BoardCumali KINACI
Member of the BoardMurat ALTIPARMAK
Member of the BoardBesim ŞİŞMAN
Bureau of the Board of Directors
Member of the BoardYusuf YAZAR
Member of the Boardİsmet SALİHOĞLU
Auditing CommitteeAhmet ASLAN
Legal AdvisoryDavut İYRAS
Chairman and PresidentMehmet UYSAL
Department of ExplorationÖmer ŞAHİNTÜRK
Vice PresidentBesim ŞİŞMAN
Vice PresidentYurdal ÖZTAŞ
Vice PresidentHakan BİLİR
Vice PresidentAhmet ADANIR
Vice PresidentMurat ALTIPARMAK
11TPAO 2010
Mehmet UYSALChairman and President
The importance of the studies maintained by Turkish Petroleum for Türkiye, increases everyday. Long term energy supply plans which are main subjects of countries’ strategic plans reveal Turkish Petroleum’s importance for Turkiye itself. Today, a process is ongoing in which crucial developments occur related with energy world including civil commotion in North Africa and Middle East. In this process, developed countries started to give new directions to energy politics and to determine new strategies.
However, I would like to say that the most significant development for the past 3 years is not political but technical one. This development proved that oil and natural gas production may be increased by unconventional methods. Especially, it is remarkable that United States has met its natural gas demand for 200 years by this way. The last century was defined as “The Gold Century of Oil” whereas, it is expected that the next century will be “The Gold Century of Natural Gas” because of the great amount of natural gas reserves.
The other significant development is; everyone, including the major producers, has accepted the reality that oil and natural gas resources are limited and they renewed their strategies in this respect. Within this context, while all of the international major oil companies are restructuring themselves as “Energy Company”, national oil companies are turning into “National-International Oil Company”. They will surely turn into “Energy Company” later on.
The cost of oil and gas imports of our country will be around 600 billion USD for the next 10 years and that makes us to maintain our national and international exploration and production activities increasingly without any halt.
Turkish Petroleum initiated an outstanding investment boom by intensifying its activities on unexplored areas lately, especially in offshore. Our domestic investments reached to 823 million USD in 2011 while it was 50 million USD in the early 2000’s.
While making these sizable investments, our Corporation continues its contribution to Turkish economy. In 2010 TPAO earned 1.87 billion TL income and made 1.3 billion TL pre-tax profit and with its legal obligations+dividend payments, TPAO’s contribution to Turkish economy becomes 1.06 billion TL.
Turkish Petroleum has been conducting studies that will emerge new oil sources of our country with its investment booms in the last 10 years. “Ultra Deep Water” drillings of Sinop-1, Yassıhöyük-1 and Sürmene-1, realized with one of the biggest platforms of the world “Leiv Eiriksson”, are crucial steps for TPAO. By being drilling operator of Yassıhöyük-1 well, Turkish Petroleum becomes one of the 12 major companies in the world that can handle this operation in ultra deep waters.
Our short term target is to test the hydrocarbon potential of Black Sea and to provide it for the use of Turkish economy. After the first drilling boom with three wells initiated with “Leiv Eiriksson”, the second drilling boom is planned for “ultra deep water” drillings of 4 wells. This plan is on the way with “Deep Water Champion”s coming, a drill ship constructed and supplied with the latest technological innovations.
We are excited and aware of that, the successful results that may be obtained from the drillings in our seas will carry Turkish Petroleum and Türkiye to “2023 targets”.
Moreover, I want you to know we have obtained very hopeful results from our Mediterranean offshore investments. With these activities, we have planned to drill a well in İskenederun Bay in the midst of 2012 and the first “ultra deep water” well in Antalya in the midst of 2013.
Double-deck Akçakoca Platform that has 2.1 million m3 producing capacity daily, was engaged in Western Black Sea. While 360,000 m3 natural gas can be produced from the production deck, development activities that will increase natural gas production and new production wells' drillings, continue simultaneously on drilling deck.
New joint studies were initiated with experienced foreign partners in order to produce oil and natural gas with unconventional methods like shale gas and shale oil in Thrace Basin and Southeastern Anatolia. I believed that production by these methods will contribute to meet the hyrdocarbon demand of our country in long term.
The capacity of Kuzey Marmara and Değirmenköy Underground Natural Gas Storage Facilities, a “first” for our country engaged in 2007, has been increased from 1.6 billion m3 to 2.66 billion m3 in 2010. Studies of increasing the storage capacity to 2.84 billion m3 and daily reproduction capacity to 50 million are ongoing for the next term.
Today, international investments and operations initiated in 1990’s, continue in Caspian Region, Middle East, North Africa and South America.
Turkish Petroleum is conducting its activities in important projects like Azeri-Chirag-Guneshli (ACG), Shah Deniz (SD), Alov, Baku-Tbilisi-Ceyhan
(BTC) and South Caucasus (SCP) in which major oil companies are partners and also conducting its joint activities in Kazakhstan through a joint venture company, KazakhTurkMunai (KTM).
Turkish Petroleum, the first foreign oil company who established an office in Iraq Bagdad, joined the Missan and Badra Oil Fields together with Siba and Mansuriya Gas Fields Projects via consortiums. The operator of the Mansuriya Gas Fields is going to be Turkish Petroleum.
The oil discovery realized in the first well drilled in Libya Murzuq Basin under 147/3-4 licence in 2009 was one of the important oil discoveries realized in Libya in recent years. 7 out of 11 wells drilled under this licence whoose oil potential is high, resulted in oil discovery. With the outbreak of intricacies, Turkish employees were safely and swiftly brought back to Türkiye and our office activities are still going on with Libyan local employees in Tripoli. We hope to re-initiate our production activities to develope these discoveries in Libya after the assurance of stability within the shortest time.
All these activities I mentioned above are being achieved with Turkish Petroleum’s employees’ willingness and self-sacrificing efforts. It is praiseworthy that our employees are conducting tough and important projects successfully in international fierce comptetition environment. I express my gratitude to all of our employees for their efforts and services.
Our main target as Turkish Petroleum is to be able to produce the whole oil and natural gas demand of our country in the Hundreth Year of The Establishment of Republic of Türkiye. Our happiness will correspondingly grow as much as we reach to this target in our domestic and international activities. Resetting our 50 billion USD average annual energy import expense, by decreasing it rapidly in the following years will be a significant step towards the target of Türkiye’s being in the top ten economies.
In order for Türkiye and Turkish Petroleum to reach their main targets, the time has come that Turkish Petroleum should be restructured as an effective oil company that can challange with international oil companies. I think this restructure is really important, will be the most important step for Türkiye to reach its main targets.
10 TPAO 2010
Our main target as Turkish Petroleum is to be able to produce the whole oil and natural gas demand of our country in the Hundreth Year of The Establishment of Republic of Türkiye. Our happiness will correspondingly grow as much as we reach to this target in our domestic and international activities. Resetting our 50 billion USD average annual energy import expense, by decreasing it rapidly in the following years will be a significant step towards the target of Türkiye’s being in the top ten economies.
12 TPAO 2010 13TPAO 2010
1 2 3 4 5 6
BOARD OF DIRECTORS
Mehmet UYSALChairman and President
İsmet SALİHOĞLUMember of the Board
Murat ALTIPARMAKMember of the Boardand Vice President
Besim ŞİŞMANMember of the Boardand Vice President
Yusuf YAZARMember of the Board
Cumali KINACIMember of the Board1
23456
Murat ALTIPARMAKMember of the Board
and Vice President
Mehmet UYSALChairman and President
Besim ŞİŞMANMember of the Boardand Vice President
Ahmet ADANIRVice President
Yurdal ÖZTAŞVice President
Hakan BİLİRVice President
GENERAL MANAGEMENT
14 TPAO 2010 15TPAO 2010
16 TPAO 2010 17TPAO 2010
COMPANY PROFILE
Drilling of 3 deep water wells in deep waters of Black Sea provides us to break the record of drilling depth that hadn't been broken for a long time. Total amount of offshore seismic surveys in our seas realized in the last 7 years is much more than seismic surveys performed during TPAO's 57 years history.
Net Profit Current Ratio
2010 2009
Sales Revenues (million USD)
Net Profit (million USD)
Total Current Assets (million USD)
Total Fixed Assets (million USD)
Shareholders Equity (million USD)
Short-term Foreign Liabilities (million USD)
Long-term Foreign Liabilities (million USD)
Current Ratio
Cash Ratio
Financial Leverage Ratio
Cash RatioTotal Sales Revenue
Million USD
Domestic Seismic Activities
25,000
20,000
15,000
10,000
5,000
0
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2010
2009
2008
2007
2006
2D3D
km km2
2,851
1,353
2,793
4,214
5,341
1,015
652
2.75
1.97
0.24
2,026
389
2,090
4,073
4,925
481
757
4.35
3.15
0.20
500
0 0 0 0
1 1
2 2
3 3
4 4
5 5
1,000 500
1,5001,000
2,000
1,500
2,000
2,500
3,000
3,500
2007
2008
2009
2010
2007
2008
2009
2010
2007
2008
2009
2010
2007
2008
2009
2010
Geological Activities (km2)
Onshore (km)
Offshore (km)
Onshore (km2)
Offshore (km2)
Onshore (thousand m)
Offshore (thousand m)
Domestic (million barrel pe)
International (million barrel pe)
2010 2009 5,566
936
-
1,315
562
167.0
14.0
14.2
11.1
5,880
816
9,747
790
4,040
154.3
3.9
14.0
11.0
3D
2D
Seismic Activities
Drilling Activities
Production Activities
As Turkish Petroleum Corporation, we have increasingly expanded our exploration activities in the last decade. In 2010, the deep water drillings of Sinop-1, Yassıhöyük-1 and Sürmene-1 realized with “Leiv Eiriksson”, one of the biggest exploration platforms of the world, are extremely enlightening for TPAO.
Our short term goal, in the light of data obtained from 3 wells drilled, is to reveal hydrocarbon potential in the deep waters of Black Sea and contribute it to the use of Turkish economy. We are excited and aware of that, this aim of our company can open bright and achievable horizons.
In accordance with our company’s vision, mission and strategies, exploration and production activities carried out in 2010 have intensively covered offshore fields as well as the Thrace, Middle Anatolia Basins, Eastern Anatolia, Southeastern Anatolia Regions.
Nowadays, TPAO which sets target for meeting Türkiye’s continuously increasing oil and natural gas demand from own resources, also views and adopts itself with the integration process of international oil companies and carries out its studies for the establishment of a competitive, secure, transparent and balanced market conditions for all oil companies engaging in oil and gas exploration business in Türkiye’s oil market.
In recent years, TPAO having set its vision and mission for meeting Türkiye’s continuously increasing oil and natural gas demand through domestic and international exploration and production means, has made a boom in its domestic investments by setting its new exploration strategy by extending its activities in unexplored basins of Türkiye and especially offshore.
Especially, following Ayazlı gas discovery in the Western Black Sea, new explorations, establishment processes, well drilling programs were carried out and additional drilling operations were performed on offshore Akçakoca. In addition to this, 2D and 3D seismic surveys were realized to reveal the hydrocarbon potential of onshore fields lying along the territorial waters of the Black Sea.
Designations of hopeful structures as a result of exploration studies have great importance for TPAO’s future exploration objectives. To reveal hydrocarbon potential of the region, share investment risk and transfer of the latest exploration technologies, TPAO continued its studies in 2010 to establish joint ventures with foreign oil companies.
We Are Exploring All Offshore Fields of TürkiyeIn 2010, 562 km2 of 3D offshore seismic surveys were realized in offshore Mediterranean Sea. With the evaluation of acquired geophysical data, it is planned to intensify drilling activities on offshore fields in the forthcoming years. With these studies, it has been targeted to give a further fillip to the country’s economy by new oil and natural gas discoveries.
Total amount of offshore seismic surveys realized in the last seven years is much more than the seismic surveys performed during TPAO’s 57 years long history. This situation confirms the importance attached to offshore hydrocarbon explorations in recent years.
Throughout 2010, interpretation studies of seismic datas that were acquired in previous years from the Black Sea, Antalya, Mersin and İskenderun Bays have continued. Farm-out negotiations with oil companies about mentioned fields have continued throughout the year. It is planned to start exploration activities with drilling in the Mediterranean sea (offshore) in 2012.
3 Deep Water Drillings in Black Sea The exploration-drilling activities in our seas, with its peak level of TPAO history, are ongoing with full pace. TPAO realized 3 deep water drillings; Sürmene-1 well drilling through its own means, Sinop-1 well drilling with PETROBRAS-EXXONMOBIL, Yassıhöyük-1 well with CHEVRON.
Together with great enthusiasm and expectations, TPAO has given priority to realize exploration, drilling and production investment programs also at onshore fields.
In 2010, TPAO evaluated geological field survey with 5,566 km2 at the Thrace, Marmara, Aegean, Black Sea, Mediterranean, Central, Eastern and Southeastern Anatolia Regions and realized 936 km 2D, 1,315 km2 3D seismic data acquisition studies.
Drilling ActivitiesIn 2010, TPAO realized most of its drilling activities at Southeastern Anatolia, Thrace Regions and Black Sea offshore fields.
Although drilling of 92 wells were planned in 2010, drilling activities were realized in 103 wells due to good results and achievements obtained and the drilling of 92 of them was completed.
TPAO accelerated its oil and natural gas exploration and drilling activities 2 folds at onshore and offshore fields in the last 5 years. In addition to the explored basins, TPAO has continued its exploration and drilling activities at the unexplored basins such as Syria and Iraq border, Mardin, Ankara, Niğde, Gaziantep, Trabzon, Zonguldak etc. and acquired significant data to determine hydrocarbon potential of these fields.
Oil and Gas WellsGüzeldere-4, G.Şelmo-5 and Köseler-2 wells were drilled in X. Concession Region, completed as “oil wells”.
D.Çemberlitaş-2, 3, G.sarık-2, Karacan-4, 5, 6, Beyazçeşme-3, Sivritepe-101, G.Kırtepe-7R, 8 (jointly by NVT PERENCO) wells were drilled in XI. Concession Region, completed as “oil wells”.
DOMESTIC EXPLORATION AND PRODUCTION ACTIVITIES
18 TPAO 2010 19TPAO 2010
Elbeyli-2, 3, 4, 6, Gökçe-3, D.Karakuş-8, K.Akçeli-2, B.Sarısöğüt-1, K.Eskitaş-1, B.Gökçe-6 and D.Lilan-1 wells were drilled in XII. Concession Region, completed as “oil wells”.
Umurca-O11, Fidanlık-4, 5, Kavakdere-O1, Pelit-1, 2 (jointly by TPAO-AMITY OIL) wells were drilled in I. Concession Region in Thrace Oil Region and completed as “gas wells”. Also, Vakıflar-O8 well was drilled and completed as “oil and gas well”.
Joint Domestic Exploration, Development and Production Activities
Onshore
TPAO-TIWAY OILWithin the framework of TPAO-TIWAY OIL partnership under “The Exploration and Development Agreement”, drilling and production activities in Adıyaman Cendere Field have been carried out throughout the year.
TPAO-NVT PERENCOWithin the framework of TPAO-NVT PERENCO “Joint Venture Agreement”, production from Kastel, Karaali and Yalankoz fields has been ongoing throughout the year. As planned the previous year, the drilling of G.Kırtepe-7 and G.Kırtepe-8 wells were realized under TPAO’s operatorship in 2010. In the light of geological and geophysical activities conducted in the region, the drilling of B.Gercüş-B1 well was completed under the NVT PERENCO operatorship in 2010.
TPAO-AMITY OILUnder the Thrace Basin “Joint Operating Agreement” with AMITY OIL, natural gas and condensate production from Göçerler, Adatepe, D.Adatepe, Velimeşe, B.Velimeşe, Reisdere, Eskitaşlı and Dikilitaş fields have continued throughout the year. Drilling of D.Beyciler-H1 well was realized under TPAO’s operatorship in 2010 and gas discoveries realized in Pelit-1 and Pelit-2 wells drilled with the AMITY OIL partnership. In the scope of 2010 Work Program and Budget, it was planned to conduct 4D seismic study.
In mid 2010, the sale of AMITY OIL to TRANSATLANTIC Petroleum company was realized.
TPAO-TRANSATLANTIC Within the scope of unconventional studies to be conducted at the Thrace Basin and Southeastern Anatolian licences, a Memorandum of Understanding (MOU) was executed by and between TPAO and TRANSATLANTIC on April 9th, 2010.
In the regard of this agreement, re-entry operations are conducted in Kaynarca-1 well at first in Thrace Basin and then re-entry and hydrofrac operations realized in Kepirtepe-1 well.
Offshore
TPAO-PETROL OFİSİ E&P-TIWAY OIL- FOINAVONUnder the ongoing “The Black Sea Joint Operating Agreement”, natural gas production
20 TPAO 2010 21TPAO 2010
from Ayazlı, D. Ayazlı and Akkaya Production Platforms has continued throughout the year. The manufacturing of Akçakoca Production Platform has been completed and it was installed at its location in summer 2010 and was put into production in the first quarter of 2011.
The completion and tie-back operations of Akçakoca-3 and Akçakoca-4 were initiated after the rig GSP-31 was installed on the platform. The sale of Stratic Energy Corp. to Foinavon Energy Inc. was realized and the partnership was then among TPAO-PETROL OFİSİ E&P-TIWAY OIL and FOINAVON.
TPAO-PETROBRAS- EXXONMOBILJoint Activities were realized by TPAO-PETROBRAS-EXXONMOBIL under the Rig Farmout Agreement (RFOA) signed by and between TPAO and PETROBRAS, after PETROBRAS’ transferring its 50%
share to EXXONMOBIL in January 2010. Between February and August 2010, the drilling of Sinop-1 well was realized under the operatorship of PETROBRAS. TPAO has formed a mobile laboratory that would conduct some paleontological studies for the partnership in Samsun.
Within the scope of “Joint Operating Agreement” between TPAO and EXXONMOBIL, CSEM studies were conducted in the first quarter of 2010, source controlled “aeromagnetic” data acquisition studies (CSEM) were carried out in the first quarter of 2011 in order to better identify the prospects. The location is determined by conducting survey studies about the location of the well that is planned to be drilled in the operatorship of EXXONMOBIL in April, 2011. The drilling ship named “Deep Water Champion” is expected to arrive to the location in the second quarter of 2011.
23TPAO 2010
TPAO-CHEVRON In the results of the farm-out studies conducted in Black Sea at licence 3921 since 2009, TPAO and CHEVRON (50% - 50%) started negotiations in order to form a “Joint Operating Agreement” which would cover the drilling of 2 deep-water exploration wells in the Black Sea. The Black Sea JOA became effective on September 16th, 2010 and Parties immediately started the joint technical studies during which the drilling operations of Yassıhöyük-1 well were also initiated. The well was completed as “dry well with gas show” under TPAO’s operatorship in November 2010 and Parties decided to continue joint studies in the light of Yassihöyük-1 well.
Western Black Sea Exploration, Production and Development ProjectTPAO and project partners POAŞ, FOINAVON (STRATIC) and TIWAY OIL continued their natural gas production activities as well as drilling activities continued on Akçakoca Field.
Within the context of Phase I, natural gas production was carried out from 3 sea production platforms out of 7 production wells. At the end of 2010, approximately 470 million sm3 of natural gas were produced. In the scope of studies about engaging Akçakoca field, installation process of the platform (constructed in Costanta - Romaina) in the main pipeline was completed in September, 2010.
In the scope of Phase-II in which TPAO is the operator, test production from Akçakoca-3 and Akçakoca-4 initiated after the connection and system function tests were conducted at Akçakoca platform in March 13th, 2011. The drilling activities of G.Akçakoca-1 well which started in the first quarter of 2011, is continuing. The drilling/production operations, being realized simultaneously in the sea, have been never done before in our country and 360.000 sm3 natural gas is being produced daily from platform by 2011.
Domestic Crude Oil ProductionIn 2010, TPAO produced 12.7 million barrels of crude oil from its fields, which constituted 73% of the total crude oil production of Türkiye. 71% of the total oil production is from Batman Region, 28% is from Adıyaman Region and 1% is from Thrace Region.
The total number of production wells reached to 1,136 by the end of 2010 with the addition of 52 new and and 15 re-completed wells and abandonment of 16 wells.
Serious amount of water was produced from our oil fields as well as oil. In 2010, 107 million barrels of water produced with oil was injected into safe zones in different fields by 92 water injection wells. Within its policy of keeping the production
22 TPAO 2010
at the maximum level, TPAO has continued its domestic reserve development and production activities in 2010. Production problems in heavy reservoir require special technical applications. To prevent the decline in production and to evaluate the current production potential, several reservoir studies were performed.
Batı Raman Field Enhanced Oil Recovery ProjectSince the carbon dioxide (CO2) injection start-up in 1986 in B.Raman, cumulative injection into the field has reached 9.6 billion m3 in the scope of Batı Raman Field Enhanced Oil Project. In order to sustain this amount of injection, 7.2 billion m3 CO2 was produced from Dodan Field. By the end of 2010, Batı Raman's recovered cumulative oil reserves were 103.8 million barrels, 67.9 million barrels of which is the additional oil coming from CO2 injection.
In 2010, 421.9 million m3 CO2 was injected, 286.2 million m3 of this amount was re-produced and 262 million m3 of this produced gas was re-injected into the reservoir to be re-utilized.
Water injection aimed improving CO2 sweep efficiency continued in 2010, in total 235,758 barrels of water alternating with gas was injected into 13 different wells. NaOH augmented water injection was begun from 2 injectors in order to see the effect of chemicals to increase the efficiency of Water Alternating Gas (WAG)
application. 77 thousand barrels of chemically enriched water was injected. In addition to this, drilling operations of 18 new vertical wells were completed.
Raman Field Production Enhancement Project Raman Field production enhancement project was started in 1994 and operations to increase oil production have been continuing periodically by the end of 2010. 16.2 million barrels of additional oil was produced by means of this project. 1 new well was drilled in the field to increase oil production in 2010 and well number increased to 241.
As results of pilot polymer gel injection (MARCIT) done in 7 wells to reduce water-cut values in 2007 that were satisfying, gel injection operations were done in 57 wells throughout the year. Approximately 515 thousand barrels of extra oil production was obtained from these 57 wells.
Gross production rates of 22 wells were changed in 2010. 3 abandoned wells were put into production after gel operation. As a result, approximately 25 thousand barrels of additional oil were produced by these operations in 2010.
Garzan Water Injection Project Garzan Field, which has 300 million barrels oil in place, is one of the biggest oil fields in Türkiye.
Within the scheme of Garzan Water Injection Project, started in 1960 and restarted in 1992 after a long halt since 1983, cumulative injection through 11 wells reached to 68 million barrels in Garzan-B field by the end of 2010, where annual injection was 1.5 million barrels.
In Garzan-C field, cumulative water injection through 4 wells reached to 46.7 million barrels where total annual injection was 700 thousand barrels.
Within the scope of Garzan Water Injection Project, 28.7 million barrels of additional oil in Garzan-B Field and 13.1 million barrels in Garzan-C Field were produced by the end of 2010.
Batı Kozluca Field Water Alternating Gas Injection (WAG) ProjectCO2/WAG feasibility in Batı Kozluca Field was investigated through a reservoir study and promising results led investments for the application. CO2 injection and water injection have continued in 2010.
By the end of 2010, cumulative gas injection reached to 5.86 billion scf and cumulative water injection reached to 800 thousand barrels. The injection process is still underway. In order to expand the application of CO2 injection, additional 12 wells were drilled at the B.Kozluca Field.
Domestic Natural Gas ProductionIn 2010, TPAO’s natural gas production was 260.7 million sm3. 94% of the total natural gas production is from Thrace Region, 5% is from Batman Region and 1% is from Adıyaman Region. The oil equivalent of the gas output is 1.5 million barrels. Thus, TPAO’s cumulative hydrocarbon production reached to 14.2 million barrels by the end of 2010.
Kuzey Marmara and Değirmenköy Fields Underground Natural Gas Storage Facilities Capacity Enhancemend Project
In Kuzey Marmara and Değirmenköy Fields Underground Natural Gas Storage Project, commercial activity was started on April 13th, 2007. Injection and withdrawal operations have been continuing.
Gas demand of our country tends to increase, therefore new storage facilities are urgently required.
For this purpose, TPAO is planning to increase the daily withdrawal capacity of existing facilities up to 50 million sm3/day and storage capacity to approximately 3 billion sm3 within 3 phases by the end of 2016.
24 TPAO 2010 25TPAO 2010
26 TPAO 2010
International activities have made TPAO an important actor in the region since the early 1990’s. Most of the international production is from Azeri-Chirag-Guneshli Project located in offshore Azerbaijan. BTC Crude Oil Pipeline has started operations in 2006. Thus, production from Azerbaijan projects is expected to increase and reach peak levels in the coming years.
After completing in 2006 winter and putting SCP Gas Pipeline into operation, TPAO, as a shareholder of Shah Deniz Project, started first international natural gas production in March 2007.
With this production, TPAO started to meet a part of Türkiye’s domestic gas demand from abroad since July 2007. In addition to Azerbaijan projects, TPAO’s production has been continuing from Kazakhstan fields.
Within the scope of Libya exploration projects, a new oil discovery in the first exploration well drilled in license area 147/3-4 in Murzuq basin was realized in 2009, which was a significant step towards the first oil production in Libya. In 2010, 10 structures were tested with 10 wells. 7 out of 11 wells drilled in the basin were completed as oil well. Libya NOC made the official discovery announcement over 6 structures tested. The exploration period which ended on December 10th, 2010 was extended to June 10th, 2012 by NOC.
TPAO will exploit its reserves in the regional geography and focus on certain countries, priorities of which were determined as a result of global survey conducted throughout the recent years, and gives more importance to increase its reserves. Because of the necessity of adding new reserves and turning these reserves into production immediately to achieve its strategic
targets, international activities become gradually more important. Being aware of the strategic importance of energy for ensuring Türkiye’s security of supply, TPAO has set up the roadmaps and action plans for achieving its objectives in the years ahead.
Caspian RegionIt is estimated that, Caspian Region holds 4% of the world oil reserves and 6% of the gas reserves. Because of the cultural and historical ties, Caspian Region has a special importance and value for Türkiye. As a result of having the significant role in transportation of energy resources to western markets and becoming an energy hub and settling stability in the Region, Türkiye will increase its strategic and geopolitical power in the area.
KazakhstanTPAO conducts its activities in Kazakhstan through a joint venture company, KazakhTurkMunai (KTM) Ltd. in which TPAO holds a 49% share and KazMunaiGas has 51%. KTM Ltd. has one concession licence in Aktau Region and two in Aktubinsk Region of the Western Kazakhstan. Exploration and production activities are ongoing in 7 fields in these three licences.
In 2010, average production of KTM Ltd. was 1,760 barrels/day in Aktau Region and 2,910 barrels/day in Aktubinsk Region with a total average of 4,670 barrels/day.
Since 1993, TPAO has been carrying out its activities in Kazakhstan and intends to grow its portfolio in this country, which is in the focus of interest with its high oil reserves.
By the end of 2010, yearly crude oil production is 1.71 million barrels, cumulative crude oil production is 25.07 million barrels and crude oil reserves are 30.7 million barrels.
Azerbaijan TPAO is currently a participant of three exploration, development and production projects which are Azeri-Chirag-Guneshli (6.75%), Shah Deniz (9%) and Alov (10%) Projects in Azerbaijan. Furthermore, TPAO has a share of 6.53% in the BTC Co. which is carrying out all activities of Baku-Tbilisi-Ceyhan Main Export Crude Oil Pipeline Project and 9% share in South Caucasus Natural Gas Pipeline Project which transports Shah Deniz gas to Turkish-Georgian border.
Azeri-Chirag-Guneshli (ACG) ProjectIn 1994, “The Joint Development and Production Sharing Agreement” for ACG Project was signed in Baku among the State Oil Company of the Azerbaijan Republic (SOCAR) and the consortium constituted by the foreign companies.
Throughout the ACG Project having 5.56 billion barrels of oil reserves, and producing 1.64 billion barrels of crude oil from the beginning of the project to the end of 2010. In 2010, with an average of 825,000 barrels/day, 301.3 million barrels of oil was produced.
INTERNATIONAL EXPLORATION AND PRODUCTION ACTIVITIES
TPAO’s primary business development areas for the short term are determined as Middle East, North Africa and Caspian Region, which hold two-third of the world proven oil reserves.
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ACG Project has been developing in phases. The production started from Chirag Field (the early oil project) in November 1997. The Phase-1 (Development of the Central Azeri Field) was put into production in February 2005. The production of the Phase-2 (Development of the West and East Azeri Fields) were commenced in January 2006 (West Azeri) and in October 2006 (East Azeri).
The production of Phase-3 (Development of Deep Water Guneshli Field) was started up in April 2008. In 2010, the engineering and design studies of Chirag Oil Project (COP) which aims to produce oil from undepleted area between the existing platforms in Chirag and Deep Water Guneshli were completed and Field Development and Construction Decision was approved in March 2010.
Shah Deniz ProjectThe Shah Deniz Structure is located in the offshore South Caspian Sea, 70 km southeast of Baku and 70 km southwest of the Azeri- Chirag-Guneshli Field. The concession has an areal coverage of approximately 860 km2.
In 2001, the Minimum Obligatory Work Program of the Exploration and the Extended Exploration Periods were completed and commerciality was declared.
The Sales and Purchasing Agreement (SPA) between BOTAŞ and SOCAR within the scope of Phase-1 for the natural gas discovered in the Project which had 625 billion m3 natural gas and 750 million barrel condensate reserves and Intergovernmental Agreement between Türkiye-Georgia and Türkiye-Azerbaijan were signed.
According to the SPA, 6.6 billion m3 of natural gas will be delivered to Türkiye for 15 years. Project also supplies gas to Azerbaijan, Georgia and to BTC as fuel. Within the scope of Phase-1, total sale is estimated to be 8.6 billion m3 / year during the plato period.
With the Shah Deniz Phase-1 Field Development and Construction Decision, construction period started in 2003 and commercial production was started on March 7th, 2007 and is currently continuing.
In 2010, 6.9 billion m3 natural gas and 14.7 million barrels of condensate were produced and by the end of 2010, cumulative production reached to 23.6 billion m3 natural gas and 49.8 million barrels of condensate.
For Phase-2, it is estimated that construction decision will be taken in 2013 and first gas delivery will be realized in 2017.
Alov ProjectAlov Exploration Project covers three different prospective structures named Araz-Alov-Sharg in the Middle of the Southern Caspian Sea, having estimated reserves of 385 billion m3 of natural gas and 5 billion barrels of oil.
TPAO joined the Project after signing EDPSA, by an “Agreement on Participating Interest to be Vested” on July 29th, 1998. For the Alov Project, the minimum contractual commitments are 1,400 km2 3D seismic survey and drilling of three exploration wells for the three-year exploration period. Seismic acquisition and interpretation works have been completed, and drilling of first exploration well is waiting for the determination of legal status of Caspian Sea.
Pipeline Projects of TPAO Contributing to the Energy CorridorIn Türkiye, which resides at the intersection of Middle East and Caspian Regions having the major portion of the world oil reserves, the basis of the energy corridor to carry the energy resources to the world market was initiated by the constructions of BTC and SCP Pipeline Projects.
Following the determination of the hydrocarbon potential of The Black Sea, if the expectation of creating a triangular source area is realized, this source will flow through the Anatolian axis to reach the market in due time with confidence.
Being aware of its responsibility in this axis, TPAO has been endeavoring to meet the national oil and gas demand and will continue to increase its effectiveness and control oriented activities throughout East-West Energy Corridor.
Baku-Tbilisi-Ceyhan Main Export Crude Oil Pipeline (BTC) ProjectThe transportation of oil produced in Caspian Region, especially from ACG Project in Azerbaijan to the world markets, in a safe, secure, reliable and environmentally friendly way is continuing through the BTC Project which is the first step of East-West Energy Corridor.
Within the scope of the Project, an approximately 1,768 km long pipeline, with a nominal capacity of 50 million tons/year, starting from Sangachal Terminal close to Baku-Azerbaijan passing by Tbilisi-Georgia and reaching to the Mediterranean Sea at Ceyhan-Türkiye, has been constructed. The physical construction, production, installation and all tests of required facilities, started in April 2003 in all three countries, were completed.
current projects
new ventures
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The first tanker carrying Azeri oil started its voyage to world markets on June 3th, 2006. The inauguration of the BTC Pipeline was realized on July 13th, 2006 at Ceyhan Terminal. Current transport capacity of the pipeline reached to 1.2 million barrels per day using a chemical in order to reduce drag forces.
Currently, transportation of a large portion of ACG oil, all of Shah Deniz condensate and some Kazakh Tengiz and Turkmenian oil is continuing and 287 million barrels of oil was loaded to 366 tankers from Haydar Aliyev Terminal in 2010. Cumulatively, 1.088 million barrels of Azeri and Kazakh Oil have been transported through BTC Pipeline to the world markets with 1,387 tankers by the end of 2010.
South Caucasus Natural Gas Pipeline (SCP) ProjectWithin the scope of SCP Project, Shah Deniz natural gas is being transported to Georgian-Turkish border. The SCP passing through the same corridor with BTC is about 690 km in length.
After commencement of the construction of the pipeline physically in 2004, construction activities have been completed. In parallel with the production activities of Shah Deniz, continuous gas transportation was started on March 7th, 2007.
The pipeline having an investment cost of 1.4 billion USD, is transporting natural gas through Azerbaijan, Georgia, Türkiye and BTC’s pump stations in Azerbaijan and Georgia.
The pipeline has a transportation capacity of 9 billion m3 of natural gas to Turkish border with one compressor station in Sangachal Terminal in line with the terms of AGSC-BOTAŞ Sales and Purchasing Agreement (SPA). However, it is possible to expand this capacity up to 22 billion m3 in a year by adding new compressor stations and/or looping.
In 2010, totally 6.8 billion m3 natural gas was transported and 4.4 billion m3 of this amount was sold to BOTAŞ. The main target of the Project is
to transport the gas that will be produced from Caspian Region to Europa via Türkiye in the future.
North Africa and Middle East Region
LibyaTurkish Petroleum Overseas Company (TPOC), a wholly owned subsidiary of TPAO, has carried out its exploration activities in Libya since 2000 and the drilling operations have continued throughout 2010.
Block NC188-NC189 Exploration ProjectIn the scope of Exploration and Production Sharing Agreement (EPSA) signed between Turkish Petroleum Overseas Company (TPOC) and the National Oil Company of Libya (NOC) on block NC188 in Ghadames Basin and block NC189 in Sirte Basin, the commitments of drilling 5 exploration wells and seismic acquisitions in the block NC189 were completed under TPOC’s operatorship in 5 years exploration period. As a result of evaluation of the well results, block NC188 relinquished and relinquishment procedure of block 189 still continues.
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Block 147/3-4 Exploration ProjectEPSA was signed between NOC and TPOC on December 10th, 2005. Minimum exploration commitment for Block 147/3-4 covering an area of 2,783 km2, was the drilling of two exploration wells and seismic data acquisition during the five years of exploration period.
573 km 2D and 352 km2 3D seismic data acquisition studies were realized in 2007.
First oil discovery was realized by drilling of A1-147/3 well in 2009. In 2010, 11 exploration wells have been drilled and oil discovery announcement was declared for 7 of them. The exploration period which ended on December 10th, 2010 was extended to June 10th, 2012 by NOC. Our expectations are high for the wells to be drilled in 2011 following the stabilization of political conditions in the country.
IraqSince 1994, TPAO has been working closely with the Iraqi Ministry of Oil for exploration, development and production opportunities in Iraq.
In addition to TPAO’s success in first and second licensing rounds organized by the Iraqi petroleum authority PCLD (Petroleum Contracts and Licensing Directorate) in 2009 and awards of Badra and Missan Oil Fields development,
TPAO has offered three bids for the Iraq’s third licensing round and has been awarded for 20 year term gas development contracts for Siba Gas Field as a partner and Mansuriya Gas Field as an operator in Iraq’s third bidding round in 2010.
Badra Oil Field Development ProjectIn 2009, within the scope of second round, TPAO was awarded for a contract to develop Badra Oil Field. The consortium consists of GAZPROM NEFT (operator/Russia), KOGAS (South Korea), PETRONAS (Malaysia) and TPAO. TPAO holds 10% share in the consortium.
The effective date of the signed agreement was February 18th, 2010. The preliminary development plan was completed in 2010 and the activities in the field were commenced.
Missan Oil Field Development ProjectMissan Oil Field is located about 175 km north of Basrah city and includes Abu Ghirab, Jabal Fauqi and Buzurgan oil fields. These fields will be developed by CNOOC (operator, 63.75%), TPAO (11.25%) and IDC (25%).
The Producing Fields Technical Service Agreement was signed on May 17th, 2010. The effective date of the Agreement was December 20th, 2010.
Siba Gas Field Development ProjectKuwait Energy and TPAO consortium won the bid for Siba Gas Field in Iraq’s southern oil hub of Basra. (KEC as operator wtih 60% share and TPAO with 40% share). It is estimated that Siba Gas Fields have 1 tcf gas reserve on place. Capital expenses and operating expenses for the development of the field approximately are estimated as 1.2 billion USD.
Mansuriya Gas Field Development ProjectThe Consortium including TPAO, Kuwait Energy and KOGAS (Korea Gas Corporation) won the Mansuriya Gas Field (TPAO as operator with 50% share, KOGAS with 20% share and KEC with 30% share). It is estimated that Mansuriya Gas Field has 2.6 tcf gas reserve on place.
Capital expenses and operating expenses for the development of the field are estimated as approximately 2.7 billion USD.
Mansuriya and Siba Gas Fields Development Production Service Agreement was signed in November 15th, 2010.
Other CountriesIn addition to the activities mentioned above,TPAO has been continuing to search and negotiate for business opportunities in other hydrocarbon rich regions such as Russia Federation, Indonesia, Sudan, Yemen, North Africa and South America.
Within the scope of using advanced technology, 2D seismic data acquisition system with 240 active channel capacity was re-designed and converted to 3D seismic data acquisition system with 1,440 active channel capacity.
Through this system, shot number per km2 was reduced and also cost reduction and time saving were obtained. In parallel with accelerated exploration activities, data processing capacity of seismic crews was expanded through updating technology in Seismic Data Process Center.
3D Seismic Interpretation and Simulation System was put into operation in May 2005 in order to minimize the risk factor in hydrocarbon exploration and to carry out integrated and more effective seismic data surveys in the interpretation systems through the goal of raising the discovery success ratio.
Data Bank installation studies were initiated for easy access, sharing and protection of data used for exploration activities. The field geology crews were equipped with GPS and tablet PC in order to study in an efficient and effective way.
Deep Water Drilling TechnologyTPAO is continuing its drilling activities in Black Sea within the context of joint exploration and development projects by intensifying its offshore exploration activities in recent years.
Within the framework of joint activities with bp, TPAO completed the first deep water drilling in the Eastern Black Sea in 2006 (Hopa-XI) and gained a significant experience in deep water drilling technology.
Moreover, by bringing drilling platform “Leiv Eiriksson” to offshore Sinop, in partnership with PETROBRAS, deep water drilling studies were completed in Western Black Sea. TPAO continues its studies to determine the offshore hydrocarbon potential of the Black Sea and is increasing its efforts to discover new fields for providing added value to the national economy.
In the context of deep water drilling activities, TPAO completed the drillings of Sinop-1 well with partnership of PETROBRAS-EXXONMOBIL and of Yassıhöyük-1 well with partnership of CHEVRON in 2010. The operations are still going on in Sürmene-1 well drilled by TPAO’s operatorship itself.
Oil sample obtained from Sürmene-1 well is an important milestone for TPAO to reveal the hydrocarbon potential of The Black Sea.
For the wells drilled in international standards, TPAO worked with more than 45 service companies. A new team is formed within TPAO Drilling Department, combining technical expertise of well planning, contracting and administrative branches and this new team has worked together with the consultants and third parties in an effective environment.
Modernization of Drilling RigsFor the drilling operations, renewing current rigs and purchasing new ones processes have been accelerated. A 1,500 HP AC Rig was ordered from National Oil Varco (NOV) and obtained in 2010 to be used in Batman District Management drilling activities. This rig is “Ideal Rig” model of NOV and is safe, easy to install and is an electrical rig that works with AC.
Production Field Development TechnologyAll oil and natural gas fields are monitorized actively by multidisciplinary teams using special software which have regularly updated digital database and by broad communication network system created among center and fields.
Reservoir model can be created and petrophysical rock properties such as porosity and permeability and distribution of reservoir can be monitored easily by reservoir modeling and simulator. Besides, pressure and gas/oil/
TECHNOLOGY AND SERVICES
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TPAO, by using the latest technology in the world oil sector, develops its strategy according to the competitive environment in the sector and conducts its activities effectively, efficiently with low cost by saving time.
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water saturation changes by production can be observed. Thus, regions in the field that are not drained can be determined. By using different production scenarios, best case can be obtained to get the highest recovery factor for the field.
By means of reservoir and well analysis software, production performance of both field and each well in the field can be observed historically. Well cross sections, digital logs, well completion operations and well performance are being monitored simultaneously.
Moreover, future production forecasts can be made by “Decline Curve Analysis”. Also field/well, production/reserve estimation of new drilled wells can be made by evaluating well test data by using advanced software. Reservoir parameters such as effective porosity, water saturation which are obtained from log interpretations are the most important parameters in reserve calculations. In this objective, digital log data of
the wells are processed with advanced software and parameters required for calculations are obtained.
As a result of these technological and scientific studies, new production well locations, new production zones in a reservoir, suitable secondary production method in the field and appropriate warning methods to improve the performance of existing wells can be determined if needed and field production evaluation can be carried out easily.
Research and Development TechnologiesIn accordance with the policy of following innovations in technology, TPAO has concentrated on technological investments of exploration, drilling, well completion, production and research center. The knowledge power gained through RD studies and new technology are reflected to the exploration and production activities and also to laboratory supported projects.
Research Center Technologies• Isotope Geochemistry,• Digital Core Imaging,• Determination of Source Rock Kinetic Parameters,• Surface Geochemical Prospection,• Soil Gas Analyses,• SEM with Low Vacuum,• Spectral Core Gamma Ray Logger,• Automatic Thin Section System,• Determination of Solid Phase Behaviour under Reservoir Conditions,• Interfacial Tension and Contact Angle Measurements,• Reservoir Conditions Core Flood System• GC Analysis to Determine Oxygen Compounds in Gasoline, Fatty Acid in Biodiesel,• LC Analysis for PAH (Poly Aromatic Hydrocarbons) Measurements of Diesel and Environmental Samples,• Computer-Aided Mud-Cement Systems,• Mobile Laboratory in the Field and the Well Site,• Oxidation Stability Tester,• ICP-MS,• FTIR,• Total Sediment Tester,• Gum Content Tester,• Micro Carbon Residue Tester,• Lubrication Tester.
Data Acquisition with Geophysical Methods
Seismic Data AcquisitionSeismic data acquisition has been carried out by Geophysical Operations Department with three Seismic Crews. Seismic Crew-1 having 5 units of M26 HD/623 B P type vibrators enabled GPS system is operated by “Vibroseis” method. Seismic Crew-1 has been operating in 3D seismic data acquisition with Sercel-428 XL
type recorder and it has 12 receiver lines, 120 receiver channels, totally 1,440 active recorder channel system. Crew-1 has 2,500 channel capacity.
Seismic Crew-2 is operating with “Dynamite” as an explosive energy source. 14 Heavy-Weight Rigs (Iveco 6x6) Truck Mounted Drills are being used to locate the energy sources. Sercel-408 UL type recorder is being used by Seismic Crew-2. This crew generally operates 2D and 3D Seismic data acquisition. For 3D acquisition, the crew can operate up to 12 receiver lines, 120 receiver channels, totally 1,440 active recorder channel system. Crew-2 has 2,300 channel capacity.
Seismic Crew-3 having 5 units of NOMAD 65 type vibrators enabled GPS system is operated by “Vibroseis” method. Seismic Crew-3 has been operating in 3D seismic data acquisition with Sercel-428 XL type recorder and it has 12 receiver lines, 120 receiver channels, totally 1,440 active recorder channel system. Crew-3 has 2,500 channel capacity.
All 3 Seismic Crews have been operating with Leica GPS 1,200 system as topographic instruments, while quality control and preplanning studies are performed by EGHAS software.Quality control procedures have been applied by all seismic crews.
Furthermore, seismic field design, topographic quality control, recorder quality control and static analyses have been applied while performing Seismic Data Acquisition Services.
Non Seismic Data Acquisition Non-Seismic Data Acquisition surveys are carried out by one Gravity and Magnetic Acquisition Crew under Geophysical Operations Department.
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In these systems, 110 TB disk capacity is on EMC, HITACHI and IBM disk units. In addition to this, ADIC and IBM tape libraries with approximately 300 TB capacity and expandable structure, backup and disaster recovery systems are being used.
GIS and Remote SensingThe management of all datas like topographic map and other maps, satellite images, geodesic datas, geophyisc seismic, gravity/magnetic datas, cultural datas that are required in the studies of TPAO and correction of vector datas are realized with CBS approach and instruments.
In the scope of these studies, the digitazing of geological maps produced with field surveys by TPAO staff and unification of these maps as vector datas with CBS approach is a current project that is studied on intensively and livingly. Additionally, it is planned to conduct studies about unification of obtainable vector topographic maps with CBS approach.
3D Visualization and Interpretation CenterTPAO has been using 3D seismic interpretation and simulation system since May 2005 in order to minimize the risk factor in hydrocarbon exploration and to carry out integrated and more effective seismic data surveys in the interpretation systems for raising the discovery success ratio.
Data BankToday, energy companies have a huge amount of well and seismic datas. One of the problems that they come across is to archive these datas efficiently and securely.
PetroBank® MDS™ is a software that enables its users to access easily, securely to their exploration and seismic, well, production and other technical datas online.
In this context, the project that enables the management and storage of all datas of TPAO, also enables to digitize and store archive folders. In regard of this, data loading process is still ongoing in 2010.
Well Geology Services
Mud Logging Unit (MLU) SystemsBy MLU systems, which provide services for both our Corporation's and joint-ventures' modern gas and exploration well pursuits, data that belongs to geological and drilling disciplines are registered methodically and provided for the service of relevant project and management authorities.
Real Time Visualization SystemWithin the advanced technology and in accordance with requirements of our Corporation, Real Time Visualization Project which had been started to be built up in 2007, was put into service in December 2008, succeeding the test activities completed in the last quarter of 2008.
Research Center Laboratory ServicesIn 2010, technical services, analyses, sample preparation, projects, consulting and training programs were performed on due basis requested by universities, industrial foundations, domestic and foreign oil companies operating in Türkiye and abroad. On behalf of the private domestic and foreign oil companies, sedimentological, mineralogical-petrographical, paleontological and geochemical analyses were carried out.
Additionally, engineering and consulting services were given in domestic and international drilling wells which are totally 52 including 37 onshore, 2 offshore and 13 Libyan wells. Moreover, performance and comparative performance tests were conducted with the cement samples.
Research Center has provided field services and consultancy during the course of water shutoff treatments in 9 wells in Karacan, Sarıcak and G.Sarıcak fields.
In the framework of Research Center Laboratory Services• Stratigraphy,• Sedimentology and Reservoir Geology,• Drilling Technology,• Reservoir Engineering,• Production Technology,• Organic Geochemistry, Laboratory services were provided.
Seismic Process Applications• 2D/3D Conventional Seismic Processing,• Refraction Static,• Signal Processing,• Signal Enhancement,• Multiple Attenuation (RADON/SRMA),• DMO,• 2D/3D Post Stack Time Migration,• 2D/3D Pre Stack Time Migration,• 2D/3D Post Stack Depth Migration,• 2D/3D Pre Stack Depth Migration,• 2D/3D AVO,• VSP Processing,• Long Offset Seismic Line Process (2D PSTM and PSDM),• Seismic Modelling.
Seismic Data Processing Softwares 2D/3D onshore and offshore data processing has been realized by Focus and Geodepth softwares of Paradigm Company. Also, Thrustline Softwares of Geotomo Company have been used to solve problems in Southeastern Anatolia Region Thrust Zone.
Interpretation SystemsTPAO has systems in order to meet the demand of softwares and hardwares for oil exploration and other requirements. For interpretation systems, CBS system and other applications, ORACLE data base is being used.
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Research Center Training Activities• Applied Well Control,• Applied Lithostratigraphy and Sedimentology on the Tertiary, Mesozoic and Paleozoic Sequences of Southeastern Anatolia Petroleum Region,• Biostratigraphy• Sedimentology of Fan Deltas (Field Course in the Antalya Miocene Basin),• Clay Mineralogy and Microanalysis Techniques (XRD/SEM/EDS) and Their Usage in Exploration, • Applied Drilling Fluids Technology,• Matrix Acidizing,• Core Analyses,• PVT Analyses,• Oilfield Water Treatment and Injection Quality Determination,• Corrosion Control in Oil & Natural Gas Production, and other training activities were provided.
Drilling ServicesThe basic principle of our quality policy is to supply drilling services for TPAO’s and our customers’ exploration and production activities through meeting their increasing requirements and expectations with high quality and relevant cost.
While conducting drilling activities with highly experienced staff, our target is to drill the wells in a safe, secure and high quality manner with low cost by applying the latest technology.
TPAO Drilling Department provides drilling, casing deployment, drilling for core plug, well control, air-foam-low pressure drilling services with the rigs having various drilling capacity.
In this context;Drilling Experiences in 2,708 wells,Deep Well Experience (7,216 m),Directional and Horizontal Wells,Multi Lateral Well Drillings,ERD (Extended Reach Drilling).
Well Completion ServicesWell completion services, comprising Workover, Logging and Technical Operations branches, provide services in Türkiye and abroad in line with our Corporation’s objectives. Workover, cementing, acidizing, DST, logging and perforating operations have been conducted in oil, natural gas and geothermal wells by following high standards.
Workover Operations83 completion, 115 recompletion and 3,858 well repair jobs were performed by utilizing 13 workover rigs and 7 rodpuller rigs in 2010.
Log OperationsTotally 510 logging and perforating jobs were accomplished in 2010.
Technical OperationsIn 2010, 488 cementing jobs (199,653 tons cement was used), 281 acidizing jobs (605,652 Gal 30% HCl was used) and 138 DST jobs were performed.
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TPAO Research Center, established in 1974, has a capacity to perform over 400 different types of analyses and tests with its 27 different laboratories and 81 well-trained, experienced staff.
Our Research Center provides projects related to Research and Development studies, consultancy services and is an efficient Research Center with its expertise experiences.
In this context, in parallel to the current studies, research and evaluation studies have been carried out to find solutions to the problems encountered in the well and field applications by geology and oil-natural gas services.
A total of 37 projects, which are in collaboration with Exploration, Production, International Projects, Occupational Safety and Environmental Protection Departments, were performed in the Research Center during 2010. Besides these projects, 4 university projects were supported.
Quality control tests were conducted in the Geology and Engineering Laboratories within the scope of these projects. The overall number of tests and analyses is 43,536. 67 reports were prepared related to these activities. Throughout the year, totally 3,128 man/day of field engineering services and field works were carried out in domestic and international operations of TPAO.
The analysis of 4,000 soil gas samples collected from Nevşehir/Kozaklı area by using Surface Geochemistry Prospecting Techiques were completed and the final report was prepared.
Exploration studies based projects• Western Black Sea Offshore Project,• Black Sea Offshore and Onshore Projects• Eastern Mediterranean Neogene Project• Middle Taurides Mesozoic Project• Kayayolu-Kastel Fields and Surrounding Area Evaluation Project,• Şambayat Field Reservoir Facies Description Project,• Güney Kırtepe Project, • “Unconventional Reservoir” Project,• Southeastern Anatolia Genetic Evaluation of Group I Petroleums Project,
• Geochemical Surface Prospection of Kozaklı District,• Description of the Ceylan- Soğucak Facies of Thrace Region (Uzunköprü) Project,• Niğde-Ulukışla Region Petroleum System Project,• Libya Project,• Iraq Project.
Production studies based projects• Batı Raman Enhanced Oil Recovery Project Field,• Raman Field Water Shutoff Project,• Sedimentology, Characterization and Geochemistry Projects of Raman Field Reservoirs,• Determination of High Temperature Gels for Water Shutoff,• Determination and Elimination Studies of Scale Tendencies in Production Waters of Raman Field,• Enhanced Oil Recovery Process for Extra Heavy Oils,• Determination and Elimination Studies of Scale Tendencies at Kurkan Fields.
RESEARCH CENTER
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TPAO took its place among major oil companies in its region with its contemporary, dependable, modern & accredited laboratories at an international level.
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In the scope of Occupational Safety and Environmental Protection, the project of “Management of Waste Water” resulted by petroleum and natural gas is carried out with TÜBİTAK and İTÜ Environmental Engineering Department.
“Applied Well Control Courses” proper to the IWCF Certificates was given to the TPAO’s technical staff coming from national/international companies by TPAO’s engineers and technicians in the scope of the related procedure.
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16 Applied Well Control Courses were carried out for 160 personnel consisting of engineers and technicians. 67 IWCF Well Control Certificates, 151 TPAO Well Control Certificates and 9 TPAO Certificates of Course Completion were granted to the successful trainees in 2010. Totally 377 trainees, from both TPAO and other companies were given technical trainings on 14 different subjects by these courses.
Research Center Laboratory ServicesIn the Geology Laboratories, analyses were performed mostly related with biostratigraphy (micropaleontology, nanoplankton and palynology), sedimentology (petrography, clay mineralogy, scanning electron microscope-SEM/EDS, lithology, sequence stratigraphy and reservoir evaluation), geochemistry (gas, oil, source rock, organic petrography, oil and gas origins, isotope analyses, kinetic parameters, oil-oil and oil-source rock correlations, reservoir geochemistry, mathematical modeling, evidence analyses, oil systems and potential with informing samples) subjects.
In drilling, reservoir and production technologies laboratories studies and analyses related to drilling fluid and cement program, additives quality control, rock mechanics-well bore stability simulation, simulation of hydraulic and acid fracturing, basic and special core analyses, reservoir fluids (PVT) analysis and EOR subjects, corrosion and scale control, injection water quality, fuel oil analyses, are conducted.
The Accreditation Registration of TPAO Research Center Laboratories was renewed for four years in 2010 as a dependable, contemporary arbitrator laboratory at an international level accordance with the TS EN/ISO IEC 17025 “General Requirements for the Competence of Calibration and Testing Laboratories” standards, total of 34 analyses on the following titles reaccredited;
• Petroleum Product Analyses,• Water Analyses,• Drilling Fluids Additives Analyses,• SEM/EDS and Clay Minerals Analyses,• Biodiesel Analyses.
As a result, all 2nd level tests planned for 2010 were accredited for gasoline, diesel and fuel-oil.
Today, due to increasing importance of occupational safety and environmental protection, accidents and occupational diseases prevention and work productivity have become more considerable.
In regard of this, target results have consistantly been followed in order to develope occupational safety and environmental protection policies by creating HSE performance parameters.
In our Corporation, parallel with increasing exploration, drilling and production activities, human health, occupational safety and environmental protection activities are carried out extensively by new projects.
Occupational Health and SafetyRegarding all risk levels of activities, TPAO aims at eliminating or mitigating the risks to the acceptable levels. In risk studies; periodic audits are conducted for detection of risks, researching the accident causes, determining the hazards, detecting the unsafe ambience and unsafe actions.
Considering the work conditions, suitable and standard Personal Protective Equipments (PPE) were supplied for working staff. Fire Protection Trainings and drills were conducted to eliminate fire risks. Deficiencies were detected and eliminated reviewing the current systems.
Additionally, the primary health service requirements of our staff are provided at Corporation Health Center.
Environmental ProtectionBasic Environmental Projects regarding environmental issues have been conducted in order to inherit a clear atmosphere, clean water and a clean environment to the next generations.
In District Managements, rehabilitation activities have been performed in order to eliminate or mitigate the land pollution. Achievement in 2010 is higher compare to 2009. The success percentages in Districts are 96% for Batman and 81% for Adıyaman. Fortunately, there was no pollution in Trakya District.
Environmental Protection Procedures were prepared in order to increase the efficiency of Environmental Management System. Complying with environmental legislation, bioremidation, stabilization and neutralization acitivities and mud-pit rehabilitations in drilling sites were conducted to prevent environmental contamination resulting from field activities.
OCCUPATIONAL SAFETY AND ENVIRONMENTAL PROTECTION
46 TPAO 2010 47TPAO 2010
Environmental Protection Projects carried out by TPAO throughout in 2010;
• Emergency Intervention Planning Activities• Waste Water Management Project (TÜBİTAK-KAMAG Project)• Drilling Waste Water Management Project• Comparative Application Project of Bioremidation Products• Recycling Waste Oil by Mixing it into Crude Oil• Waste Water Disposal Management • The Use of Consumable Environmental Materials and Equipments• Western Black Sea Off-Shore Project• Deep Water Off-Shore Drilling Projects;• Management Studies on Waste Water Resulted from Off-Shore Gas Production
In the scope of Waste Management; medical wastes like papers, batteries, toners, cartridges are collected for recycling.
In 2010, 1,406 staff took part in Occupational Safety and Environmental Protection trainings that increase gradually.
Nowadays, possessing occupational safety and environmental protection consciousness means develeopment for societies and also means competitive advantage for companies.
With its staff’s great endevaour, dedication and rooted company culture, TPAO has been conducting its activities for 57 years with its worldwide technological infrastructure and qualified manpower that represented our corporation successfully in international projects.
TPAO continuosly invests in human resources development in line with its vision to become regionally effective world-class energy company meeting Türkiye’s oil and natural gas demand and to be the most desired company to work with.
“Performance Management System”, imp-lemented to increase the performance of our staff, is revised every year with the experience gained throughout years and is moving towards to become a system easier for users and giving feedback to the managers directly.
Work Analyse Project Humanbeing is the most valuable source in institutions in order to compete in sector conditions that globalization requires. Thus, while investing in humanbeings, institutions have to develop and implement systems.
In this scope, Work Analyse Project that contributes to the integration of “Modern Human Resources Functions” to our Corporation’s structure, started in 2009 and datas obtained from 1,164 people through observation and interview method. In the results of these datas, studies are still ongoing.
By the end of 2010, total number of employees is 4,708; 1,601 in General Directorate, 1,740 in Batman, 466 in Thrace and 901 in Adıyaman District Management.
TPAO’s qualified and experienced staff bearing many ethical principles, such as merit, effectiveness, team work, communication, self-efficiency for coping with the changes and responsibility, will carry TPAO to great success in the future.
Continuous TrainingAll corporations need qualified staff, who can help reaching the corporation’s goals and objectives. Objective of training and development activities
is to equip staff with the skills and knowledge that will enable them to contribute to the targets of the corporation. Within this scope, training and development courses were accelerated for the staff to follow up-to-date information and developing technology.
In this context, a total of 4,659 staff, 4,423 in Türkiye and 236 abroad, participated in various training programs. Within the scope of orientation training program, new employees of different departments have been informed of our field activity, visited oil fields in the District Managements and carried out onsite inspection.
Life Quality of the EmployeesTPAO believes that self-sacrificing studies and high performance of the employee depend on high life quality. Based on this belief, various social activities such as spring festival, bowling, dart, soccer and tennis tournaments have been arranged in order to increase motivation of the employees. These activities also provide communication required for the company culture to be effectuated.
48 TPAO 2010 49TPAO 2010
Besides, TPAO offered holiday oppurtunities for the employees with their families in its own Social Complex in Güllük/Muğla.
TPAO uses competence
techniques related to
the personel development abilities and
analytic thinking in addition to the technical knowledge.
HUMAN RESOURCES
TPAO, having a dynamic Human Resources System, believes that success can only be achieved through highly motivated, expert individuals.
Batman District ManagementIn Batman District Management exploration, drilling and production activities of crude oil and natural gas, which are vital inputs of national economy, have been carried out continuously since 1954.
The first oil discovery in Türkiye was realized at Raman Field, in 1945 by MTA and the first production in economical means was realized in Raman-8 well in 1948. After the foundation of TPAO in 1954, Batman District Management played a leading role in the exploration, drilling, production and refinery activities of the country.
In 2010, the development activities were also continued in Karacan Field, which was explored in 2009. In this context, 3 new wells were drilled in 2010. At the same time, Köseler and Güzeldere Fields in Batman Region and Güney Sarık Field in Diyarbakır Region were explored.
Revision operations related with production pipelines, electricity line and surface facilities are ongoing at the fields joined to our corporation due to license revolving. In this context, project of a new production station is completed in Kurkan Oil Field.
With the aim of protecting the soil and preventing soil pollution during and after hydrocarbon exploration and production activities, Batman District Management concentrated on the implementation studies of bioremediation method used by the petroleum companies worldwide, in addition to the rehabilitation studies of contaminated soil through neutralization and stabilization methods.
Batman District Management has also played an active role in the economic and social development of the region while conducting all these activities.
DISTRICT MANAGEMENTS
50 TPAO 2010 51TPAO 2010
Our District Managements, while conducting their activities, are playing a great role in the development of the social and economical life of the regions.
Batman has gained a great dynamism in the economical and social areas with the discovery of oil and the establishment of refinery. Today, Batman, as being located around TPAO complex and plant, has a great deal of contribution to the national economy by increasing the employment volume in the region.
Thrace District ManagementTPAO initiated its exploration and drilling activities in Thrace Basin with Uluman-1 well in 1960. As a result of the operations performed in Thrace District, the first economical natural gas discovery was made in 1970 at Hamitabat and Kumrular Fields and the first oil discovery was realized in K.Osmancık and Deveçatak wells which were drilled in 1973-1974.
Silivri Underground Natural Gas Storage Facility was established in 2007. After the development period, the reproduction activities continue successfully in the 4th Storage Phase. During this phase, 1,494 million sm3 of natural gas was injected to Kuzey Marmara and Değirmenköy Fields and 1,178 million sm3 natural gas was reproduced from our reservoirs.
Taking the importance of gas storage units in gas supply security and energy independence of our country into consideration, TPAO has initiated studies to increase its storage capacity to approximately 3 billion sm3 and its re-production capacity to 50 million sm3/day and initiated the necessary works.
TPAO contributes to the economy of the Thrace Region by providing low-cost energy input to the industrial plants that play significant roles in the national economy.
Adıyaman District ManagementIn 1954, after the acceptance of Petroleum Law No: 6326, foreign companies came to Türkiye for petroleum exploration. In 1958, the first petroleum exploration of Adıyaman Region was made by California Asiatic Oil and Texaco Overseas Petroleum at Kahta-1 well.
In 1988, after the discovery of Karakuş Field in the results of exploration activities, G.Karakuş (1989), Cendere, K.Karakuş, Beşikli and O. Sungurlu (1990), D.Beşikli, Bakacak, Tokaris and İkizce Fields (1991) were also explored.
Adıyaman District Management that has a great role in the development of social and economical life, has contributed a lot to the economy of the region and the country.
Turkish Petroleum International Company LTD. (TPIC)TPIC was established in 1988 in Channel Islands/Jersey, to operate in all branches of oil industry comprising exploration, drilling, field development, production, transportation, refining, crude oil and oil products trading and marketing.
TPIC focused its exploration, production and service activities in Colombia and Iraq, at the same time continues its business development activities in Venezuela, Ecuador and Bolivia.
Colombia Activities
Gonzalez BlockTPIC has been conducting joint exploration activities with its partner ECOPETROL; National Oil Company of Colombia, in Gonzalez Block in Catatumbo Basin since February 2008. TPIC serves as the Operator of the block and also has 50% participating interest in the project. The first exploration well, Rio Zulia West-3 (RZW-3), was completed in March 2010 with oil discovery. The second well, Rio Zulia West-4 (RZW-4) was spudded in December 17th, 2010 and the drilling operations are ongoing.
Maria Conchita BlockIn 2009, TPIC signed an Exploration and Production agreement for the Maria Conchita Block located north of Colombia in the Guajira Basin with National Hydrocarbon Agency - Agencia Nacional de Hidrocarburos (ANH). TPIC holds 51% of the shares as well as serving as the operator whereas Genel Enerji holds 40% and Multiservicios RJT LTDA holds 9% of the shares. In the first exploration phase in 2010, 120 km2 3D seismic operations were completed. The first well will be drilled in the second phase in 2011.
Iraq ActivitiesWith the advantage of having access rights to logistic and maintenance units of TPAO located close to the Iraqi border, TPIC participates in tenders for different fields throughout Iraq and intends to increase the service operations in Iraq. Accordingly, TPIC participated in the tender opened by SOC (South Oil Company), the National Petroleum Company of Iraq, for drilling and completion of 45 wells and it has been planned to drill with 3 rigs in 31 months. The tender was approved, the agreement negotiated and thereafter signed on March 14th, 2010. The project is ongoing within the 1st and 2nd wells.
Kazakhstan ActivitiesFounded in 1999, TPIC Aktobe Branch Office is successfully conducting projects in Kazakhstan. Within the scope of Kazakhstan activities, drilling and well completion services were performed for Zhaik Munay Company and Kazakh Oil Aktobe (KOA) Company.
TPIC, within the concept of 5 wells drilling contract signed with KazakTurkMunai (KTM) Company on April 22th, 2008, continues the drilling operations commenced on October, 2008 in 5th well.
Türkiye ActivitiesWithin the scope of activities in Türkiye, TPIC continued its drilling and well completion services for TPAO, BM Construction and Engineering Co., Güriş Construction and Engineering Co., Zorlu Energy and Sanko Holding.
Oil Field ServicesIn 2010, TPIC continued to provide oil field services by increasing the number of crews both in Türkiye and abroad and provided well completion and workover services in 218 wells.
In addition to drilling 52 oil wells, 13 geothermal wells were drilled in Türkiye.
52 TPAO 2010 53TPAO 2010
With the experience gained through working in various weather conditions and challenging work environments like high pressure, high temperature and deep wells, TPIC continues to provide petroleum services. These services are supported with maintenance and technical service.
Oil Products TradeBeginning with SOMO in Iraq, TPIC has expanded its oil trade activity area with the experience gained throughout the years and extended its region of operation to Iran, Turkmenistan, Syria and Turkish Republic of Northern Cyprus in addition to Iraq.
The fuel oil transportation project by sea route, which started in 2009, has successfully continued in 2010 from TÜPRAŞ Aliağa Facility to Cyprus Electricity Authority’s (Kıb-Tek) Teknecik Terminal. Since November 2009, total of 230,000 tons of fuel oil have been dispatched. The Fuel Oil Trade Contract was extended 5 more years with the contract signed with Kıb-Tek in January, 2011.
To meet the demand of Iraq Electricity Ministry in Bagdad and Necef Regions, 100,000 tons of gasoil was delivered from Basra Terminal within the concept of contract signed with SOMO in 2010.
SUBSIDIARIES AND ASSOCIATED COMPANY
Initiated with the protocol signed between Turkish and Syrian Energy Ministry, LPG trade, which has commenced in 2008, has continued during 2010. 32,000 tons of LPG was delivered in 2010 over Türkiye to Syria Halep Region with a total of 155,000 tons of LPG trade achieved in this project.
TPIC continued its Caspian Region activities by trading total of 15,000 tons of fuel oil and gasoil from Turkmenistan by sea. Under the mentioned project, since 2008, 255,000 tons of gasoil, gasoline and fuel oil were traded.
In order to strengthen the planned bunkering project in Ceyhan Region, to understand the bunkering market and to fulfill the necessary amenability for the project, TPIC started small amount of bunkering sales in December 2009. Since then, 700 tons of bunkering sales have been sold.
TP Petroleum Distribution Inc. (TPpd)TP Petroleum Distribution Inc. was founded on February 16th, 2006 as a subsidiary of TPIC. Due to requirements, TPpd’s capital, which was 50,000 TL in the beginning, is increased in the following years and reached to 100 million TL.
With the target to reach market share of 10% with 750 dealers in the Turkish Market by 2020, TPpd continued to expand its gas station networking activities in 2010. Besides providing trustable and principled working relations, TPpd ensured government reliability. By the end of 2010, TPpd achieved a number of 102 dealers.
TPpd obtains the distribution products from TÜPRAŞ Refineries and other distribution companies’ storage facilities (as trading between distributor companies) in Türkiye and from TPIC as imported products. Currently, TPpd has 14 different supply points from 6 different suppliers.
Since its establishment, TPpd, which has continued growing, has become the 8th biggest distributor with market share of 2% in the and of 2010.
Turkish Petroleum Overseas Company Ltd. (TPOC)TPOC Ltd. was established in Jersey, Channel Islands in 1996 as an affiliate of TPAO to carry out all activities related with technical and commercial oil and gas trade. TPOC Ltd. currently participates in Shah Deniz (9%)
and Alov (10%) Projects in Azerbaijan sector of the Caspian Sea. TPOC is an operator in exploration projects in Libya, with 51% share in NC-Block-188 (Ghademes Basin) and NCBlock- 189 (Sirte Basin) and with 100% share in NCBlock-147/3-4 (Murzuq Basin). TPOC Ltd. has 3 offices in Iraq Bagdad, Libya Tripoli and Azerbaijan Baku.
Turkish Petroleum BTC Ltd. (TPBTC Ltd.)TPBTC Ltd. was established in Cayman Islands on February 20th, 2002 in order to participate in Baku–Tbilisi–Ceyhan Main Export Crude Oil Pipeline (BTC) Project, which has a primary objective of carrying the ACG and other Caspian Region oil to international markets and the Project Companies (BTC Co., BTC Int. Investment Co. and BTC Finance B.V. ) on behalf of TPAO. TPBTC Ltd. is wholly owned by TPAO and currently has a 6.53% share in the BTC Project and related companies.
Turkish Petroleum SCP Ltd. (TPSCP Ltd.)TPSCP Ltd. was established in Cayman Islands on May 24th, 2002 in order to participate in South Caucasus Pipeline (SCP) Project, which aims to transport Shah Deniz gas, and related project companies in accordance with the project agreements on behalf of TPAO. TPSCP
54 TPAO 2010 55TPAO 2010
Ltd. is a party of SCP Project agreements which have been signed on February 27th, 2003. TPSCP Ltd. has 9% share in the SCP Project.
KazakTurkMunai (KTM) Ltd. Joint CompanyKazakhTurkMunai (KTM) Ltd. Joint Company was established on January 9th, 1993 by the Foundation Agreement signed between TPAO and the Kazzarubejgeologia State Enterprise (KZBG) of the Kazakhstan’s Ministry of Geology and Preservation of Underground Resources. By this agreement, setting the shares as KZBG 51% and TPAO 49%, KTM Ltd. has acquired hydrocarbon exploration and operating rights in 7 blocks in 4 different regions of Western Kazakhstan.
Besides providing trustable and
principled working relations, TPpd
ensured government reliability. By the
end of 2010, TPpd achieved a number
of 102 dealers.
56 TPAO 2010 57TPAO 2010
Although the damage of oil exploration and production cause to nature is known, the activities to minimize this damage are generally overlooked. As Turkish Petroleum, we feel debted to posterity that we are entrusted the nature for carrying out all kinds of protection conditions determined by laws during and after our oil exploration and production activities.
58 TPAO 2010 59TPAO 2010
Domestic Investment and Operational ExpendituresTPAO's domestic budget wich was 50 million dollars at the beginning of 2000, reached to 390 million dollars in 2010 and to 823 million dollars in 2011. Operational expenditures were 546 million dollars in 2010 and are planned to be 562 million dollars in 2011.
Most of our investments are comprised of especially exploration and drilling expenditures in offshore. Great oil discoveries are resulted by intensive exploration investment programmes. It is expected that this great increase in investments will create a chance to find new oil sources.
International Investment and Operational ExpendituresIn 2010, TPAO conducted intensive work development activities in South America, Russia and Middle East Region which have rich hydrocarbon reserves. Besides, in Azerbaijan and Kazakhstan production activities, in Libya exploration activities and in Iraq exploration, production activities and investments have continued.
In this context, TPAO's international investment budget is realized as 350 million dollars in 2010 and it is foreseen that it will be 595 million dollars in parallel to our ever-increasing work programme in 2011.
million USD
Capital ExpendituresExplorationDrillingProductionOther
Operational Expenditures
Cumulative
FINANCE
2010
(thousand USD)
Azerbaijan
ACG Project*
Shah Deniz Project
SCP Project
BTC Project
Kurdashi Project
Alov Project
TPAO Baku Offices
Kazakhstan (KTM)
Turkmenistan
Libya
Algeria
Georgia
Iraq
New ventures
TOTAL
250,925
184,233
65,495
59
51
-
38
1,049
78
-
85,328
-
-
13,652
44
350,027
4,172,360
3,068,805
617,935
109,049
324,387
17,302
26,197
8,685
288,048
4,727
172,454
25,549
633
14,964
4,314
4,683,049
* Doesn't include 41 million USD tax for ACG Project in 2010.
50
100
150
200
250
300
350
400
0
2007
2008
2009
2010
0
100
200
300
600
400
500
2007
2008
2009
2010
60 TPAO 2010 61TPAO 2010
62 TPAO 2010
Effective Rate of Ownership (%)Affiiates and Subsidiaries
Subsidiaries and Affiliated Companies and Their Shareholding Percentages
MethodKTM
TPIC
TPBTC
TPSCP
TPOC
AOIC (6,75% partner of ACG Project)
49
100
100
100
100
100
Equity Method
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Basis Of Presentation For The Financial Statements
1.1 Statutory Books & Financial StatementsThe consolidated financial statements of TPAO and the Group have been prepared in accordance with International Financial Reporting Standards (IFRS). The company, which is incorporated in Türkiye, maintains its books of accounts and prepares its statutory financial statements in accordance with the Turkish Commercial Code and Tax Legislation and the Uniform Chart of Accounts issued by the Ministry of Finance. The foreign subsidiaries and associates maintain their books of accounts in their local currency according to current commercial / fiscal legislation, project agreements, attachments and in compliance with the standards taken up as references. The financial statements have been prepared from statutory financial statements of the Company and its subsidiaries and associated with adjustments and reclassifications for the purpose of fair presentation in accordance with IFRS. Until the difference between the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) recognized by the European Union and the standards published by the International Accounting Standards Board (IASB) are announced by the Turkish Accounting Standards Board (TMSK), the financial statements are
1.4 Basis of ConsolidationConsolidated financial statements comprising TPAO (“Company”, “Parent Company”) and the partnership controlled by TPAO, have been prepared by considering the financial statements belonging to the year ending on 31, December 2007. The subsidiaries are defined as the companies controlled by the Parent Company holding more than 50% of the shares and voting rights directly or indirectly within the scope of capital and managerial relations or having the right of electing the majority of the management or having the majority of the management over the subsidiaries. The power of control implies that Parent Company plays the efficient role over the decisions of the company (Subsidiary) regarding the financial and operational politics and the power of managing aforementioned politics for the purpose of benefiting from the operations of the pre-mentioned company. The companies those do not have supervision capability but whose 20%-50% of the shares controlled by the parent company are defined as Partnership.
The subsidiaries and affiliated companies and their shareholding percentages at 31 December 2010 are on the left page.
The company’s shareholding percentage in KTM is shown in the financial statements by using equity method. The equity and net income attributable to minority shareholders’ interests are shown separately in the balance sheet and income statement, respectively. The losses applicable to the minority are charged against the minority interest, so as not to exceed the minority interest in the equity of subsidiary. As the investment in KTM is classified as an associated company, it is accounted for on equity basis. Participating interest acquired in KTM is accounted for by the equity method. The equity method is a method of accounting whereby an equity investment is initially recorded at cost and subsequently adjusted to reflect the investor’s share of the net profit or loss of the associate (investee). Distributions received from the investee reduce the carrying amount of the investment. The recoverable amount of an
prepared in line with IAS/IFRS under the Capital Markets Board (SPK) Communiqué Serial: XI, no: 29. The annexed financial statements and footnotes are presented according to the format required to be implemented by the SPK.
Functional currency used in company’s operations is Turkish Lira (TL), and functional currency used in reporting is United States Dollars (USD). Financial statements and notes in the appendix are presented in United States Dollars (USD).
1.2 Adjustment of Financial Statements In Hyperinflation PeriodsUnder the SPK decision dated March 17, 2005, and numbered 11/367, the inflation accounting practice is ended as of January 1, 2005, for the companies operating in Türkiye and preparing financial statements in line with the SPK Accounting Standards (including those which adapt the IAS/IFRS application). In line with this decision, the Standard on "Financial Reporting in Hyperinflationary Economies" (“IAS/TMS 29”) released by the IASB was not applied as of January 1, 2005.
1.3 Comparison of the Previous Period Financial StatementsComparison information was classified for the purposes of conformation with the presentation of the current period financial statements if necessary.
investment in an associate is assessed and if there is an indication that the carrying amount of the associate may be impaired permanently adjustment is made to state it at its recoverable amount. The book value of the investment in the capital of subsidiaries held by the parent company has been off-set against the equity of the invested companies and all inter-company purchase and sales and all accounts receivable and payable balances have been eliminated.
1.5 Changes in Accounting PoliciesIf the changes in accounting estimates are about only one term, they are applied in the current period when the change was made, if they are about future terms, they are applied both in the period the changes were made and in the future periods, prospectively. There have been no significant changes in the accounting estimates of the Group in the current period.
Summary of Significant Accounting Policies
2.1 RevenueThe group’s income consists of crude oil and natural gas sales and the revenues of various services. Around 78% of the income in question are generated by the crude oil sales. (2008: 77%) The income generated by sales are recognized in accounting when all the following conditions are fulfilled.
•The Group transferring all the significant risks and gains on property to the buyer,•The Group not having a proprietary and ongoing administrative participation and an efficient control over the sold goods,•The amount of income being measured reliably,•The flow of economic benefits about the transaction to the enterprise being probable, •The costs incurred or to be incurred by the transaction being measured reliably.
Although the IAS 18 Revenue standard does not cover the revenue generated by the mining activities, various recommendation texts and the practices that are generally accepted in the
63TPAO 2010
64 TPAO 2010 65TPAO 2010
literature show that IAS 18 is the basic guide with regards to the time when revenue arises in the mining industry. After the production of crude oil, the company transports the product to the buyer through pipelines and in this stage the significant risks on the product is not transferred to the buyer yet. When the product is delivered to the buyer, it is accepted that the revenue has arisen since all significant risks and gains on the property are transferred to the buyer, in line with the clauses of the standard, and the income is recorded.
The company income includes the invoiced values of the goods sales at the end of this process. The service incomes are recorded as revenues when they are realized.
Net sales are calculated by deducting sale returns and discounts from the invoiced sale amounts of goods and services delivered to the buyer. In case there is a significant financing expense in sales, the fair value is determined by discounting the future cash receipts by the implicit interest rate in the said financing expense. According to accrual principle, differences between fair values and the nominal values of the sales are recognized as interest income.
If the collection of the amounts recorded as revenues becomes doubtful, the allowances of doubtful trade receivables are taken to the financial statements as expense, and not through the correction of the amount of revenue.
The company has been calculated the depreciation by considering the useful life that has been denoted at the Law of Tax Procedures. The normal depreciation has been accepted as depreciation method and the depreciation expense has been calculated as prorata depreciation.
The depreciation methods and rates that have been used are shown on the left row.
At least in every end of the fiscal period, the depreciation rates have to be controlled. On the other hand, it has to be tested in case there is any impairment at the fixed assets. However, there has not been happened any operation and there has not been any group of assets.
2.3.2 Intangible Fixed AssetsIntangible Fixed Assets consist of special costs, rights and other intangible fixed assets. Mentioned intangible fixed assets are amortized in accordance with their predicted life-time. 2.4 GoodwillIn line with the Turkish Financial Reporting Standards (TFRS) “Business Combinations” as of January 1, 2005, the difference between the acquired identifiable assets, liabilities and contingent liabilities and the acquisition amounts are recognized as goodwill. The goodwill that emerges during the business combination is not subject to depreciation, instead, it is subjected to value depredation test once a year or when the conditions point to depredation more frequently.
The Group does not have a goodwill account under the TFRS 3 “Business Combinations.”
2.5 Impairment Of AssetsIn case the carrying values of assets exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount and the provision is reflected to the income statement as an expense.
2.2 InventoriesInventories are valued at the lower of cost and net realizable value. The cost of inventories include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The unit cost of the inventories is determined with weighted average cost method. Net realizable value is the value obtained when the total amount of estimated completion cost and estimated sale cost necessary to make the sale is deducted from the estimated sales price in the ordinary course of business.
IAS 2 Inventories Standard suggests the use of real party cost method in the determination of inventory costs, when possible, and the use of first-in-first-out (FIFO) or the Average method when the real cost cannot be determined. The cost is determined with the use of weighted moving average cost method for first good and material, work in progress, merchandise and other inventories.
2.3 Fixed Assets
2.3.1 Tangible Fixed Assets The tangible fixed assets purchased before January 1, 2005, were reflected with the deduction of the accrued depreciation and permanent value losses from the corrected cost values and the tangible fixed assets purchased after January 1, 2005, were reflected with the deduction of accrued depreciation and permanent value losses from the cost values.The fixed assets that have been expected to be used more than one year, reported in first at cost of value. At the following periods, they are appreciated with cost of value. The cost value of the tangible fixed asset consists of purchase price, import taxes and non-refundable purchase taxes, the expenses incurred to make the tangible fixed asset ready to be used and the interest expenses incurred during the investment stage of the tangible fixed asset in question of the credits used for the purchase of the tangible fixed asset.
On the other hand; the recoverable amount of assets is the greater of net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
No such case is detected at the balance sheet period.
2.6 Borrowing CostsThe financing costs arising due to financial debts are included in the cost amount of qualifying assets when associated with the acquisition or establishment of qualifying assets. Qualifying assets refers to assets that take a substantial period of time to get ready for its intended use or sale. Other borrowing costs are recorded in the income statement in the period they arise.
2.7 Financial InstrumentsFinancial instruments consist of following financial assets and liabilities;
Cash and Cash EquivalentsCash and cash equivalents comprise cash on hand, cash in banks and cash in transit.
Cash on hand comprise Turkish Liras and foreign currency balances Turkish Liras balances are carried at cost, foreign currency balances are carried at their TL equivalent values calculated using the buying exchange rates announced by Central Bank of the Republic of Türkiye at the balance sheet date. Buying rates are used for evaluating foreign currencies in assets and Selling rates are used for evaluating foreign currencies in liabilities.
Bank deposits comprise time and demand deposits and interests of these deposits. Turkish Liras balances are carried at cost, foreign currency balances are carried at their TL equivalent values calculated using the buying
Depreciation Rate
Land Improvements
Buildings
Machinery and Equipments (*)
Motor Vehicles
Furniture, Fixtures And Office Equipment
%5 - %15
%2
%10 - %20
%20
(*) Includes machinery and equipment used for production oil or natural gas.
%5 - %16
66 TPAO 2010 67TPAO 2010
exchange rates announced by Central Bank of the Republic of Türkiye at the balance sheet date.
Due to the fact that the liquid assets in foreign currency are exchanged to the Turkish Liras in effective rate in balance sheet date, the fair value of these assets are accepted to be equivalent to their registered value. Cash and cash equivalents in foreign currencies are translated to Turkish Liras using the exchange rates at the balance sheet date. Thus, fair values of these assets are accepted to be equal to their book values.
Bank Deposits, checks received and registered value of cash are assumed to be equal with their fair values as they are disposed of in short terms and free of the risk of impairment.
Fair value is the amount at any financial instruments, between two purchased and saled parts, that has been changed of hands as cleaned from collusion, primarily, stock market value of relevant asset, in case the lack of stock market value the purchase and sale value which is suitable for the definition is being accepted as fair value.
Trade Receivables Trade receivables are financial assets recognized by direct sale of goods and services to buyers. Discounted and doubtful receivable provision deducted values of trade receivables are assumed to be equivalent to their fair values.
Related PartiesAt attached financial statements, scope of consolidated companies (directly) and the companies which has been controlled by these consolidated companies (indirectly), affiliates and project partners have been accepted as related parties.
2.9 Taxes Calculated on the Basis of the Company’s Earnings
2.9.1 Corporate TaxIn Türkiye, the corporate tax applied to the legal tax basis, to be found with the addition of non-deductable expenses for the commercial gain of the corporations under the tax laws and the deduction of the exemptions under the tax laws, is 20%. Under the Turkish tax legislation, financial harms can be conveyed for five years to be deducted from the company's profit to arise in the future. However, financial harms cannot be deducted from the profits of previous years. In Türkiye, the practice of reaching an agreement with the tax authority for the tax to be paid is not applied. The corporate tax declarations are given in the fourth month following the month the accounting period is closed. The offices authorized for tax examination can examine the tax declarations and the underlying accounting records for five years subsequent to the accounting period and make re-assessments in line with their findings. The companies subject to consolidation are taxed under the clauses specified in the agreements which have binding force above the laws for the projects implemented through these companies.
2.9.2 Deferred TaxDeferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable (statutory) profit. Mainly, the temporary differences, the gains and losses in accordance with the decleration of Tax
Short and Long Term Bank Borrowings and Trade PayablesShort and long term bank borrowings are represented with values of principal and the accrued interest expenses as at balance sheet date, discounted by the effective interest rate.
Trade payables are financial liabilities recognized by direct purchase of goods and services from suppliers.
Financial InvestmentsFinancial Instruments driven to equity which do not have any registered value in active market and its fair value can not be measured certainly are reported as their cost of value.
2.8 Provisions, Contingent Liabilities and ObligationsThe Group administration, reserves the amount of the liability in question in the annexed consolidated financial statements, in cases where there is a current legal or tacit liability arising from the past events, the exit of the resources including economic benefit from the business is possible for the fulfillment of this liability and the amount of liability in question can be estimated reliably. Contingent liabilities are subjected to continuous evaluation to determine whether the exit of the resources including economic benefit from the business has become probable or not. Except the cases where the possibility of the exit of resources including economic benefit is remote, these cases are explained in the footnotes of the financial statements. When the entry of the economic benefit to the business becomes probable, an explanation is made in the financial statement footnotes about the contingent asset. In case the entry of the economic benefit to the business becomes almost certain, the asset in question and the income change associated is included in the consolidated financial statements at the date the change takes place.
Laws have been taken root from the accounting of the different financial statement periods. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.
The company calculates the tax assets and liabilities deferred, taking into account the effects of temporary differences arising from the different evaluations between the legal financial statements of the balance sheet times under the clauses of Capital Markets Board Communiqué XI-29. The temporary differences mentioned usually arise due to the accounting recognition of incomes and expenses in different reporting periods under the Communiqué and tax laws.
The tax assets and the liabilities relating to consolidated companies have been reported like during the consolidation.
Deferred tax liabilities are calculated for investments in subsidiaries and associates and for all the associated taxable temporary differences, except the cases when the Group can control the removal of temporary difference and the possibility of the removal of this difference is low in the near future. The deferred tax assets arising from the taxable temporary differences associated with such investments and shares are calculated on the conditions that benefiting from the differences in question is highly likely through making sufficient profit subject to tax in the near future and that the removal of differences is possible in the future.
68 TPAO 2010 69TPAO 2010
2.10 Exploration, Preparation and Development ExpensesThe expenses in oil exploration and production sector consist of four basic parts, which are:• Exploration Expenses• Acquisition Expenses• Development Expenses• Production Expenses.
1-Exploration ExpensesThe expenses made in the process from the acquisition of the exploration license to the commercial oil discovery are generally considered exploration expenses.
2-Acquisition ExpensesThe acquisition expenses are all expenses incurred to have the oil right.
3-Development ExpensesThe development expenses are the expenses made subsequent to the acquisition of the field and oil exploration stages.
4-Production ExpensesProduction expenses are expenses incurred in the oil production stage. International Financial Reporting Standards: 6 Standard for the Exploration for and Evaluation of Mineral Resources covers the accounting recording of only the exploration and evaluation expenses and does not include the expenses incurred before the acquisition of the exploration license, development expenses and the production expenses.
Exploration and development costs incurred in Türkiye are charged to income statement as required by the Turkish Petroleum Law, while exploration and development expenses can be recognized in income statement, since the company has been reporting in accordance with IFRS, related expenses are accounted according to successful effort method explained below. Drilling costs incurred on both ground and underground improvements (platforms, pipelines and similar items) as well as expenditure on
The petroleum exploration and development expenses capitalized in case of finding reserves are subject to depletion by redemption rate found by dividing the actual production to begining period total estimated reserve amount.
Estimation of Oil and Gas ReservesProved oil and gas reserves which are the key elements of the Group's operations are the estimated quantities of crude oil and natural gas which geological and engineering data demonstrate in reasonable certainty to be recoverable in the future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. The estimation of oil and gas reserves are based on the Company Managements assumptions and expectations.
2.12 Asset Retirement ObligationsThe fair value of well abandonment liability is recorded as a liability when incurred, typically at the time the assets are installed or placed in service. Amounts recorded for the related assets are increased by the amounts of these obligations. Over time the liabilities will be increased for the change in their present value and the initial capitalized costs will be depreciated over the useful lives of the related assets.
2.13 Employee Termination Benefits
Defined Contribution PlansAccording to existing social legislation applied in Türkiye, the employee deserves claim as severance of the employee except to quit job as a reason of resignation and right reasons and to charge 1 year at work. The Company is calculating the existing liability as appropriate. The liability is discounted to present value using the effective interest rate. All actuarial gains and losses arising from said calculations are recognized in the income statement.
machinery, equipment and other fixed assets related to the oil and gas production activities are capitalized and depreciated as required by the circumstances.
The amounts paid for the investments and interest in joint operation agreements are capitalized and are amortized on basis of the income following the discovery of petroleum, in the case where no petroleum is available the remaining balance of the investment and/or the interest in joint operation agreements are written off to expenses.
Drilling materials such as “casing” is put into accounts due to consequences of research activities. If proved reserves are found at the well, casing cost is capitalized and amortized but if the well is dry it is written off as expense.
2.11 Petroleum Accounting
Successful Effort MethodThe basic assumption in this method is the capitalization of pre-production expenses with the discovery of producible oil reserves and its reflection to the inventoriable cost through depreciation. In other words, in the Successful Effort Method, pre-production expenses are associated with the inventoriable cost if success is achieved in the exploration activity. The pre-production expenses incurred for unsuccessful exploration activities are accepted as period expenses and are reflected directly in the income statement. In the Full Cost Method, which is an alternative to this method, the pre-production exploration and evaluation expenses are capitalized and subjected to depreciation regardless of whether the result was successful or not. The Company recognizes the petroleum research and development costs in accordance with successful effort method. Development expenses are the expenses incurred in order to accelerate the production of petroleum or natural gas. In case these operations do not achieve the objective, the amounts should be capitalized.
Under the updated IAS 19 Employee Benefits Standard (“IAS 19”) the payments of the type in question are identified as defined retirement benefit plans. The termination benefit recognized in balance sheet liability was calculated according to the net current value of the amounts of liability expected to arise in the future as a result of the retirement of all employees and was reflected in the financial statements. All actuarial gains and losses calculated were reflected in the income statement.
70 TPAO 2010 71TPAO 2010
Defined Benefit Plans For defined contribution plans, the Company pays contributions to publicly administered Social Security Funds on a mandatory basis. These payments are decisive.
2.14 Cash Flow StatementThe cash flows of the period are reported through classification based on main, investment and financing activities in the cash flow statements. The cash flows arising from main activities show the cash flows arising from the Group’s crude oil, natural gas sales and technical service activities. The cash flows related with investment activities show the cash flows used and acquired by the Group in investment activities (fixed investments and financial investments). Cash flows related with financing activities show the resources used by the Group in financing activities and the
(i)Controls the Group, is controlled by the Group or under the joint control with the Group (including parents, subsidiaries and subsidiary companies in the same business field); (ii)Has a share that enables it to have a significant influence over the Group; or (iii)Has joint control over the Group;
(b) If the Party is an associate of the Group;
(c) If the Party is a joint venture in which the Group is a joint venturer;
(d) If the Party is member of the Group’s or its parents' key administrative personnel;
(e) If the Party is a close family member of any individual mentioned in (a) or (d);
(f) If the Party is an enterprise that is controlled, under joint control, or under significant influence or where any individual mentioned in (d) or (e) has a significant right to vote directly or indirectly; or(g) The Party should have benefit plans provided following the termination of work for the employees of the enterprise or an enterprise that is an associated party of the enterprise.
The transactions with related parties is the transfer of the resources, services or liabilities between the related parties, regardless of whether or not this is against any remuneration.
In accordance with the criterions above, trading and other transactions with the related parties that the company determines, are detailed on the related notes.
2.17 Earning Per ShareThe earning per share indicated in the income statement is found with the division of net profit with the weighted average number of the equity shares in the market during the reporting period.
2.18 Post Balance Sheet EventsPost balance sheet events cover all the events between the balance sheet date and the date the balance sheet was authorized to be published, even if they took place following the public disclosure of any announcements with regards to the profit or other selected financial information.In the case that events requiring a correction to be made occur subsequent to the balance sheet date, the Group makes the necessary corrections to the financial statements. When non-adjusting events occur after balance sheets date, the Group makes the necessary disclosures in the relevant period.
2.19 Contingent Assets And LiabilitiesA contingent asset/contingent liability is a possible asset/obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The Company doesn’t recognize contingent assets and liabilities.
repayments of these resources. Liquid assets are available cash, demand deposits and other short-term investments with high liquidity, which have 3 months or less than 3 months due date as of their purchase date, can be liquidated immediately and do not have the risk of significant value change.
2.15 The Effects of Changes In Foreign Exchange RatesIn the process of the reporting of consolidated financial statements of the company in U.S. Dollars (USD), since the official records of foreign associates are realized in U.S. Dollars (USD), there is no foreign exchange rate difference.
Only the official records and financial statements of the TPAO Headquarters and Regional Directorates and the TPPD among the companies under consolidation, which is the subsidiary of TPIC, are reported in Turkish Lira (TL). The foreign exchange rate differences that arise when the mentioned TL financial statements is converted to the U.S. Dollar (USD), which is the reporting currency, were classified as equity capital and transferred to the Group's conversion fund.
The conversion differences in question are recorded to the income statement in the period when the foreign activity is disposed of. In the conversion of the mentioned TL records to USD, the year-end exchange rate is used for balance sheet items and average exchange rate is used for revenue and expenditure items. The USD/TL exchange rates in related dates are as follows.
2.16 Related PartiesIf one of the criteria listed below is fulfilled, the party is considered related with the Group:(a) If the party in question either directly or indirectly, through one or more than one intermediaries:
2010 20102009 2009Assets
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Other Receivables
Inventories
Other Current Assets
Non-Current Assets
Other Receivables
Financial Investments
Investments Evaluated with Equity Method
Wells
Tangible Assets
Intangible Assets
Deferred Tax Assets
Other Non-Current Assets
Total Assets
Liabilities
Short-Term Liabilities
Financial Liabilities
Trade Payables
Other Liabilities
Tax Liability
Other Short-Term Liabilities
Long-Term Liabilities
Financial Liabilities
Other Liabilities
Debt Provisions
Provisions for Employee Termination Benefits
Other Long-Term Liabilities
Shareholder's Equity
Shareholders' Equity of Parent Company
Paid-in Capital
Foreign Exchange Differences
Profit Reserves
Retained Earnings/Loss
Net Income / Loss for the Period
Total Liabilities
TPAO and its Subsidiaries Consolidated Balance Sheets as of December 31, 2010 and December 31, 2009
TPAO and its Subsidiaries Consolidated Balance Sheets as of December 31, 2010 and December 31, 2009 (thousand USD*) (thousand USD*)
* The Central Bank Buying Exchange Rates for the end of 2009 and 2010 are 1,5057 TL and 1,5460 TL
72 TPAO 2010 73TPAO 2010
2,793,155
1,998,505
-
268,267
8,044
308,067
210,272
4,213,977
93,701
51
26,102
1,017,207
2,812,543
174,177
11,537
78,658
7,007,131
2,090,279
1,513,378
-
208,569
34,077
212,135
122,119
4,073,178
97,747
53
17,288
1,010,487
2,630,648
171,493
10,229
135,253
6,163,457
1,014,894
208,737
133,722
428,117
26,534
217,784
651,586
33,524
51
353,974
113,801
150,235
5,340,652
5,340,652
980,348
151,662
1,064,255
1,791,570
1,352,816
7,007,131
480,865
85,296
150,524
82,886
29,577
132,582
757,366
107,839
51
411,619
97,519
140,338
4,925,226
4,925,226
980,349
205,188
972,273
2,378,380
389,036
6,163,457
74 TPAO 2010 75TPAO 2010
2010 2009
Sales Income
Cost of Sales (-)
Gross Profit (Loss)
Marketing and Sales Expenses (-)
General Administrative Expenses (-)
Research and Development Expenses (-)
Other Operating Revenues (-)
Other Operating Expenses (-)
Operating Profit (Loss)
The Investment's Shares in Gains/Losses Appreciated with Equity Method
Non-operating Financial Revenues
Non-operating Financial Expenses (-)
Continued Operations Before Tax Profit (Loss)
Continued Operation of Tax Profit (Loss)
Tax losses for the period
Deferred tax gains (Losses)
Net Income (Loss)
Current Ratio (Working Capital Ratio) = 2.75
Acid - Test Ratio = 2.45
Liquidity Ratio (Liquid Assets Ratio) = 1.97
Financial Leverage = 0.24
The Ratio of Equity to Total Assets = 0.76
The Ratio of Equity Capital to Liabilities = 3.20
Gross Sales Revenue / Net Sales Revenue = 0.50
Net Profit / Total Assets Ratio = 0.19
TPAO and its Subsidiaries Consolidated Income Statement for the year ended December 31, 2010 and December 31, 2009
Financial Ratios Derived From Consolidated Financial Statements of TPAO for 2010
* The financial statements have been translated from TL to USD with the average rates for the end of 2009 and 2010 are 1.5090 TL and 1.5259 TL.
(thousand USD*)
2,850,823
1,424,624
1,426,198
123,291
257,022
166,395
657,664
86,073
1,451,081
2,026,284
954,172
1,072,112
124,210
248,266
194,892
191,559
92,961
603,341
320,707
1,516,090
163,274
177,269
13,994
1,352,816
211,923
485,749
96,713
104,889
8,176
389,036
1,545 -7,928
102,259348,172
Adıyaman District Management02040 Adıyaman / TÜRKİYEPhone: +90 416 227 28 11Fax: +90 416 227 28 07 - 18 Batman District Management72100 Batman / TÜRKİYEPhone: +90 488 213 27 10Fax: +90 488 213 41 49 - 213 39 14
Trakya District Management39750 Lüleburgaz Kırklareli / TÜRKİYEPhone: +90 288 417 38 90Fax: +90 288 417 22 03
Headquarters
TPAO's District Managements
TPAO's Subsidiary
TPAO's International Offices
Turkish Petroleum CorporationSöğütözü, 2180th Avenue No: 86,06100 Çankaya - Ankara / TÜRKİYEPhone: +90 312 207 20 00Fax: +90 312 286 90 00 - 286 90 01e-mail: [email protected]: www.tpao.gov.tr
Azerbaijan TPAO / TPIC / TPBTC Office340 Nizami Street, 370000 ISR Plaza, 4th FloorBaku / AZERBAIJANPhone: +99 412 498 95 26 - 493 14 98Fax: +99 412 498 14 35e-mail: [email protected]
TPOC Libya OfficeAl Fatah Tower 1, 9th Floor, No: 91 Tripoli / LIBYAPhone: +218 21 335 14 94 - 335 14 96 - 97Fax: +218 21 335 14 95e-mail: [email protected]
TPOC Iraq OfficeBaghdad Al – Wazereyah 301 Section 5th St. No:6 Baghdad / IRAQPhone: +90 312 207 20 00 / 18 58 - 18 59e-mail: [email protected]
KazakTurkMunai Ltd. Joint CompanyBusiness Center “Okan Inter-Continental”,Abay Avenue, 113, 473000, Astana / KAZAKHSTANPhone: +7 7172 39 10 25Fax: +7 7172 39 10 26e-mail: [email protected]
TPIC, Turkish Petroleum International CompanySöğütözü Avenue, No: 27, 06520 Ankara / TÜRKİYEPhone: +90 312 285 44 55 Fax: +90 312 285 38 09e-mail: [email protected]
CONTACT INFORMATION
www.tpao.gov.tr
