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TURKISH PETROLEUM CORPORATION2012 ANNUAL REPORT
tpao.gov.tr
TURK
ISH
PETR
OLE
UM C
ORP
ORA
TIO
N 2
012
ANN
UAL
REP
ORT
TURKISH PETROLEUM CORPORATION2012 ANNUAL REPORT
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Victory is not a purpose. Victory is just an instrument to get a greater purpose
than itself.
Mustafa Kemal Atatürk
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05S uccess is a journey, not a destination.
Ben Sweetland Every goal starts with dreams then belief and becomes reality. Today, we are moving
on our path, again with a new dream, a new purpose and the same excitement.
a journey with dreams...
59th
year of tpao
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tpao
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yıllık
rapo
ru06
08 about us
10 organization chart
12 message from the president
14 board of directors
16 general management
20 indicators
23 domestic exploration and production activities
33 international exploration and production activities
38 subsidiaries and associated company
40 technology and services
45 research center
49 occupational safety and environmental production
51 human resources
5468
finance
contact information
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• Exploration, Drilling, Production,• Natural Gas Storage,• Pipeline Projects,• Oil Distribution.
TPAO, one of the pioneer actors of the economy, was founded in 1954 with the responsibility of being involved in hydrocarbon exploration, drilling, production, refinery and marketing activities on behalf of the state. In its 59 years history, it has broken new ground in oil sector.
Turkish Petroleum that brought 17 major institutions like PETKİM, TÜPRAŞ, PETROL OFİSİ to our country, is still conducting domestic and international activities by involving in important projects and consortia.
who we are?
whatwe do?
wherewe 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 Turkey and its branch offices abroad. To ensure energy supply security of the country, TPAO conducts its investments and activities also in abroad especially in Caspian Region, North Africa and Middle East. In this context, we carry out our exploration and production activities actively in Kazakhstan, Azerbaijan, Libya, Iraq, Turkish Republic of Northern Cyprus (TRNC) and Afghanistan. We have been continuing to search and negotiate for business opportunities in other hydrocarbon rich regions such as Caspian Region, Russian Federation, Middle East, Africa and South America.
about us
Building Blocks of Our Values
MeritIs our principle of respect to labour,
Effectiveness and ProductivityAre our main purposes of investing to right business at right time and success criteria of economic production and high production rate per employee,
Openness to Change and InnovativenessAre our being user of developing technology to build tomorrow by learning from past and a way of using new production techniques effectively and creating our vision according to world balance,
Environmental AwarenessIs our eagerness of bequeathing a clean environment to posterity,
Share of Responsibility, Knowledge, Experience and AuthorityAre our corporate culture in which knowledge gains meaning through experience and increases by sharing,
Credibility and HonestyAre our philosophies of developing the cooperation with our domestic and foreign partners by reflecting the sense of trust to others.
our values andstrategies
Strategies
To Develop• To become a pioneer actor in Eurasia and
extend international portfolio,• To discover our country’s hydrocarbon
potential,• To step up with activities in Aegean and
Mediterranean following Black Sea,• To share the risk by constituting consortia
with major oil companies,
Productivity• To monitor our operational productivity and
to develop it,• Applying the technological innovations
gained through consortia,
Integration• To gravitate towards oil exploration with
unconventional methods,• To take part actively in Natural Gas Storage
and Pipeline projects,
Employee Development• To transform our man power, our most
valuable capital, to high performance individuals so as to keep up with increasing competition, developing technology and to increase our efficiency.
As Turkish Petroleum, we are eager to bequeath a better Turkey to posterity for realizing our energy independency with qualified man power, rooted corporate culture, self-assurance.
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Murat ALTIPARMAK Ahmet
ADAN
IR
M. Sait KİRAZOĞLU
VICE PRESIDENT
VICE PRESIDENT
VICE PRE
SIDE
NT
EXPLORATION
PRODUCT
ION
Fikri NAYIR
THRACE
DIST
RIC
T
DRILLING
STRATEGY DEVELOPM. AND PLAN.
Ömer ŞAHİNTÜRK
OCCUPATIONAL SAFETY AND
ENVIRONM
ENT PROTECTION
BATMAN DISTRICT
ADIYAM
AN D
ISTR
ICT
RESEARCH CENTER
SECR
ETAR
IAT TO
THE PRESIDENT
WELL C
OMPL
ETIO
N SE
RVIC
ES
TUR
KISH PETRO
LEUM OVERSEAS Co.
BUSINESS DEVELOPMENT
Erdal COŞKUN
Ali T
İREK
FINANCE
Murat H
ACIH
ALİL
OĞ
LU
Recai GÜNGÖR
Mem
et Ali KAYA
Y
ahya
PEKTAŞ
HUM
AN RES
OURCES SUPPORT SERVICES
INFORMATION TECHNOLOGIES
İrfan MEM
İŞOĞLU
Gökhan AKIN
Davu
t İYRAS
LEG
AL A
DVISORY
Süleyman ÇALIK
En
ver Ç
ETİN
KAYA
MACHINERY SUPPLY& CONSTRUCTION
(TPOC)
M. Fehm
i KARCI
Ahmet
ASLAN
AUDI
TING COMMITTEE
Serdal AZARSIZ
VICE PRESIDENT
Ferhat TAŞ
Sava
ş BÜT
ÜN
ADV
ISORS
TO THE PRESIDENT
CHAIRMAN AND THE PRESIDENT (A)
Besim ŞİŞMAN
Bureau of the Board of Directors
Coming together is a beginning, keeping together is progress,
working together is a success.
Henry Ford
There is no wealth like wisdom, no destitution like ignorance,
no inheritance like refinement and no support like consultation.
Hz. Ali (Ali İbn Abu Talib)
Murat ALTIPARMAK (Member)
Besim ŞİŞMAN (A) BOARD OF DIRECTORS
organization chart
M. Talip BEKTAŞ
Selami İNCEDALCI (Member)
Cumali KINACI (Member)
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Our Corporation strived to fulfill its duty in 2012 through the steps it has taken in securing energy supplies, its 1 billion dollars budget for investments, its internationally recognized projects and its experience of 59 years.
Our Corporation has been working tirelessly in an effort for Turkey’s energy supply security. In this respect, we continue to perform in an effort to ensure that Turkey’s oil and natural gas resources, which are our national wealth, are utilized in a way that presents high added value to the national economy.
One of the focal point areas we worked this year was the Eastern Mediterranean region. We completed the drilling of the Türkyurdu-1 well in TRNC onshore in 2012. Thus, we have acquired significant geological data of the area. We will continue our exploration activities in upcoming periods both through our own capital and through partnerships with foreign corporations.
Along with contributing to our national wealth, we also continue our efforts to minimize the energy bill our country pays abroad. Turkey is ranked 26th in oil consumption and 20th in natural gas consumption in the world. Turkey has also been the second growing economy in the demand rise of electricity and natural gas since 2002. We are proud of Turkey’s rising economy, besides we also know that provision of the energy needs of our country is our primary task.
Given this sense of duty, we enhance our investments every year to meet our economy’s demands. In this regard, we take precautionary measures to ensure the diversity of oil and natural gas supplies and decrease the risks of importing from a few countries.
Another significant task our Corporation has been pursuing is the exploration of hydro-carbon with non-conventional methods. Given that some marginal price volatility might take place in the market of natural gas in the long run, we are aware of the significance of the shale gas potential our country has.
Evaluating Turkey’s shale gas potential and thus decreasing our energy dependency will be an important step for our supply security and also ease the energy bill which is a big burden for Turkey’s economy. In this sense, we have launched various tasks both on our own and via partnerships for hydro-carbon production with non-conventional methods in Thrace and South Eastern Anatolia.
Meanwhile, we have yielded the Barbaros Hayreddin Paşa Vessel equipped with the latest technology to the oil sector of our country to uncover the oil and natural gas potential of our seas. We intend to undertake efficient and functional actions in our seas by the help of the seismic vessel we have purchased.
TPAO brings in added value to Turkey in addition to being the most profitable public firm. These gains turn out to be new investment projects for Turkey. In this sense, TPAO demonstrates its willingness to increase its assets internationally through projects in Iraq, Azerbaijan, Kazakhstan, Libya and now in Afghanistan.
We, as TPAO, have set it as our objective for the year 2023 to be one of the most leading worldwide oil companies and become Turkey’s, which will inevitably be a global power, one generic trademark.
According to the estimates of the World Energy Agency, fossil fuels will be primary energy resources up until 2050s. We will continue our exploration activities at home and abroad in the light of these estimates.
In 2012, TPAO hosted the 7th meeting of the CEOs of NOCs which aims to bring together the national oil companies meeting 70 percent of world’s energy needs and improve bilateral relations. Having shared crucial information at the Summit with regard to Turkey’s potential in onshore and offshore, we took important steps in an effort to co-invest at home and abroad with other national oil companies.
In a nutshell, during the year 2012, we intensified our exploration activities at home and abroad to minimize the risks of our dependency on foreign hydrocarbon resources; we increased our strategic magnitude in the region thanks to Turkey’s geographic location; and hence we came much closer to our goals.
We, as the TPAO family, are determined to work diligently and be an ornament to our country. In this sense, we are resolute to undertake our actions in a wise and sensible manner, in awareness of our capacity and having set our objectives for the year 2023 clearly and ready to take required risks in this route.
message from the president
Besim ŞİŞMANChairman and the President (A)
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board of directors
Besim ŞİŞMANChairman and the President (A.)
Murat ALTIPARMAKVice President and Member of the Board
3 4
1
He graduated from Ankara University Geology Engineering in 1981. He studied his master’s degree in the same branch in 1993.
Since January 23rd, 2013, He has been a Member of the Board of TPAO and the President of Petroleum Affairs General Directorate of MENR.
He graduated from Istanbul Technical University Petroleum Engineering.
Since 2009, He had been a Member of the Board. After February 28th, 2013 He has been Acting Chairman and President.
2
Cumali KINACIMember of the Board
Selami İNCEDALCIMember of the Board
He graduated from Istanbul Technical University Civil Engineering. He studied master’s degree and doctorate of Environmental Engineering in Istanbul Technical University Institute of Science.
Since 2003, He has been a Member of the Board of TPAO and also the President of Water Management in Ministry of Forestry and Water Affairs.
He graduated from Istanbul Technical University Petroleum Engineering.
Since 2003, He has been the Vice President and since 2010 He has been a Member of the Board.
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Chairman and the President (A) Besim ŞİŞMAN
He graduated from Istanbul Technical University Petroleum Engineering.
Since 2009, He had been a Member of the Board. After February 28th, 2013 He has been Acting Chairman and President.
Murat ALTIPARMAK
He graduated from Istanbul Technical University Petroleum Engineering.
Since 2003, He has been the Vice President and since 2010 He has been a Member of the board.
Member of the Board and the Vice President
The Vice PresidentAhmet ADANIR
He graduated from Istanbul Technical University Faculty of Mines.
Since 2004, He has been the Vice President of TPAO.
The Vice PresidentMehmet Sait KİRAZOĞLU
He graduated from Ankara University Faculty of Political Science. He studied master’s degree of Public Administration in Syracuse University (Maxwell School) in USA.
Since 2011, He has been the Vice President of TPAO.
Serdal AZARSIZ
He graduated from Middle East Technical University Engineering Faculty Petroleum Engineering.
Since July 29th, 2013, He has been the Vice President of TPAO.
The Vice President
general management
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1918 How good it is to migrate between every day,how pleasant it is to settle a place every day,
how nice it is to flow without blurring, freezing,everything about yesterday has gone with yesterday. Today, it is needed to say new things.
Mawlana (Rumi)
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domestic investments
2009 2010 2011 2012336 389 579 502
international investments
million USD
2009 2010 2011 2012370350 487282
3,065,811
719,797
2,141,808
5,223,066
5,583,775
731,998
1,049,101
7.34
3.91
0.12
3,487,169
1,093,483
2,810,274
5,696,884
6,412,133
904,120
1,190,905
3.11
2.01
0.25
20112012
sales revenues
net profit
total current assets
total fixed assets
shareholder’s equity
short-term foreign liabilities
long-term foreign liabilities
current ratio (%)
cash ratio (%)
financial leverage ratio (%)
indicators
12012 investment
billion USD
geological activities
seismic activities
drilling activities
production activities
2B
3B
(km²)
onshore (km)
offshore (km)
onshore (km²)
offshore (km²)
onshore (thousand m)
offshore (thousand m)
10,220
585
-
835
539
172.6
3.6
13.6
10.9
9,514
663
12,300
1,064
1,691
186
13
14.0
10.3
domestic (million barrel oe)
international (million barrel oe)
20112012
thousand USD
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Turkish Petroleum has been producing human and environment-friendly projects since 1954 at home and abroad with its robust staff. Its main purpose is the energy independence of our country. By being active in many fields in the sector, from oil and natural gas exploration to production, from storage to transportation and renewable energy sources, we realize many investments crucial for the energy supply security of our country. We know that, so long as we produce, our country develops.
Our domestic investments approximately reached to 500 million USD in 2012, while it was 50 million USD in the early 2000s. In the last decade, we have performed significant activities to reveal new oil sources of our country.
As Turkish Petroleum, in order to conduct our activities with the principle of preventing and/or minimizing the negative environmental effects, protecting the human and environment health, we conduct teamwork in an innovative, functional and scientific manner in parallel to our main purpose and targets during our exploration, drilling and production activities,
Our aim is to add a meaning to our economic effort and investments by protecting the ecosystem which is the basis of human life.
In accordance with our vision and mission for meeting Turkey’s continuously increasing oil and natural gas demand through domestic and international sources, we have made a boom in our domestic investments by setting our new exploration strategy in the recent years by extending our activities in unexplored basins of Turkey, especially Black Sea and Mediterranean offshore.
From 2003 to 2012, by conducting 85,000 km of 2D and 16,000 km² of 3D offshore seismic surveys, we have attained substantial information about the hydrocarbon potential of our seas. The first economical natural gas discovery made the region limelight of many oil companies.
A Joint Operating Agreement was signed between Turkish Petroleum and Shell covering 3 exploration area licenses of Antalya offshore.
Our activities towards oil and natural gas production via unconventional methods like shale gas (a first in our country) continue with Shell.
We continue our farm-out activities covering Mersin and İskenderun Bays licenses following Antalya Bay.
We are excited and aware of that, the successful results that may be obtained from the drillings in our offshore areas will carry both Turkish Petroleum and Turkey to “2023 targets”.
With the same effort, excitement and expectation, we attached priority to realize exploration, drilling and production activities on onshore fields of our country. Our offshore activities in our seas continue at its top speed.
We bent on continuing our drilling activities without any cease both at home and abroad. In 2012, we have performed 176,222 m. drilling in 107 wells.
With these activities, we discovered 44 oil and 7 natural gas wells.
As Turkish Petroleum, we signed many joint exploration and production agreements by getting into partnership with international oil companies for our oil and natural gas exploration activities.
domestic exploration and production activities
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In this context,
• Within the framework of TPAO-NVT Perenco joint venture agree-ment covering Southeastern Anatolia Region; drilling activities were initiated on G. Kırtepe-12 appraisal well and Miyadin-2 ex-ploration well. Kedil-1 explora-tion well, drilled under Perenco operatorship, was resulted with oil discovery.
• Within the framework of Cendere Field Development Project under TPAO-Tiway Oil partnership, the drillings in 2012 were followed. Cendere-23 well was drilled, and in the TCM and OCM meetings, it is decided that Cendere-24, 25 production wells and Cendere-26 appraisal well will be drilled in 2013.
• Within the framework of Thrace Basin Joint Operating Agreement between TPAO-Amity Oil, natural gas and condensate production continue. Exploration activities in these licenses are ongoing. Pelit-4 and Kumdere-2 wells were completed as gas well.
• Within the framework of Western Black Sea Exploration and Development Project under TPAO-Petrol Ofisi E&P-Tiway Oil-Foinavon partnership, we continued natural gas production in Ayazlı and Akkaya Fields and additional perforated studies continue in the production wells of Akçakoca platform.
• Within the framework of Middle Black Sea Project under TPAO-Petrobras-Exxonmobil partner-ship, parties stated that they would like to withdraw from the agreement, necessary studies of withdrawal phase carried out.
• Within the framework of Middle and Western Black Sea Project under TPAO-Exxonmobil part-nership, ExxonMobil demanded to withdraw from the current agreement, and necessary stud-ies of withdrawal phase carried out.
• Within the framework of joint project between TPAO-Chevron Karadeniz B.V. the drilling of Yassıhöyük-1 well was complet-ed, it is decided by the parties to terminate the contract.
• Within the context of Farm-in and “Joint Operating Agreement” be-tween TPAO and Shell, local geo-logical, geophysical and environ-mental evaluation studies were held. Some other drilling studies under Shell’s operatorship con-tinued.
• Within the context of Farm-in and “Joint Operating Agreement” be-tween TPAO and Shell (Mediter-ranean), in order to prepare a substructure to the project, field and seismic interpretation stud-ies went on.
• TPAO-Shell (Black Sea) studied over “Joint Operating Agree-ment” contract.
Crude Oil and Natural Gas Production
In 2012, TPAO produced 11.6 million barrels of crude oil from its fields, which constituted 73% of the total crude oil production of Turkey. 72% of our total oil production is from Batman Region, 27% is from Adıyaman Region and 1% is from Thrace Region.
The total number of production wells reached to 1,293 by the end of 2012 with the addition of 89 new and 13 re-completed wells and abandonment of 9 wells.
Serious amount of water was produced from our oil fields as well as oil. In 2012, 124 million barrels of produced water was injected into safe zones in different fields by 68 waste water injection wells.
We have continued our domestic re-serve development and production activities in 2012. Production prob-lems in heavy reservoir require spe-cial technical applications. To pre-vent the decline in production and to evaluate the current production potential, several reservoir studies were performed.
In 2012, our total natural gas production was 340 million sm³. 96% of this gas production is from Thrace Region, 3% is from Batman Region and 1% is from Adıyaman Region. The oil equivalent of the gas output is 2 million barrels.
In the context of Western Black Sea Joint Exploration and Development Project under TPAO (operator), Pet-rol Ofisi Arama ve Üretim Sanayi A.Ş.,Tiway Turkey Ltd. and Foinav-on Energy Inc. Partnership, natural gas production is going on from 3 sea production platforms.
Since April 2007 when the produc-tion started from sea platforms, ap-proximately 860 million m³ (TPAO share 439 million m³) natural gas has been produced and the average daily production is 300,000 m³.
Thus, TPAO’s cumulative hydro-carbon production from its fields reached to 13.6 million barrels in 2012.
Production Enhancement Projects
In the context of the Batı Raman Field Enhanced Oil Recovery Project that has been conducted since 1986, recovered cumulative oil is 108.8 million barrels, 72.8 million barrels of this production is the additional oil produced by means of the project by the end of 2012. In addition to this, 12 new drillings were realized in this field.
25.1 million barrels of additional oil was produced by means of this project by the end of 2012 and approximately 100,000 barrels of additional oil were produced in 2012.
Within the scope of Garzan Water Injection Project, 29 million barrels of oil in Garzan-B Field and 13.3 million barrels in Garzan-C Field were produced by the end of 2012.
By the end of 2012, cumulative gas injection reached to 169 million m³ and cumulative water injection reached to 831,000 barrels in Batı Kozluca Field of Batı Kozluca Field Water Alternating Gas Injection (WAG) Project.
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A first in Turkey;Natural Gas Storage Facilities
In terms of energy planning of countries, having a natural gas storage facility is crucial for energy strategy in order to balance the supply-demand equilibrium in case of a possible supply limitation caused by pipeline maintenance or other reasons.
By taking the necessity of a natural gas storage facility into consideration for the wealth and development of our country, Turkish Petroleum contributed the first and the only natural gas storage facility “Kuzey Marmara and Değirmenköy Underground Natural Gas Storage Facilities” to the economy. It is a first for Turkey and additional facility productions are now brought to Turkey’s agenda in order to increase the supply security.
Kuzey Marmara and Değirmenköy Underground Natural Gas Storage Facilities were commissioned in 2007. It had 1.6 billion sm³ capacity and this was increased to 2.66 billion sm³ in 2010.
The project was planned in 3 phases. The investments planned within the first phase were completed and pipeline was commissioned.
With the completion of Değirmenköy and Surroundings Natural Gas Storage Project (Phase II) and Kuzey Marmara Natural Gas Project (Phase III), it is planned that, total capacity will reach to 4.29 billion m³, daily withdrawal capacity will reach to 75 million m³ and injection capacity will reach to 40 million sm³/day.
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district managementsOur District Managements, while conducting their activities, have a great role in the development of the social and economical life of the regions. Our Corporation is structured as Batman, Thrace and Adıyaman District Managements.
Batman District Management
In 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 Turkey 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.
To protect the soil and prevent 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 has gained a great dynamism in the economical and social areas with the discovery of oil and the establishment of refinery. 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. Furthermore, in the context of social responsibility, TPAO Kindergarten, from which nearly 200 students benefit, was established in 2011 in Batman District Management. Atatürk Elementary School with 40 classrooms was put into service in 2012 in the same complex.
Thrace District Management
TPAO 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 the 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, a first in our country, was established in 2007 and the reproduction processes are being maintained successfully in the 6th storage period. Taking the importance of gas storage units in gas supply security and energy independence of our country into consideration, studies to increase its storage capacity to approximately 4.29 billion sm³, its re-production capacity to 75 million sm³/day and its injection capacity to 40 million sm³/day, were initiated.
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 Management
In 1954, after the adoption of the Petroleum Law No. 6326 foreign companies came to Turkey for oil exploration and in 1958, the first petroleum exploration of Adıyaman Region was made by California Asiatic Oil and Texaco Overseas Petroleum at Kahta-1 well in Adıyaman District.
TPAO has realized the first oil discovery in 1971 after finding Adıyaman Field. By maintaining exploration activities, G. Adıyaman, K. Adıyaman, and Bölükyayla (1977), Çemberlitaş (1982), Çukurtaş (1985), B. Fırat, Akpınar (1986), Karakuş (1988), and Güzelçay, D. Yananköy, D. Şambayat (2011) fields were discovered.
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Under the leadership of Artist Hikmet Çetinkaya, the brush strokes of the CEOs’ attended to “National Oil Company Forum”.
ISTANBUL ÇIRAĞAN 20127 th NOC FORUM
TPAO hosted the International 7th National Oil Companies Forum (NOC) in May 2012 in İstanbul.
National Oil Companies CEO Forum (NOC) was established to create a platform that will enable to debate the common issues in oil and natural gas sector, to share the experiences, to evaluate the business development opportunities in the portfolios of the companies correlatively and to get into possible partnerships by establishing an open dialogue environment within members.
More than 100 representatives including Chairmen and Members of the Boards, Presidents and Vice Presidents of 23 oil companies from 21 countries have attended to this international organization which was inaugurated by Dear Prime Minister, Recep Tayyip Erdoğan and the Dear Minister of Energy and Natural Resources, Taner YILDIZ.
Participant Countries and Companies
Brazil (PETROBRAS), Algeria (SONATRACH), China (CNOOC, CNPC, SINOPEC), Indonesia (PERTAMİNA), India (ONGC), Iran (NIOC), Jamaica (PETROJAM), Qatar(QP), Colombia (ECOPETROL SA), Libya (NOC), Malaysia (PETRONAS), Mexico (PEMEX), Nigeria (NNPC), Norway (STATOIL), Pakistan (PPL), Saudi Arabia (SAUDI ARAMCO), Chili (ENAP), Thailand (PTT), Turkey (TPAO), Turkmenistan (TURKMENNEBIT), Uruguay (ANCAP).
NATIONAL OILCOMPANY FORUM
7th NATIONAL OILCOMPANY FORUM
ISTANBUL 25-27 May 2012
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international exploration and production activities
As Turkish Petroleum, in order to meet the increasing energy demand of our country, we continue our activities not only at home but also abroad, in hydrocarbon rich countries like Kazakhstan, Azerbaijan, Libya, Iraq, TRNC and Afghanistan. In this context, we also maintain our business development activities in Caspian Region, Russian Federation, Middle East, Africa and South America. As a national oil company, we believe that these activities are great steps for our country to maintain its energy supply security.
In the context of territory and country priorities resulted by the global evaluation studies we have conducted in recent years, as Turkish Petroleum, we not only focus on the countries in our nearby geography but also attach importance to increase our reserves.
To achieve our strategic targets, it is necessary for us to add new reserves and turn them into production immediately. For this reason, international activities have become gradually more important. Being aware of the strategic importance of energy, for ensuring Turkey’s security of supply, we have set up the roadmaps and action plans for achieving our objectives in the years ahead.
We have become an important actor in the region with the inter-national exploration, production and development projects since 1990’s. Within the context of these activities, most of our internation-al production is generated from Azeri-Chirag-Guneshli Project in Azerbaijan.
BTC Main Export Crude Oil Pipeline started its operations in 2006. So, the production in Azerbaijan Projects is expected to increase and to reach its highest level in the following years. After the completion of SCP Gas Pipeline in 2006 and the proceeding operations, our first international natural gas production as a shareholder of Shah Deniz Project started in March 2007.
In addition to Azerbaijan projects, our production from Kazakhstan fields continues.
Kazakhstan
As Turkish Petroleum we con-duct our activities in Kazakhstan through a joint venture company, KazakhTurkMunai (KTM) Ltd. in which we hold 49% while KazMu-naiGas holds 51% of the shares. KTM Ltd. has one concession li-cense in Aktau Region in Western Kazakhstan and two in Aktubinsk Region of the Western Kazakh-stan. We proceed the exploration and production activities in 7 fields in these three licenses.
In 2012, average production of KTM Ltd. was 1,693 barrels/day in Aktau Region and 3,044 barrels/day in Aktubinsk Region with a to-tal number of 4,737 barrels/day.
In the same year, the annual crude oil production of our Corporation is 920 thousand barrels while the cumulative number of crude oil production is 17.62 million barrels.
Caspian Region
It is estimated that, Caspian Re-gion holds 4% of the world oil re-serves and 6% of the gas reserves. Because of the cultural and his-torical ties, Caspian Region has a special importance and value for Turkey.
As a result of our country’s being a potential market, having the signif-icant role in the stability of Cauca-
sia and Caspian Region, being the transit country of energy resourc-es’ transportation to western mar-kets and with its energy hub status, Turkey’s strategic and geopolitical power in the area will increase.
Azerbaijan
We are 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, we have a share of 6.53% in 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) Project
“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 in 1994.
Azeri-Chirag-Guneshli structure is located in the south of Caspian Sea and about 100 km east of Baku. The license area of Azeri-Chirag-Guneshli is almost 432 km² with water depth varying between 100 and 300 m.
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The oil reserves of the ACG is estimated to be 5.56 billion barrels and around 2.15 billion barrels of crude oil has been produced from the area by the end of 2012. 2012 production of the project is 243 million barrels. Our share from the area was 5.67 million barrels in 2012 while the number is 88.98 million barrels in total from the beginning of the project.
ACG Project has been developed in phases. The production has started from Chirag Field (the early oil project) in November 1997.
Chirag Oil Project (COP) which aims to produce oil from undepleted area between the existing platforms in Chirag and Deep Water Guneshli is on construction phase.
Shah Deniz Project
The project was signed in 1997 and after the completion of the Minimum Obligatory Work Program of the Exploration and the Extended Exploration Periods in 2001, commerciality of natural gas and condensate was declared.
The 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 area coverage of approximately 860 km² with water depth varying between 150 and 600 m.
By the end of 2012, the cumulative produced natural gas is 38.2 billion m³ (TPAO share is 2.2 billion m³) and produced condensate is 79.9 million barrels (TPAO share is 4.7 million barrels). For 2012, the
amount of them was 7.8 billion m³ natural gas (TPAO share is 563 million m³) and 16 million barrels condensate (TPAO share is 1.1 million barrels), respectively.
According to the Sales and Pur-chasing Agreements (SPA), within the scope of Phase-1 in the project which had 625 billion m³ natural gas and 750 million barrel conden-sate reserves, the produced gas has been exported to Turkey, Azer-baijan and Georgia.
The production has started on December 2006 while it gained continuity in April 2007. The ex-pected annual plateau production in Phase-1 is specified as 8.6 bil-lion m³ and 6.6 m³ of this amount is segregated to Turkey for 15-years period.
For Phase-2, it is estimated that construction decision will be taken in 2013 and first gas delivery will be realized in late 2018.
Alov Project
Turkish Petroleum Overseas Com-pany (TPOC), a wholly owned sub-sidiary of TPAO, joined the Project after signing Exploration, Devel-opment and Production Sharing Agreement, by an “Agreement on Participating Interest to be Vested” on July 29th, 1998. As of Decem-ber 21st, 2011 TPOC was as-signed as the operator of the Alov Exploration Project.
Alov Exploration Project covers three different prospective struc-tures named Araz-Alov-Sharg in the Middle of the Southern Caspi-an Sea. The license area is located 500 km south-east of Baku in water
depths varying from 400 m to 1000 m. In this project which has three-year exploration period, 1,400 km² 3D seismic surveys completed. The first exploration well drilling is waiting for the legal status deter-mination of Caspian Sea.
Pipeline Projects of TPAO Contributing to the Energy Corridor
Turkey resides at the intersection of Middle East and Caspian Regions which have 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.
In case of the determination of the Black Sea hydrocarbon potential, the natural gas and oil of Black Sea will be transported through our country to the markets in safe way on time.
In this regard, our Corporate is taking its own part to meet the natural gas and oil demand of our country and we also continue our activities of increasing our efficiency and control through the east-west energy corridor.
Baku-Tbilisi-Ceyhan Main Export Crude Oil Pipeline (BTC) Project
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 Georgia and reaching to Ceyhan in the Mediterranean
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Sea, was constructed and has been operating since June 3rd, 2006. By the end of 2012, 1,588 million barrels of crude oil carried by 2,061 vessels.
Currently, transportation of a large portion of ACG oil, all of Shah Deniz condensate and some Kazakhstan, Tengiz and Turkmenistan oil is proceeding and 243.8 million barrels of oil was loaded to 312 tankers from Ceyhan Haydar Aliyev Terminal in 2012.
South Caucasus Natural Gas Pipeline (SCP) Project
Within 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 line with the production activities of Shah Deniz, continuous gas transportation was started on March 7th, 2007.
The pipeline has a transportation capacity of 9 billion m³ of natural gas to Turkish border with one com-pressor station in Sangachal Termi-nal in accordance with the terms of AGSC-BOTAŞ Sales and Purchasing Agreement (SPA). However, it is pos-sible to expand this capacity up to
24 billion m³ annually by adding new compressor stations and/or looping.
In 2012, totally 7.67 billion m³ natural gas was transported and 3.23 bil-lion m³ of this amount was sold to BOTAŞ. The main target of the pro-ject is to transport the gas produced from Caspian Region to Europe via Turkey in the future.
East Mediterranean Project
Following the agreement with Turkish Republic of North Cyprus, our exploration activities in 1 onshore and 7 offshore licenses surrounding the north and east side of the island were commenced. Thus, TPAO becomes the pioneer actor in East Mediterranean with its licenses. Drilling operations in Türkyurdu-1 well, which is our first well in TRNC, was completed.
North Africa and Middle East Region
Libya
TPAO via TPOC, a fully owned af-filiate, has been conducting explora-tion activities since 2000.
The other planned activities could not be performed in 2012 due to the compelling reasons in Libya. It is planned to conduct 2D and
3D seismic surveys, to drill new appraisal and exploration wells after overcoming these compelling reasons in 2013.
Iraq
Since 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 and its partners have offered bids for 3 fields in the Iraq’s third licensing round and in 2010 have been awarded for 20 year term operating rights for Siba and Mansuriya Gas Field.
Badra Oil Field Development Project
In 2009, within the scope of the second round, the consortium including TPAO was awarded for a contract to develop Badra Oil Field. KOGAS (South Korea) and PETRONAS (Malaysia) take part in the project as partners while GAZPROM NEFT has the role of operating of the project. TPAO holds 10% of the shares in the consortium.
The effective date of the signed agreement was February 18th, 2010. Environmental impact assessment studies, demining and seismic data acquisition completed. By December 2012, the drilling of 2 appraisal wells and one production well goes on.
Missan Oil Field Development Project
Missan 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-China (Operator, 63.75%), TPAO (11.25%) and IDC-Iraq (25%).
The drilling and workover activities of 15 wells were completed. Workover operations were held in 59 wells. Seismic data acquisitions started, process and interpretation studies of these data continue.
Siba Gas Field Development Project
The consortium, in which the operator, Kuwait Energy Company (KEC), holds 60% and TPAO holds 40% of shares, won the bid for Iraq Siba Gas Development-Production Service Agreement on October 2011. The effective date of the Agreement is July 1st, 2011. Project duration is 20+5 years following the effective date. According to the contract, it is planned to produce 100 million scf/day (during 9 years).
In 2012, workover studies, surface facility and engineering studies initiated in Siba-1 well. 3D seismic data acquisition, processing and interpretation, 1 appraisal well and 2 development wells’ drilling, rehabilitation in the current wells and workover operations are on schedule.
Mansuriya Gas Field Development Project
The consortium including TPOC as the operator with 50% share, KEC and KOGAS as partners with respectively 30% and 20% share won the Mansuriya Gas Field on October 2010 in the third round. The effective date of the contract which was signed between the parties on the 5th of June 2011 was declared as the 18th of July 2011.
The first draft of the Preliminary Development Plan (PDP) for Mansuriya Field was submitted to Iraqi authorities on January 18th, 2012. Seismic studies, rehabilitation of existing wells, drilling of two appraisal wells and engineering of 350 million scf/day capacity sub-surface facilities and related tendering procedures continue.
Other Activities
The sales points of the TPAO share of the international projects aforementioned are Ceyhan/Turkey and Supsa/Georgia terminals. In accordance with General Terms and Conditions of TPAO (GTCs), our sales realized via FOB (Free-On-Board).
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subsidiaries and associated companyTurkish 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. TPOC is an operator with 51% share in NC-189 (Sirte Basin) and with 100% share in NCBlock-147/3-4 (Murzuq Basin) in Libya. TPOC Ltd. has 4 offices in Baghdad-Iraq, Tripoli-Libya, Baku-Azerbaijan and Afghanistan.
TP Missan Company Ltd. (TP MISSAN)
TP Missan Ltd. was established in Jersey, Channel Islands on 10 August 2010 as an affiliate of TPAO to carry out all activities related with technical and commercial oil and gas trade. TP Missan Ltd. currently participates in Missan Project (15%) in Iraq.
TP Badra Company Ltd. (TP BADRA)
TP Badra Ltd. was established in Jersey, Channel Islands on 10 August 2010 as an affiliate of TPAO to carry out all activities related with technical and commercial oil and gas trade. TP Badra Ltd. currently participates in Badra Project (10%) in Iraq.
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 in the Project Companies (BTC Co., BTC Int. Investment Co. and BTC Finance B.V.).
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. TPSCP 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.
TP Petroleum Distribution Inc.
TP Petroleum Distribution Inc. was founded by TPIC on February 16th, 2006. Since 16 July 2009, TPPD’s prior aim is to expand its station network in every region. The company offers its shareholders a fair and principled labour and state guarantee. To date, TP Petrol Distribution achieved a number of 185 dealers. It has become one of the 8 companies with maximum trading volume. It is the 5th biggest company in black product trade and 8th biggest company in sales of fuel oil. TPPD is 6th in 52 dealers with its 3.9% market share.
The fuel oil of TPPD is supplied from; in domestic market from TÜPRAŞ refineries and in the context of inter-distributor trade from other distributor company storages, as import via TPIC from international markets.
Associated Company
KazakTurkMunai (KTM) Ltd. Joint Company
KazakhTurkMunai (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 licenses in 4 different regions of Western Kazakhstan.
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technology and servicesWe contributed Barbaros Hayreddin Paşa Vessel, with the latest technology and design awarded, to the economy of our country in order to unearth the oil and natural gas potential of our seas. We plan to realize more effective and fertile seismic activities in our seas with Barbaros Hayreddin Paşa Vessel that cost 130 million USD.
Within the scope of using advanced technology, 2D seismic data acquisitions system with 240 active channel capacity was re-designed and converted to 3D seismic data acquisitions system with 1,440 active channels. Through this system, shot number per square kilometers was reduced and also cost reduction and time savings were obtained.
3D Seismic Interpretation and Simulation System has been op-erating since May 2005 in order to
minimize the risk factor in hydro-carbon exploration and to carry out integrated and more effective seismic data surveys in the inter-pretation systems through the goal of raising the discovery success ratio in new oil fields.
Today, oil companies are faced with the issue of archiving their well and seismic data in a safe and effective way. To overcome this, PetroBank ® MDS™ software is being used by companies.
Since the wearing of the rigs due to intense drilling activities in re-cent years and new innovations in technology lead us to focus on purchasing new rigs and upgrade current rigs.
Production Field Development TechnologyAll oil and natural gas fields are monitored actively by multidiscipli-nary teams using specialized soft-ware with regularly updated digital database and by broad network on fields.
In addition to this, alternative field development scenarios are com-pared virtually and by determining risks and outcomes, field manage-ment is provided. Production per-formance of fields and wells are being monitored, hence field and well performance is maximized.
Moreover, future production forecasts of the all fields and wells can be made by analyzing “Decline Curve Analysis”.
As a result of these technologi-cal and scientific studies, new production well locations, new production zones, suitable EOR methods in the field and appro-priate stimulation methods to im-prove the performance of existing wells, determining the appropriate secondary production methods or in short, reservoir management is being provided.
R&D
Research Center combined the knowledge gained through R&D studies and new technology and reflected them to laboratory sup-ported projects in the exploration and production activities.
These technologies are;
• Isotope Geochemistry,• Determination of Oil and Gas
Composition,• Determination of Oil Molecular
Parameters,• Surface Geochemical
Prospection,• Soil Gas Analyses,• Determination of Source Rock
Parameters,• Scanning Electron Microscope,• X-Ray Microanalysis
Spectrometer,• Core Gamma Ray Logger,• Determination of Solid Phase
Behavior 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,
• Computer-Aided Mud-Cement Systems,
• ICP-MS,• FTIR.
Services
Seismic Data Acquisition
“Seismic data acquisition” has been carried out by our Corporate with three Seismic Crews.
Seismic Crew-1 and Seismic Crew-3 are operating with “Vibroseis” method. They have been operating in 3D seismic data acquisitions with Sercel-428 XL type recorder and they have 12 receiver lines, 120 receiver channels, totally 1,440 active recorder channel system and 2,500 channel capacity.
Seismic Crew-2 is operating with “Dynamite” as an explosive energy source. In addition to 2D seismic data acquisitions, it has 12 receiver lines, 120 receiver channels, 1,440 active recorder channel system and totally 2,000 channel capacity for 3D acquisitions. Sercel-408 UL type recorder is being used by Seismic Crew-2. In topographic surveys, Leica GPS1200 system is being used by all crews and required data quality control and preplanning studies are carried out by EGHAS software. To increase the production rate, quality control procedures have been applied in all phases. Furthermore, seismic field design, topographic quality control, recorder quality control and static analyses have been applied while performing Seismic Data Acquisition Services.
Seismic Vessel
The vessel purchased by our Corporation in 2012 was built in Drydocks World Dubai yard. It is 84.2 meters in length and its maximum speed is 17 knots. Vessel realizes its seismic researches with Bolt 1500-LL/1900-LLXT dual sources seismic source system and 8 units of 8x5,400 meter streamer.
Non Seismic Data Acquisition Gravimetric and Magnetic Surveys
Non-Seismic Data Acquisition surveys are carried out by one Gravity and Magnetic Acquisition Crew in our Corporate.
Seismic Process Applications
• Seismic Modeling,• Refraction Static,• Signal Processing,• Multiple Attenuation,• DMO,• 2D/3D Post-Pre Stack Time/
Depth Migration and AVO,• VSP Processing,• Long Offset Seismic Line
Process.
Seismic Data Processing Software
2D/3D onshore and offshore data processing software by Geotomo Company has been used to solve problems in South Eastern Anatolia Thrust Zone.
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Interpretation Systems
In order to meet the demand of software and hardware for oil ex-ploration and other requirements, ORACLE database is being used for CBS system and other applica-tions in TPAO. 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 are being used for back-up and disaster recovery systems are being used.
GIS (Geographical Information Systems) and Remote Sensing
In GIS studies, the products of ESRI which are ArcGIS desktop software and ArcGIS Server/ArcSDE geographic data servers and as the data base, ORACLE software are being used. The digitizing of geological maps produced with field surveys by TPAO staff and unification of these maps as vector data with CBS approach is the current project that is studied on intensively and livingly. Additionally, it is planned to conduct studies about unification of vector topographic maps with CBS approach.
Well Geology Services Mud Logging Unit (MLU) Systems
By MLU systems, which provide well pursuits services, 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 System
Within the advanced technology and in accordance with require-ments of our Corporation, Real Time Visualization Project, which had been started to be built up in 2007, was to put into service in 2008.
Research Center Training Activities
• Applied Well Control,• Biostratigraphy,• Field Course of Sedimentology
of Fan Deltas,• Clay Mineralogy and
Microanalysis Techniques and Their Usage in Exploration,
• Basin Classification and Tectonics Course,
• Applied Drilling Fluids Technology,
• Well Cementing Slurry Design,• Matrix Acidizing,• Core Analyses,• PVT Analyses,• Oilfield Water Treatment &
Injection Quality Determination,• Corrosion Control in Oil &
Natural Gas Production.• Oil and Gas Geochemistry• Organic Geochemistry
Drilling Services
With our highly experienced staff, the wells are drilled in a safe, secure and high quality manner with low cost by applying the ever-changing technology.
Activities in this context;
• Drilling Experiences in 2,918 wells,
• Deep Well Experience,• Directional and Horizontal
Wells,• Multi-Lateral Well Drillings,• Extended Reach Drilling.• Unconventional Drillings.
Well Completion Services
Well completion services have being provided in Turkey and abroad by TPAO. Workover, cementing, acidizing, DST, logging and perforating operations have been conducted in oil, natural gas and geothermal wells by following high standards.
Workover Operations
75 completion, 172 recompletion and 5,322 workover jobs were performed by utilizing 14 workover rigs and 7 rodpuller rigs in 2012.
Log Operations
Totally 766 logging and perforating jobs were accomplished in 2012; as well as 37 checkshot/VSP operations.
Technical Operations
In 2012, 563 cementing operations (in which 11,698 tons of cement used), 306 acidizing operations (956,810 gallons of acid used) and 157 DST operations were performed.
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Turkish Petroleum has an effective position among major oil companies in its region with its contemporary, dependable, modern & accredited laboratories at an international level.
TPAO Research Center, established in 1971, has a capacity to perform over 400 different types of analyses and tests with its 29 different laboratories and 128 well-trained, experienced staff.
Research Center participated in various research projects with the other departments of TPAO, universities, state institutions and organizations.
These projects are intended to solve problems faced/will be faced during the exploration, drilling and production activities or to increase the quality and efficiency of the business process.
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, a total of 38 projects, which are in collaboration with exploration, production, occupational safety and environmental protection departments, were performed.
Quality control tests were conducted in the Geology and Engineering Laboratories within the scope of these projects. 51,623 analyses and quality control tests were conducted. 117 technical reports were prepared related to these activities. Throughout the year, totally 3,083 man/day of field/well activities were carried out in domestic and international operations of TPAO.
Applied Well Control Courses given in TPAO Well Control Training Center are accredited for Rotary Drilling Well Control Assessment Center and Introductory Rotary Drilling Well Control Assessment Center by “International Well Control Forum” (IWCF) between November 2011 and November 2015.
Thus, in the context of 13 courses, 71 IWCF Well Control Certificates, 151 TPAO Well Control Certificates were given to 151 personnel. Totally 386 trainees were given occupational and technical trainings with 36 courses on 14 different subjects.
Research Center Laboratory Services
In 2012; training, consulting and engineering services were performed on due basis requests. On behalf of the private domestic and foreign oil companies, sedi-mentological, mineralogical, petrographical, biostrati-graphical and geochemical analyses were carried out.
In this context;• Stratigraphy,• Sedimentology and Reservoir Geology,• Drilling Technology,• Organic Geochemistry,laboratory services were provided.
In Drilling, Reservoir and Production Technologies laboratories, studies and tests 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.
In order to register Research Center Laboratories as contemporary, dependable and umpire laboratories at international level, studies were carried out accordance with TS EN ISO/IEC 17025:2005 “General Requirements for the Competence of Calibration and Testing Laboratories” standards. Total of 34 analyses are being conducted which are Oil Products Analyzes, Water, Drilling Fluids Additives Analyzes, Natural Gas Analyzes.
research center
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Logic will get you from A to B. Imagination will take you everywhere.
Albert Einstein We work for a Turkey producing its own energy and providing an
absolute supply security.
Why not?
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We know that respecting environ-ment means respecting human be-ings and in the context of this, by taking all necessary precautions to mitigate the risk of our activi-ties, we aim to bequeath a clean, healthy and dependable environ-ment to the future.
With environment conscious and model implementations gained by our employees, we are aware of our responsibility to bequeath a clean environment with clean wa-ter, air and soil to the posterity.
With the thought that any activity can’t be sustainable if it is hazard-ous to environment, we conduct our activities with the latest tech-nology, by not harming the envi-ronment in accordance with envi-ronmental legislations.
Human health, occupational safety and environmental protection ac-tivities are carried out extensively with new projects parallel with in-creasing exploration, drilling and production activities.
Employees are being taught by drills of occupational safety and environmental protection before the activities in parallel to the emer-gency intervention plans prepared for these activities and projects.
In 2012, complying with envi-ronmental legislation, biore-mediation, stabilization and neutralization activities were
performed to prevent environ-mental contamination resulting from field activities.
Mud-pit rehabilitations were con-ducted in drilling sites. Within the scope of Waste Management Plans, wastes like paper, bat-tery, toner, cartridge and medical wastes were all collected for elimi-nation and recycling.
In the context of The Management Project of Waste Water Arising by the Oil and Natural Gas Production Activities, to dispose the waste water arising from gas production activities after processing, a pilot treatment facility is being operated and R&D studies were initiated to establish a large scale facility.
Practical activities were carried out to eliminate or minimize the nega-tive effects of the waste water aris-ing from drilling activities aiming at leaving the drilling location at a position like its initial status.
A minimum size mobile indus-trial treatment unit was designed and manufactured to be used in separating the water phase from dense and dirty disposal mud in mud-pits. Successful results were achieved in re-use of waste water for drilling mud.
Regarding all risk levels of activi-ties, our Corporation aims at elimi-nating 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.
Fire Protection Trainings and drills were conducted to eliminate fire risks. Deficiencies were detected and eliminated reviewing the cur-rent systems.
At Corporation health center, pri-mary health service requirements of the staff are provided and “Pa-tient Pursuit System” is being used.
Trainings were organized on oc-cupational safety and environmen-tal protection to assure the idea of sharing responsibility among the employees from the highest rank to the lowest and increase the staff consciousness level on environ-mental protection.
In 2012, 3,573 staff took part in Occupational Safety and Environ-mental Protection trainings.
New subjects were added to our training programmes. These are; working on height courses for Der-rickmen, Emergency Intervention Planning courses for three Shore Facility employees and BOSIET (Basic Offshore Safety Induction and Emergency Training) & HUET (Helicopter Underwater Escape Training) trainings for deep water off-shore projects.
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human resourcesWith the honor of having a dynamic Human Resources System, we believe that success can only be achieved through highly motivated, expert individuals.
We have been conducting our activities for 59 years with its worldwide technological infrastructure and qualified manpower that represented our Corporation successfully in international projects.
In this context, TPAO continuously invests in human resources development in line with its vision to become regionally effective “World-class Energy Company”.
In TPAO, having a rooted company culture with its staff’s great endeavor and dedication, total number of employees is 4,706; 1,636 in General Directorate, 1,681 in Batman, 907 in Adıyaman and 482 in Thrace District Management by the end of 2012.
TPAO’s qualified and experienced staff (1,415 uncovered and 3,291 covered), having the values of team work, communication, innovativeness and sense of responsibility, will carry our Corporation to great success in the future.
Work Analyze Project and Performance Management System
Human being is the most valuable source in institutions in order to compete in sector conditions that globalization requires. Thus, while investing in human beings, institutions have to develop and implement systems.
In this scope, Work Analyze Project that contributes to the integration of “Modern Human Resources Management Functions” was resulted in 2012 by completing the terms of reference, work evaluation and wage system studies for covered personnel. By updating the terms of reference to integrate it to our Corporation’s structure, necessary revision studies were completed in 2012. Work analysis studies of uncovered personnel are ongoing.
Development studies started for “Performance Management System” which was initiated to increase the performance of our staff.
Continuous Training
All corporations need qualified staff, which 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 programs continues for the staff to follow up-to-date information and developing technology in 2012.
In this context, our staff participated in 7,660 in Turkey and 265 abroad, a total of 7,925 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 Employees
TPAO 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.
Besides, TPAO offered holiday opportunities for the employees with their families in its own Social Complex in Güllük/ Muğla.
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You see things; and you say “Why?”. But I dream things that never were;
and I say “Why not?”.
Bernard ShawBy producing human and environmentally
friendly projects in oil and natural gas sector in nearly 60 years at home and abroad, we bring our dreams to the future with the investments realized.
we carry our dreams to the future...
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2012 2011
Current Assets
Cash and Cash Equivalents
Trade Receivables
Inventories
Other Receivables and Current Assets
Non-Current Assets
Cushion Gas and Line-fill
Investments in Associates
Property, Plant and Equipment
Intangible Fixed Assets
Investment Property
Other Non-Current Assets
Total Assets
2,141,808
1,258,728
367,423
283,541
232,116
5,223,066
740,331
20,806
3,944,433
261,192
93,546
162,758
7,364,874
2,810,274
1,820,367
397,657
368,517
223,733
5,696,884
740,440
20,331
4,404,773
303,835
95,688
131,817
8,507,158
TPAO and its Subsidiaries Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011
thousand USD
Assets
finance
2012 2011Liabilities and Equity
Current Liabilities
Trade Payables
Bank Loans
Current Tax Liabilities
Other Payables and Expense Accruals
Non-Current Liabilities
Bank Loans
Asset Retirement Obligation
Provision for Employment Termination Benefits
Deferred Tax Liabilities
Other Non-Current Liabilities
Equity
Capital
Legal Reserves
Foreign Currency Translation Reserve
Retained Earnings
Total Liabilities and Equity
731,998
264,739
187,639
31,621
247,999
1,049,101
47,197
576,393
95,466
311,776
18,269
5,583,775
980,349
2,195,740
(16,815)
2,424,501
7,364,874
904,120
414,276
142,062
32,288
315,494
1,190,905
67,597
695,301
114,108
283,630
30,269
6,412,133
980,349
2,532,058
(16,535)
2,916,261
8,507,158
TPAO and its Subsidiaries Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011 thousand USD
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TPAO and its Subsidiaries Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2012
Revenue
Cost of Sales
Gross Profit
General Administrative Expenses
Exploration and Evaluation Expenses
Marketing and Sales Expenses
Finance Income / Expense (Net)
Share of Profit of Associates
2011thousand USD
3,065,811
(1,442,516)
1,623,295
(196,087)
(275,453)
(112,532)
95,034
545
2012
3,487,169
(1,881,389)
1,605,780
(232,177)
(135,819)
(123,972)
513
(475)
1,029,414
(309,617)
719,797
(5,589)
714,208
1,311,869
(218,386)
1,093,483
280
1,093,763
Profit Before Taxation
Income Tax
Profit for the Year
Change in Foreign Currency Translation Reserve
Total Comprehensive Income
Current Ration (Working Capital Ratio) = 3.11
Acid - Test Ratio = 2.70
Liquidity Ratio (Liquid Asset Ratio) = 2.01
Financial Leverage = 0.25
The Ratio of Equity to Total Assets = 0.75
The Ratio of Equity Capital to Liabilities = 3.06
Gross Sales Revenue / Net Sales Revenue = 0.46
Net Profit / Assert Ratio = 0.13
Financial Ratios Derived from Consolidated Financial Statements of TPAO for 2012
Translation Gain / (Losses)
Other Gains / (Losses)
26,811
171,208
(103,349)
(2,039)
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1. Basis of Presentation for the Financial Statement
1.1. Statutory Books and Financial Statements
The 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 Turkey, 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 prepared in line with IAS/IFRS.
The 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 Period
Under 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 Turkey 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 Statements
Comparison information was classified for the purposes of conformation with the presentation of the current period financial statements if necessary. 1.4. Basis of Consolidation
Consolidated financial statements comprising TPAO (“Company”, “Parent Company”) and the partnership controlled by TPAO, has been prepared by considering the financial statements belonging to the year ending on 31, December 2010.
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 2012 are as follows:
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.
Subsidiaries and Affiliated Companies and Their Shareholding Percentages
Effective Rate of Ownership (%)
Affiliates and Subsidiaries
Method
KTM
TPIC
TPBTC
TPSCP
TPOC
AIOC
TP MISSAN
TP BADRA
49
100
100
100
100
100
100
100
Equity Method
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
(6.75% share of ACG project)
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 Policies
If 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.
2. Summary of Significant Accounting Policies
2.1. Revenue
The group’s income consists of crude oil and natural gas sales and the revenues of various services. 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, and• 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 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.
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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.
2.2. Inventories
Inventories 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 has 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.
2.3.2. Intangible Fixed Assets
Intangible Fixed Assets consists of special costs, rights and other intangible fixed assets. Mentioned intangible fixed assets are amortized in accordance with their predicted life-time.
2.4. Goodwill
In 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 is 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 Assets
In 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.
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.
2.6. Borrowing Costs
The 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 Instruments
Financial instruments consist of following financial assets and liabilities;
Cash and Cash Equivalents
Cash 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 Turkey 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 exchange rates announced by Central Bank of the Republic of Turkey at the balance sheet date.
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 Parties
As given in the report, 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.
Short and Long Term Bank Borrowings and Trade Payables
Short 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 Investments
Financial Instruments driven to equity which do not have any registered value in active market and its fair value con not be measured certainly are reported as their cost of value.
2.8. Provisions, Contingent Liabilities and Obligations
The 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
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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.
2.9. Taxes Calculated On the Basis of the Company’s Earnings
2.9.1. Corporate Tax
In Turkey, the corporate tax applied to the legal tax basis, to be found with the addition of non-deductible 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 Turkey, 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 Tax
Deferred 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 declaration of Tax 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 arises 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.
2.10. Exploration, Preparation and Development Expenses
The expenses in oil search and production sector consist of four basic parts, which are:• Acquisition Expenses • Exploration Expenses• Development Expenses• Production Expenses.
1- Acquisition Expenses
The acquisition expenses are all expenses incurred to have the oil right.
2- Exploration Expenses
The expenses made in the process from the acquisition of the exploration license to the commercial oil discovery are generally considered exploration expenses.
3- Development Expenses
The development expenses are the expenses made subsequent to the acquisition of the field and oil exploration stages
4- Production Expenses
Production expenses are expenses incurred in the oil production stage. International Financial Reporting Standards: 6 Standard for the Exploration for and Evaluation of Mineral Resources cover 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 Turkey 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 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.
2.11. Petroleum Accounting
Successful Effort Method
The 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
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the production of petroleum or natural gas. In case these operations do not achieve the objective, the amounts should be capitalized.
The petroleum exploration and development expenses capitalized in case of finding reserves is subject to depletion by redemption rate found by dividing the actual production to beginning period total estimated reserve amount.
Estimation of Oil and Gas Reserves
Proved 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 Obligations
The 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 Plans
According to existing social legislation applied in Turkey, 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.
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.
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 Statement
The 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 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 Changes in Foreign Exchange Rates
In 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 n 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.
2.16. Related Parties
If 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:
(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.
2.17. Earning Per Share
The 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 Events
Post 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 Liabilities
A 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.
Batman District Management72100 Batman / TURKEYPhone: +90 488 213 27 10Fax: +90 488 213 41 49 - 213 39 14
Thrace District Management39750 Lüleburgaz - Kırklareli / TURKEYPhone: +90 288 417 38 90Fax: +90 288 417 22 03
Adıyaman District Management02040 Adıyaman / TURKEYPhone: +90 416 227 28 11Fax: +90 416 227 28 07 - 18
Headquartes
District Managements
Subsidiary
International OfficesTurkish Petroleam CorporationSöğütözü, 2180th Avenue,No: 8606100 Çankaya - Ankara / TURKEYPhone: +90 312 207 20 00Fax: +90 312 286 90 00 - 286 90 01e-mail: [email protected]: www.tpao.gov.tr
Azerbaijan TPAO / TPOC / 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 OfficeTripoli Tower 1, 10th Floor, No: 101 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]
TPOC East Mediterranean OfficeŞehit Ecvet Yusuf Cad., No: 44/AYenişehir, Lefkoşa / TRNCPhone: +90 533 825 20 40 e-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]
TPOC Afghanistan OfficeÖzger Dursune-mail: [email protected]: +937 737 44 446
TPPD, Turkish Petroleum Distribution Inc.Söğütözü Cad., No: 27 06520 Ankara / TURKEYPhone: +90 312 218 58 00 Fax: +90 312 287 51 24e-mail: [email protected]
contact information
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tasarımcytasarım / www.cytasarim.com
İSTANBUL is entitled to host 22nd World Petroleum Congress (WPC) in 2017.
22nd World Petroleum Congress (WPC)
this time
istanbul
World Petroleum Council, whose first was held in 1933, is the most prestigious organization of the oil and natural gas sector and it is held in every three years. Today, 70 countries including Turkey are the members of the World Petroleum Congress, the most comprehensive organization in the sector.
İstanbul, carrying its promotion activities with the motto of “this time – İstanbul”, was chosen as the host city in this huge organization known as olympics of the oil and natural gas sector by eliminating respectively Copenhagen, Astana and Houston in the contentious voting held in Calgary, Canada on 23 October 2013.
It is estimated that more than 500 CEOs of several companies, nearly 50 ministerial level attendee as well as 7,000 delegates and 15,000 visitors will participate to 22nd World Petroleum Congress in İstanbul in 2017.
İSTANBUL is entitled to host 22nd World Petroleum Congress (WPC) in 2017.
22nd World Petroleum Congress (WPC)
tpao.gov.tr
TURKISH PETROLEUM CORPORATION2012 ANNUAL REPORT
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