We’ve noted recently that Turkey is a hot venue for both the majors and the juniors, but that there still hasn’t been that one big find to put the country on the fossil fuels map in terms of exploration and production. For now it’s all about exploration potential, analog geology, good governance and plenty of infrastructure to get product to market.
But now there’s another potential game-changer that could make this venue even more attractive for E&P companies … and the mainstream media hasn’t picked up on it, so here’s your chance. The significance of this should not be underestimated.
Turkish Parliament is debating new hydrocarbons legislation right now that would significantly weaken the state-run oil company’s (TPAO) exploration and licensing authority and force it to compete on equal footing with foreign companies. This is game-changing legislation for potential new entrants into this market and it will usher in a new group of power brokers and gatekeepers.
The Turkish Parliament began debating the bill last week and while there is strong opposition to this bill, it also has the full support of the ruling Justice and Development Party (AKP), so stands a good chance of passing.
Overall, the bill is aimed at liberalizing Turkey’s oil and gas industry to attract more foreign investment at the expense of the state-run oil company’s (TPAO) position. Turkey has its sights set on a much more ambitious oil and gas drive and the impetus to speed up exploration has never been greater.
The forces seeking to turn Turkey into a major energy hub have gained much influence in this game. Because there hasn’t been that one big find yet in Turkey, Ankara understands the need to raise the stakes here to lure in more explorers and investment by removing some of the risk.
If passed, the bill will:
• Allow foreign explorers to compete with TPAO on equal footing
• Strip TPAO of its status being in charge of exploration and drilling
• Remove the requirement for foreign companies to partner with TPAO
• Makes the Turkish Cabinet responsible for deciding who gets offshore licenses
• Extend license periods
• Cut profit taxes from 55% to 40%
• Make it easier to hire…