David O'Byrne in Istanbul -
If they made soap operas about state-owned companies, one of the standard plot lines would be that of the long-serving technocrat, despairing of the endless red tape, one day striking out on his own. It's a story Ongun Yoldemir, founder and CEO of Turkish oil company Merty Energy knows well, having quit his position as senior geologist at Turkey's state oil extractor TPAO in 2001 to set up in business on his own.
"I was completely fed up with the bureaucratic mindset that had me presenting the same projects over and over again, only to see them refused investment," explains Yoldemir.
Although oil prices back then were at an all-time low, Yoldemir knew that the oil and gas prospects he had been working on were commercially viable, and armed with an inside knowledge of TPAO's then-stalled exploration programme in 2003, he founded Merty Energy with the aim of further exploring Turkey's hydrocarbon potential.
With oil prices rising steeply, Merty initially began as three-man team offering seismic surveying services. Today, with four seismic crews, it is the biggest seismic surveying company in Turkey; and with 18 exploration licenses, 103 technical staff and 100 ancillary staff, one of the fastest growing energy companies in the region.
Key to that rapid growth has been Yoldemir's in-depth knowledge of Turkey's geological make-up, and his ability to make use of the latest technology by forming strategic partnerships with companies that have been able to help leverage Merty into areas of expertise, which might otherwise have taken decades to develop.
And that growth is set to continue, with the company acquiring its own drilling rig and two of its 18 licenses about to begin production. This summer should see the company produce up to 200,000 cubic metres (cm) per day of natural gas from seven wells in the Turkish province of Thrace, close to the Greek and Bulgarian borders, with another 23 geological structures in the same prospect still waiting to be drilled. "There's a lot more gas in there," he says, explaining that the prospect had belonged to his former employers TPAO, which had found no commercially exploitable volumes.
A second former TPAO prospect at Alasehir in Turkey's Aegean region is also set to begin production, this time of oil. "TPAO found oil mixed with gas, water and carbon dioxide, and abandoned it as too complex, but we've drilled one well and found a field that will produce 1,000-2,000 barrels a day without pumping," he explains, adding that with the field's reserves estimated at over 30m barrels, he's confident it can supply as many as 15 more production wells over the next 20 years.
Meanwhile, exploration blocks that Merty holds at Bafra in southwest Turkey and at Adana on the country's east Mediterranean coast both have oil and gas seeping at the surface. "The villagers collect gas in water tanks and use it for cooking," he laughs.
The size of Merty's blocks, and the potential size of the reserves, mean that Yoldemir is looking for a partner to help develop them. But for Merty partnerships are nothing new. Four companies, including Australian company Otto Energy, are already involved in its Thrace operations, while other partners have signed up for other exploration and service projects. Xtract, a subsidiary of UK-based Cambrian mining, has taken a 20% stake in a Merty offshoot set up to prospect for oil in some exploration blocks Merty has acquired in Kyrgyzstan. Merty has also formed a commercial partnership with Scandinavian company Scangeo, which will allow it to use Scangeo vessels to conduct offshore seismic surveying on its own offshore concessions and those of other companies - including Yoldemir's former employers TPAO.
The law's an ass
But for all his successes, Yoldemir is still railing at the inefficiencies of Turkish bureaucracy. Pointing to the country's long outdated petroleum law, he complains about how it restricts companies like his own to exploiting only oil and gas reserves, preventing them from developing any other resources. "We've found reserves of coal in every well we've drilled in Thrace, while in Alasehir we found geothermal steam at 143 degrees Celsius - ideal for a geothermal power plant, but the law won't let us develop any of it," he complains.
"We need is to replace the petroleum law with a 'sub surface' law," he says, adding that he's hopeful that a draft currently being worked on by the energy ministry can be passed by the end of the year.
"And if they can also grant investment zone status and tax breaks for new fields, that would help enormously with encouraging new development," he smiles.
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