Turkey - Petroleum Exploration Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Rept No. P-2887-TU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF TURKEY FOR A PETROLEUM EXPLORATION PROJECT October 30, 1980 This dUmean hs arestrkice dibutio and may abe _ed by redpien ony in tbe performace Of tbelircil dtiwes. Its contents my n otherwise be dislsezd withot Wocld Dhk authorztIon.  TURKEY CURRENCY EQUIVALENTS Currency Unit Calendar 1978 July 1979 Jan. 1980 /1 October 1980 US Dollar 1 - TL 24.28 TL 47.10 /2 TL 70.0 /3 TL 83.50 /3 TL 1 - US$ 0.04 US$ 0.02 US$ 0.01 US$ 0.01 /1 Since January 1980 the rate is being adjusted for the differential inflation between Turkey and its major trading partners. TL 70/$l was used for this report. /2 Except for imports of crude oil, petroleum products and fertilizer raw materials, and exports of agricultural products benefitting from official price supports, for which it was TL 35 = US$1.00. /3 Except for imports of fertilizers and insecticides/pesticides, as well as raw materials and inputs for their manufacture, for which the rate was TL 55 !- US$1.00, and is TL 70.0 - US$1.00 as from October 1980. WEIGHTS AND MEASURES 1 Barrel (Bbl) = 0.159 cubic meters (i3) 1 Cubic foot (CF) = 0.028 m3 1 British Thermal Unit (BTU) = 0.252 kilocalories (Kcal) 1 Kilowatt hour (Kwh) = 2.978 Kcal 1 Metric ton (mT) of oil, 350 API = 7.3 Bbl 1 Kilometer (km) = 0.621 miles FISCAL YEAR Republic of Turkey : March 1 to February 28 Turkiye Petrolleri Anonim Ortakligi (TPAO) : January 1 to December 31 ABBREVIATIONS AND ACRONYMS Bbls - Barrels BOTAS - Boru Hatilari ile Petrol Tasima A.S. (Petroleum Pipeline Corporation) CO2 - Carbon dioxide EOR - Enhanced Oil Recovery GDPA - General Directorate of Petroleum Affairs GOT - Government of Turkey GWh - Gegawatt (1,000,000 kilowatts) IPRAS - Istanbul Petrol Rafinerisi Anonim Sirketi MCF/d - Thousand cubic feet per day MENR - Ministry of Energy and Natural Resources MMCF/d - Million cubic feet per day MW - Megawatt (1,000 kilowatts) SPO - State Planning Organization TEK - Turkiye Elektrik Kuruma (Turkish Electricity Authority) TKI - Turkiye Komur Isletmeleri Kurumu (Turkish Coal Enterprises) TOE - Metric tons of oil equivalent in heating value TPAO - Turkiye Petrolleri Anonim Ortakligi (Turkish Petroleum Corporation) TPY - Tons per year TSKB - Turkiye Sinai Kalkinma Bankasi (Industrial Development Bank of Turkey) UNDP - United Nations Development Program  FOR OFFICIAL USE ONLY REPUBLIC OF TURKEY PETROLEUM EXPLORATION PROJECT Loan and Project Summary Borrower: Republic of Turkey Beneficiaries: Turkiye Petrolleri Anonim Ortakligi (TPAO), and the Ministry of Energy and Natural Resources and its General Directorate of Petroleum Affairs (GDPA). Amount: US$25.0 million Terms. Seventeen years including four years of grace, at 9.25 percent interest per annum. Relending Terms; $21.7 million would be re-lent to TPAO for 17 years including four years grace at 11.10 percent. TPAO would bear the foreign exchange risk. Project Description: The proposed project will; (a) contribute to Turkey's efforts to accelerate the exploration and development of its petroleum potential; (b) to strengthen TPAO's exploration activities through the introduction of modern geophysical, data processing and interpretation techniques; (c) assist GDPA in its efforts to attract foreign oil companies to explore in Turkey and to get needed expert advice for negotiating exploration/ production contracts; and (d) help promote effective energy conservation by identifying energy savings through energy audits. The project includes: (i) geological studies; regional and basin studies integrating existing geological, geo- physical and well data in southeastern Turkey, and a parallel study of petroleum geochemistry; (ii) technical assistance and training; provision of experts to help TPAO in specialized areas of carbonate geology, reser- voir geology, geophysical data control and interpre- tation and training of TPAO and Ministry of Energy staff, in the fields of geology, geochemistry and geo- physics and provision of experts to help GDPA play an effective role in attracting foreign participation in exploration; (iii) seismic geophysical surveys including data interpretation in southeastern Turkey, by two seismic crews each for two years; (iv) exploratory drilling of four to six medium-depth wells about 3000 meters deep, based on the results of geophysical and geological studies and seismic surveys; (v) a program of ' This document has a restricted distribution and may be used by recipients only in the performance of | their official duties. Its contenst may not otherwise be disclosed without World Bank authorization.  - 1.1 - energy audits in the power generating sub-sector and a group of selected industrial sub-sectors, with a view to improve energy efficiency and promote energy conservation. Except for the exploratory drilling component, which has the normal risks inherent in oil exploration, the other parts of the project are in the nature of studies and technical assistance designed to develop a sound exploration program and reduce exploration risks. Project Cost Estimates; Local Foreign Total