Petroleum sector in Turkey Petroleum Engineering 2017 Feridun DEMIR Department of Chemical Engineering, Osmaniye Korkut Ata University, Osmaniye 80000, Turkey Petroleum Engineering 2017 6th International Conference on Petroleum Engineering June 29-30, 2017 Madrid, Spain

Outline Outlook of global oil and natural gas sector Global oil sector Global oil reserves, production, reserves life, consumption, trading, activities Global natural gas sector Global natural gas reserves, production, reserves life, consumption, trading, storage activities Outlook of oil and natural gas sector in Turkey Energy outlook Oil reserves, production, reserves life, consumption Natural gas reserves, production, reserves life, consumption activities Hydrocarbon sector; Developments in hydrocarbon exploration and production activities Current status of hydrocarbon reserves

Outlook of world’s energy Fossil resources such as oil, natural gas and coal bear a weight close to 87% in energy resources Primary energy consumption increases by 37% between 2013 and 2035.

Outlook of world’s energy Total energy consumption Total Energy Consumption 8136,0 8588,8 9388,2 10940,0 12181,4 13147,3 14348,0 15498,6 16399,6 17157,5 Million tonnes oil equivalent (MTOE) 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 of which: OECD # 4639,4 5006,3 5439,1 5673,1 5601,5 5503,1 5693,8 5661,8 5631,7 5578,2 Non-OECD 3496,7 3582,5 3949,1 5266,9 6579,9 7644,2 8654,3 9836,8 10767,8 11579,3 European Union # 1669,2 1661,5 1731,7 1821,2 1755,4 1630,9 1651,6 1609,9 1560,0 1508,3 US 1967,3 2120,7 2312,4 2350,2 2285,3 2280,6 2394,4 2360,2 2347,2 2311,9 China 681,4 885,0 1003,1 1793,7 2487,4 3014,0 3510,7 4004,9 4277,8 4425,3 India 195,0 251,4 316,0 393,6 541,0 700,5 870,0 1102,0 1349,6 1603,0 Source: BP Energy Outlook to 2035 Demand increase rates on the basis of energy resources in the period from 2012 to 2035; 13% in petroleum, 17% in coal, 48% in natural gas, 66% in nuclear and 77% in renewable resources. While the largest increase in world primary energy demand is coming from OECD member countries, non-OECD countries, especially China, are the biggest shareholders in the increase of demand since 2008. However, after 2020, China is expected to transfer this position to India in the world's primary energy demand increase.

Outlook of world’s energy Source: BP Energy Outlook to 2035 Oil, natural gas and coal remain the dominant sources of energy powering the world economy.

Outlook of world’s energy Natural gas is the fastest growing fuel. It overtakes coal to be the second-largest fuel source by 2035 Oil continues to grow and remain the dominant sources of energy powering the world economy. Its pace of growth is expected to slow gradually until 2035 The growth of coal is expected to decline sharply. Coal consumption is expected to peak in the mid-2020s. Renewable energy is the fastest growing source of energy, although its contribution is 3% in 2015 . Its share in primary energy is expected to grow up to 10% by 2035. Renewables, together with nuclear and hydroelectric power, are expected to account for half of the growth in energy supplies over the next 20 years.

Global oil reserves 2012 proved oil reserves World proven oil reserves for 2012 increased by 0.9% to 1.669 billion from 1.654 billion. The reserve 72.6% are in OPEC (1.212 billion barrels) and 14.3% are in OECD countries (238.3 billion barrels)

Global oil production Oil production MTOE 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 North America 654,5 645,8 642,6 637,8 638,8 910,3 940,0 1007,5 995,9 1004,1 S & C America 233,9 300,1 343,4 374,4 375,8 396,0 389,9 404,5 434,8 454,0 Europe 218,0 311,1 332,3 268,6 196,5 164,7 146,4 133,3 94,6 66,6 CIS 570,3 358,3 396,2 580,3 662,8 682,0 692,7 708,3 716,2 730,2 Middle East 851,8 979,2 1151,1 1227,4 1220,7 1412,4 1508,0 1618,2 1727,6 1818,7 Africa 321,0 339,6 370,9 466,4 481,8 398,0 386,6 392,8 390,2 382,7 Asia Pacific 325,7 352,2 380,8 382,4 402,4 398,3 355,8 348,7 331,6 311,9 Total Oil Production 3175,4 3286,3 3617,4 3937,5 3978,8 4361,6 4419,5 4613,2 4690,9 4768,1 Source: BP Energy Outlook to 2035 World oil production, which was 84.2 million barrels /day in 2011, increased by 2.4% to 86.2 million barrels /day in 2012 An increase of 2 million barrels /day in global oil production is due to the increase in production in the United States and OPEC countries such as Saudi Arabia, United Arab Emirates, Qatar, Iraq and Libya OPEC member countries have met about 40% of global oil production.

Global oil reserves life Source: BP Statistical Review, 2013 "Oil Reserves Life", with existing technologies, is known as the value obtained by dividing the economically produced proven reserves to the existing production. World oil reserves increased by 0.9% compared to 2011, however, with the effect of increased oil production, the global oil reserve life of 53.8 years in 2011 decreased to 52.9 in 2012.

Global oil trading World oil consumption, which was 88.9 million barrels /day in 2011, increased by 0.9 million barrels /day in 2012 and was 89.8 million barrels /day. While there was an increase in demand especially in non-OECD countries in 2012, China (5%) and Japan (6.3%) are among the countries attracting attention in this sense. Oil demand for countries outside the OECD is expected to pass OECD countries' oil demand by the end of 2013. The main locomotive in the petroleum demand is the transportation sector. World Energy Outlook 2013 (WEO 2013) has reported that global petroleum demand would be expected to reach 101 million b/d in the year of 2035.

Outlook of global natural gas The amount of natural gas reserves, which was 187.8 trillion cubic meters in 2011, decreased by 5 billion cubic meters in 2012 to 187.3 trillion cubic meters. The natural gas reserves of the OECD countries are 18.6 trillion m3, accounting for 10% of the total reserves.

Global natural gas reserves life Source: BP Statistical Review, 2013 The world natural gas reserve life has decreased to 55.7 year in 2012 due to a 0.3 percent decrease in natural gas reserves.

Global natural gas sector Global natural gas production, which was 3.291 trillion cubic meters at the beginning of 2011, increased by 1.9% in 2012 and reached 3.364 trillion cubic meters. This increase in natural gas production is largely due to Saudi Arabia, the United States, Qatar, Norway and Iran. World natural gas demand, which was 3,232 trillion cubic meters in 2011, was realized as 3,314 trillion cubic meters at the end of 2012. Latin America, North America and Africa were at the forefront of the regions where demand growth was most visible. China and Japan are the countries with the highest increase in gas consumption, with 9.9% and 10.3% respectively. At the beginning of 2013, global natural gas storage capacity was recorded as 377 billion m3.

Outlook of oil and gas sector in Turkey Turkey is geographically close to the rich source countries in terms of the oil and natural gas reserves of the world such as Middle East, Caspian Region and Central Asia. Turkey is a natural bridge between the source countries and the importing countries in oil and natural gas, especially for the EU countries. Turkey is among the most important countries with the potential to provide diversity and thus supply security in terms of the route of oil and natural gas resources to the producer's consumer. Turkey is among the "energy intensive" economies in terms of primary energy intensity. Turkey's energy intensity value of 0.11 is 12% lower than the average value of the International Energy Agency Europe Region of 0.14. In the primary energy supply of Turkey with 120 million tons of petroleum equivalent (MTPE), natural gas ranks first with 30.9% while petroleum ranks second with 25.3%.

Energy outlook of Turkey In the primary energy supply of Turkey with 120 million tons of petroleum equivalent (MTEP), natural gas ranks first with 30.9%, while oil ranks second with 25.3%.

Sectorial distribution of Turkey’s Energy 26.3% of Turkey's primary energy consumption is in housing, 26% in industry, 25.7% in conversion sector and 16.8% in transportation sector.

Energy needs of Turkey Source: Ministry of Energy and Natural Resources of Turkey (ETKB) The ratio of primary energy demand to domestic production was 27.5% in 2012. In other words, Turkey's energy outsourcing is 72.5%.

Oil production of Turkey Source: Turkish Petroleum (TP) report, 2013 In 2013, Turkey produced approximately 48,000 barrels of crude oil per day; While 500,000 barrels of crude oil per day were consumed. As a result, the domestic crude oil production consumption rate was 9.6% in 2013.

Natural gas production of Turkey Source: Turkish Petroleum (TP) report, 2013 In 2013, the consumption rate of domestic natural gas production in Turkey is around 1.5%. In other words, while import dependency rate in petroleum is 90.4%, Turkey's import dependency rate in natural gas is 98.5%.

Distribution of imported oil according to source countries Source: Ministry of Energy and Natural Resources of Turkey (ETKB) Turkey's three countries, which stand out in crude oil import dependency, Iraq (32%), Iran (28%) and Saudi Arabia (15%) Iran's share fell from 51% in 2011 to 39% in 2012 and to 28% in 2013 due to the embargo on Iran in 2013 Iraq's share in this sense is close to 30% from 10%.

Distribution of imported natural gas according to source countries Source: Ministry of Energy and Natural Resources of Turkey (ETKB) In the distribution of natural gas imports according to countries in 2013, Russia ranks first with 58%. This country is followed by Iran (19%), Azerbaijan and Algeria (9%) 98% of the Turkish gas demand is met by imports. About 45% of the consumed natural gas is used for electricity generation. 45.24 billion m3 natural gas was consumed in 2012 and this figure was met with 1.47% (664.4 million m3) of domestic production.

Hydrocarbon reserves in Turkey Turkey's producible oil reserves in 2013 amounted to 296 million barrels (43.1 tons), slightly more than the 294 million barrels recorded in 2012. Considering the current production and consumption trends, the remaining producible crude oil reserves have a life span of approximately 18.5 years if new discoveries are not made. Turkey's natural gas reserves are recorded as 6.16 billion m3 in 2013. If no new discoveries are made, in the present case, the remaining producible natural gas reserves have a life span of about 10 years. 7% of the oil fields in Turkey have reserves of 25 - 500 million barrels and the remaining 93% have less than 25 million reserves. In other words, 93% of the oil fields discovered in Turkey are small-scale and 7% are in the mid-range. The vast majority of the fields are the older ones, and therefore the yield of the wells is gradually decreasing.

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