Petroleum draft aims to ban rentiers for research firms

Petroleum draft aims to ban rentiers for research firms

ANKARA - Hürriyet
Petroleum draft aims to ban rentiers for research firms

A draft code on petroleum separates regulations for offshore and onshore oil and gas seacrh. AA photo

A new draft on the petroleum market code that aims to put an end to rentiers in the sector has been presented to the presidency of the Turkish parliament (TBMM).

The new petroleum draft law will introduce new regulations that will be able to force companies to search for oil and gas, instead of idly holding fields for long periods of time.

Under the present law, companies are able to hold petroleum fields without making any investments.

However, according to new law draft, companies that do not make investments in the areas they are committed to will be discharged from the petroleum field and their deposits will not be refunded.

The new draft will oblige the companies to present their annual investment program in order to obtain their research license.

The Turkish Petroleum Affairs General Directorate (PIGM) will monitor their investment commitments every year and will have the right to discharge the company and also the deposits that cost 2 percent of their investment program.

Control mechanism in new code

Turkey is divided into two petroleum regions - onshore and offshore. The offshore region is also divided into two regions - interior and exterior territorial waters.

If PIGM approves the companies’ application, the research license will be assigned in
60 days.

The findings from field research will be shared with PIGM, which will hold them confidentially. The maximum validity duration (with extensions) of search licenses will be nine years on land and 14 years in internal territorial waters.

The researcher or exploiter company will be obliged to pay one eighth of its petroleum production to the state.

Foreigners who are able to declare addresses in Turkey will also be allowed to obtain licenses for researching and production of petroleum, according to the new draft.

However, companies that wish to research oil and gas in forests and national parks will still have to receive official permission, according to the current Forest Law.

Those companies that carry out harmful activities against local people and nature will be imposed with a fine of between 50,000 and 500,000 Turkish Liras, according to the new draft. In addition, their license will be canceled and their research work will be stopped.