Chevron close to deal on Turkish oil drilling-report

ISTANBUL Feb 15 (Reuters) - Turkey expects to complete talks with U.S. oil giant Chevron by this summer on a deal that may be worth at least $500 million to explore for oil in the Black Sea, the state-run Anatolian news agency said on Sunday.

Chevron (CVX.N) is interested in deep-sea blocks off western and central sections of Black Sea coast, Yurdal Oztas, assistant general manager at state oil company TPAO, told Anatolian.

"Our talks with Chevron have been positive, and we hope to reach the point of an agreement by this summer," said Oztas, who added he saw no foreseeable obstacles to a deal.

Turkey wants to boost its production of oil and natural gas to reduce its near total reliance on fuel imports which helped swell its current-account deficit to $41 billion in 2008.

Chevron would join Petrobras (PETR4.SA), Brazil's state oil firm, and ExxonMobil Corp (XOM.N), the world's biggest listed oil company, in exploring off Turkey's Black Sea coast, where natural-gas production began in 2007.

Petrobras is investing $400 million and is due to begin drilling off the Black Sea coast this year in an area they believe contains 5 billion barrels of oil.

Exxon and TPAO in November agreed to invest $450 million to begin exploring in the Black Sea at the end of this year.

The 75 percent decline in global oil prices since a record in July won't affect Chevron's interest in the project because both sides expect prices to rise by the time drilling commences, Oztas said, according to Anatolian. The project will cost a minimum $500 million, he said.

Separately, TPAO is in talks on exploring for Iraqi natural gas with companies from Japan, India, Russia and Italy on setting up a consortium, Oztas said, without naming them.

TPAO needs foreign oil partners to explore and drill to share the risk and high costs, as well as secure Turkey technology transfers, he also said.

Besides exploration in the Black Sea, TPAO is carrying out early seismic tests in the eastern Mediterranean.

(Editing by Jason Neely)