June 11, 2013 / 1:57 PM / in 5 years

Exxon in talks for stake in Turkey's Black Sea block

NEW DELHI (Reuters) - ExxonMobil (XOM.N) is in talks with Turkey’s TPAO to buy a stake in a block in the Black Sea, and the country is on the hunt for shale gas in its own territory, the acting head of the state-owned energy company said on Tuesday.

“ExxonMobil wants to be in the Black Sea with us, in deep offshore,” TPAO’s acting president and chief executive, Besim Sisman, told Reuters on the sidelines of an industry conference.

“It’s on the Ukraine and Romania side,” he added, without giving further details.

Turkey, keen to reduce its dependence on imports, has stepped up exploration efforts in the Black Sea and Mediterranean in cooperation with foreign companies. But Turkey has yet to find any oil.

Its domestic production is in decline and covered only about 7 percent of demand in 2012, according to the International Energy Agency (IEA). Of its hefty imports, about 39 percent came from Iran in 2012 but sanctions have resulted in sharp cuts.


The country is also seeking exploration and production assets elsewhere in the region and is just starting to look for shale gas on its own territory.

Sisman said TPAO would not bid for blocks in Algeria, a turn around from January when Energy Minister Taner Yildiz said TPAO planned to take part in upcoming Algerian oil exploration tenders. He did not give a reason for the change.

In Iraq, “we have four projects and that is enough for us,” Sisman said, adding that “it is not our business to go to the north side of Iraq.”

    Turkey is hoping to work on exploration and production in northern Iraq through commercial contracts with Russian and U.S. companies, Yildiz told Reuters at the end of May.

    The country has increasingly courted Iraqi Kurdistan over oil and gas, upsetting the central government in Baghdad which says it alone has authority to control oil exports from Iraq.

    Sisman said TPAO would join the latest bidding round for blocks offshore in Lebanon with Royal Dutch Shell (RDSa.L), which it already partners with in the Mediterranean and in shale exploration.

    TPAO is drilling a first well for shale gas with Shell currently, Sisman said, and is talking to other companies for further work in the sector.

    “Small and big, they are coming to Turkey ... but we want to choose only strong companies” with experience of fracking, the process used to extract oil and gas from shale rocks, he said.

    Sisman said TPAO is scouting for oil assets in Africa as it wants to take more risk to generate higher returns.

    Reporting by Nidhi Verma; editing by Jeff Coelho

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