Turkey boasts friendly fiscal terms for operators onshore and offshore, and Toreador Resources Corp., Stratic Energy Corp. and state-owned TPAO found hospitable conditions in the Black Sea off northern Turkey, as well.

The latest handshake occurred when the joint venture, operated by Toreador, used the

The Southern Cross semisubmersible drills a successful well offshore Turkey for Toreador Resources Corp. (Photo courtesy of Toreador Resources)
Atwood Southern Cross semisubmersible drill ship to drill in 328 ft (100 m) of water offshore Akcakoca to find 266 ft (81 m) of net gas sands in seven zones between 3,671 and 5,070 ft (1,146 and 1,545 ft) in Eocene Kusuri sands with its Akcakoca-3 well.

An earlier well on the structure, the Akcakoca-1, about 984 ft (300 m) to the north, was drilled, plugged and abandoned in 1973. The new well is higher on the structure.

“The logs and pressure tests have indicated more pay zones than the original prognosis for the well as we continue to see the phenomenon of the upper gas zones in the South Akcakoca Sub-Basin tending to mask the presence of the lower gas zones on our seismic,” said G. Thomas Graves III, president and chief executive officer.

This is the 10th in a string of successes for the partners in the basin. Previous wells have been on the Ayazli, Dogu Ayazli (East Ayazli), Bayhanli and Akkaya structures closer to shore. The companies anticipate first production early in 2007 from the project that has taken only a couple of years from the first commercial-sized discovery.

In just the past year, the companies approved the engineering, procurement, installation and commissioning contract for three tripod platforms on the field, awarded it to Momentum Engineering of Dubai and started work on the onshore production and offshore transportation infrastructure while working two jackup rigs.

Toreador completed the successful Dogu Ayazli-1 with 12 pay zones over 197 ft (60 m). Those pay zones corresponded with the earlier Ayazli discovery, but they were thicker with an initial production rate of 7.3 MMcf/d on a 32¼64-in. choke with 1,150 psi of flowing wellhead pressure.

A couple of weeks later, the Dogu Ayazli-2 confirmed what the company saw in the earlier well with gas from 10 zones over a 348-ft (106-m) interval. At that point, the partners decided to invest in three production tripods.

A short time later, the companies tested the Akkaya-2 development well on the Akkaya structure east of its previous discoveries. That well tested at 6.2 MMcf/d of gas through a 32¼64-in. choke with 1,077 psi of flowing wellhead pressure.

Close on the heels of that discovery, Toreador reported the Bayhanli-1, on the Bayhanli structure east of Dogu Ayazli but southwest of Akkaya, reached 82 ft (25 m) of gas sands with another 82 ft (25 m) yet to be perforated. Meanwhile, it tested the Akkaya-3 for 6.2 MMcf/d of gas.

By June, it started installation of the first tripod and reported the Bayhanli-1 tested for 7.2 MMcf/d of gas from 48 ft (14.5 m) of perforations through the same-sized choke as the other wells with 1,100 psi of flowing wellhead pressure. It also started the mechanical work on the onshore production center near the town of Cayagzi.

The companies also completed and tested the 11-mile (18-km) pipeline from the production center to the tie-in point with Turkey’s national grid.

The production center is designed to handle up to 75 MMcf/d of gas in the first phase of development and could be expanded to double that capacity. Although the plant has higher initial capacity, Toreador expects 50 MMcf/d of production in the first phase of development of the sub-basin.

Moving ahead, the Southern Cross will drill another well for Toreador, then move offshore Bulgaria to drill a couple of wells for Melrose and return to Turkey for another Toreador well before moving on to other operators in the Black Sea.

Working in Turkey is fairly easy. TPAO is a 51% partner in the sub-basin play, Toreador has 36.75% and Stratic has the rest, but elsewhere in coastal waters offshore Turkey, Toreador has 50% interest in eight blocks offshore in the western Black Sea and 100% interest in seven blocks in the eastern Black Sea. The royalty rate is 12.25%. Turkey has an income tax, but foreign investors are allowed to repatriate “registered capital” before paying income taxes.

“Turkey is a net hydrocarbon importing country. They’re doing their best to attract foreign investment,” said Stewart Yee, vice president of investor relations.

The oilfield service companies have nearby bases, and supplies are easy to get with a little advance planning he said. Toreador’s tripod platforms were built in Turkey under Momentum’s supervision, and local workboats handled the installation.

In addition, Turkish companies contributed a high degree of local content on most of the operations, onshore and offshore.

All in all, Toreador found a profitable play in a hospitable atmosphere and likes its decision.

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