2010 Annual Report - TPAO

TURKISH PETROLEUM CORPORATION
2010 Annual Report

TURKISH PETROLEUM CORPORATION
TPAO 2010
1

2 TPAO 2010
Our Nation's high capability and commonsense have been our guide and
source of success in strenuous duties we involved in.
M. Kemal ATATÜRK
TPAO 2010
3

4 TPAO 2010
CONTENTS
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06
08
10
12
14
16
18
26
34
42
46
48
50
52
58
highlights
about us
organization chart
message from the president
board of directors
general management
company profile
domestic exploration and production activities
international exploration and production activities
technology and services
research center
occupational safety and environmental protection
human resources
district managements
subsidiaries and associated company
finance
HIGHLIGHTS
•
•
•
•
•
•
•
•
Throughout 2010, 3 deep water drillings, Sinop-1,
Yassıhöyük-1 and Sürmene-1, were successfully
realized in Black Sea with "Leiv Eiriksson", one of the
biggest exploration platforms of the world.
Oil discovery was realized in 7 wells out 11 wells
drilled by TPAO in Libya.
TPAO signed technical service contracts for the
“Missan and Badra Oil Fields” in Iraq.
TPAO won the bid for Mansuriya Gas Field as an
operator and Siba Gas Field as a partner in Iraq’s
third bidding round in 2010.
In Western Black Sea Development Project, within the
scope of Phase-II in TPAO's operatorship, Akçakoca
Platform was engaged and production activities were
initiated.
In order to maintain oil and natural gas production
from “Unconventional Reservoirs”, TPAO and
TRANSATLANTIC signed a “Memorandum of
Understanding (MOU)” on April 9th, 2010.
TPAO added a new 1,500 HP drilling rig (NOV-1500)
to its rig fleet.
By 2010, TPpd, the 8th biggest distribution company
in the market, continues to increase its market share
in Türkiye.
TPAO 2010
5

ABOUT US
who we are?
TPAO was founded in 1954 by Law No. 6327 with the responsibility of being
involved in hydrocarbon exploration, drilling, production, refinery and marketing
activities as Türkiye’s sole national oil company. Until 1983, as an integrated
oil company, it was engaged in all activity fields of oil industry from exploration
to transportation.
what we do?
TPAO has four different core activities in the oil sector.
• Exploration, Drilling, Production and Well Completion
• Natural Gas Storage
• Participation to Pipeline Projects
• Oil Products Trade and Distribution (TPIC)
where we operate?
TPAO was structured as having its headquarters in Ankara and also 3 District
Managements in Batman, Thrace and Adıyaman with approximately 5,000
employees throughout Türkiye and its branch offices abroad. To ensure energy
supply security of the country, TPAO conducts its international activities
especially in Caspian Region, North Africa and Middle East. In this context,
TPAO carries out its exploration and production activities actively in Azerbaijan,
Kazakhstan, Libya and Iraq. TPAO has been continuing to search and negotiate
for business opportunities in other hydrocarbon rich regions such as Syria,
Turkmenistan, Iran, Ukraine, Russia, Brasil, Colombia, Algeria, Egypt, Sudan
and Venezuela.
With “to become a regionally effective world-class energy company meeting Türkiye’s oil
and natural gas demand and to be the most desired company to work with” vision and
with “to bring out oil and natural gas potential of Türkiye and provide them for the use of
Turkish economy, to supply new sources of income via international activities and play
an effective role in the energy sector, by also actively participating in Türkiye’s process
of being an Energy Corridor” mission,
TPAO’s employees, temporizing world conjucture and fulfilling the duties in the
globalization process are hand to hand to shape the future of our country with their
institution culture, knowledge and experiences.
Roadmap
Focusing on productivity, integration, staff development, sensitiveness to the
society and environment, TPAO's 2010-2014 roadmap is;
l To increase the regional and global efficiency,
l To increase our domestic crude oil and natural gas reserves production,
l To increase the current natural gas storage and capacity,
l To increase high performance staff culture.
6 TPAO 2010 TPAO 2010 7

Chairman and President
Mehmet UYSAL
Member of the Board
Yusuf YAZAR
Department of Exploration
Ömer ŞAHİNTÜRK
Auditing Committee
Ahmet ASLAN
Legal Advisory
Davut İYRAS
ORGANIZATION CHART
Vice President
Murat ALTIPARMAK
Secretariat to the President
Advisor to the President
Batman District Management
Süleyman ÇALIK
Department of Drilling
Hüseyin ÇİLOĞLU
Bureau of the Board of Directors
Department of Human Resources
Yahya PEKTAŞ
Member of the Board
İsmet SALİHOĞLU
Vice President
Besim ŞİŞMAN
Trakya District Management
Murat HACIHALİLOĞLU
Department of International Projects
Tayfun Yener UMUCU
Offices
Department of Well Completion
Serdal AZARSIZ
Member of the Board
Cumali KINACI
Vice President
Ahmet ADANIR
Department of Machinery
Supply&Construction
Recai GÜNGÖR
Department of Occupational
Safety&Env. Protection
Yusuf AHÇI
Department of Production
Ali TİREK
Member of the Board
Murat ALTIPARMAK
Adıyaman District Management
Halil Murat DEMİR
Department of Research Center
Ömer ŞAHİNTÜRK (A.)
Board of Searching and Development
Member of the Board
Besim ŞİŞMAN
Department of Planning & Coordination
Erdal COŞKUN
Department of Finance
Fikri NAYIR
Department of Information Technologies
Levent ÖZKABAN
Department of Strategies
Memet Ali KAYA
8 TPAO 2010 TPAO 2010 9
Vice President
Yurdal ÖZTAŞ
Vice President
Hakan BİLİR

10 TPAO 2010
Our main target as Turkish Petroleum is to be able to produce the whole oil and
natural gas demand of our country in the Hundreth Year of The Establishment of
Republic of Türkiye. Our happiness will correspondingly grow as much as we reach
to this target in our domestic and international activities. Resetting our 50 billion
USD average annual energy import expense, by decreasing it rapidly in the following
years will be a significant step towards the target of Türkiye’s being in the top ten
economies.
The importance of the studies maintained by
Turkish Petroleum for Türkiye, increases everyday.
Long term energy supply plans which are main
subjects of countries’ strategic plans reveal Turkish
Petroleum’s importance for Turkiye itself. Today, a
process is ongoing in which crucial developments
occur related with energy world including civil
commotion in North Africa and Middle East. In this
process, developed countries started to give new
directions to energy politics and to determine new
strategies.
However, I would like to say that the most significant
development for the past 3 years is not political
but technical one. This development proved that
oil and natural gas production may be increased
by unconventional methods. Especially, it is
remarkable that United States has met its natural
gas demand for 200 years by this way. The last
century was defined as “The Gold Century of Oil”
whereas, it is expected that the next century will be
“The Gold Century of Natural Gas” because of the
great amount of natural gas reserves.
The other significant development is; everyone,
including the major producers, has accepted the
reality that oil and natural gas resources are limited
and they renewed their strategies in this respect.
Within this context, while all of the international
major oil companies are restructuring themselves
as “Energy Company”, national oil companies are
turning into “National-International Oil Company”.
They will surely turn into “Energy Company” later
on.
The cost of oil and gas imports of our country
will be around 600 billion USD for the next 10
years and that makes us to maintain our national
and international exploration and production
activities increasingly without any halt.
Turkish Petroleum initiated an outstanding
investment boom by intensifying its activities on
unexplored areas lately, especially in offshore. Our
domestic investments reached to 823 million USD
in 2011 while it was 50 million USD in the early
2000’s.
While making these sizable investments, our
Corporation continues its contribution to Turkish
economy. In 2010 TPAO earned 1.87 billion TL
income and made 1.3 billion TL pre-tax profit and
with its legal obligations+dividend payments,
TPAO’s contribution to Turkish economy becomes
1.06 billion TL.
Turkish Petroleum has been conducting studies
that will emerge new oil sources of our country with
its investment booms in the last 10 years. “Ultra
Deep Water” drillings of Sinop-1, Yassıhöyük-1 and
Sürmene-1, realized with one of the biggest platforms
of the world “Leiv Eiriksson”, are crucial steps for
TPAO. By being drilling operator of Yassıhöyük-1
well, Turkish Petroleum becomes one of the 12
major companies in the world that can handle this
operation in ultra deep waters.
Our short term target is to test the hydrocarbon
potential of Black Sea and to provide it for the use
of Turkish economy. After the first drilling boom with
three wells initiated with “Leiv Eiriksson”, the second
drilling boom is planned for “ultra deep water” drillings
of 4 wells. This plan is on the way with “Deep Water
Champion”s coming, a drill ship constructed and
supplied with the latest technological innovations.
We are excited and aware of that, the successful
results that may be obtained from the drillings
in our seas will carry Turkish Petroleum and
Türkiye to “2023 targets”.
Moreover, I want you to know we have obtained very
hopeful results from our Mediterranean offshore
investments. With these activities, we have planned
to drill a well in İskenederun Bay in the midst of 2012
and the first “ultra deep water” well in Antalya in the
midst of 2013.
Double-deck Akçakoca Platform that has 2.1
million m 3 producing capacity daily, was engaged
in Western Black Sea. While 360,000 m 3 natural
gas can be produced from the production deck,
development activities that will increase natural
gas production and new production wells' drillings,
continue simultaneously on drilling deck.
New joint studies were initiated with experienced
foreign partners in order to produce oil and natural
gas with unconventional methods like shale gas and
shale oil in Thrace Basin and Southeastern Anatolia.
I believed that production by these methods will
contribute to meet the hyrdocarbon demand of our
country in long term.
The capacity of Kuzey Marmara and Değirmenköy
Underground Natural Gas Storage Facilities, a
“first” for our country engaged in 2007, has been
increased from 1.6 billion m 3 to 2.66 billion m 3 in
2010. Studies of increasing the storage capacity to
2.84 billion m 3 and daily reproduction capacity to 50
million are ongoing for the next term.
Today, international investments and operations
initiated in 1990’s, continue in Caspian Region,
Middle East, North Africa and South America.
Turkish Petroleum is conducting its activities in
important projects like Azeri-Chirag-Guneshli
(ACG), Shah Deniz (SD), Alov, Baku-Tbilisi-Ceyhan
(BTC) and South Caucasus (SCP) in which major
oil companies are partners and also conducting its
joint activities in Kazakhstan through a joint venture
company, KazakhTurkMunai (KTM).
Turkish Petroleum, the first foreign oil company
who established an office in Iraq Bagdad, joined
the Missan and Badra Oil Fields together with
Siba and Mansuriya Gas Fields Projects via
consortiums. The operator of the Mansuriya Gas
Fields is going to be Turkish Petroleum.
The oil discovery realized in the first well drilled in
Libya Murzuq Basin under 147/3-4 licence in 2009
was one of the important oil discoveries realized in
Libya in recent years. 7 out of 11 wells drilled under
this licence whoose oil potential is high, resulted in
oil discovery. With the outbreak of intricacies, Turkish
employees were safely and swiftly brought back to
Türkiye and our office activities are still going on
with Libyan local employees in Tripoli. We hope to
re-initiate our production activities to develope these
discoveries in Libya after the assurance of stability
within the shortest time.
All these activities I mentioned above are being
achieved with Turkish Petroleum’s employees’
willingness and self-sacrificing efforts. It is
praiseworthy that our employees are conducting
tough and important projects successfully in
international fierce comptetition environment. I
express my gratitude to all of our employees for
their efforts and services.
Our main target as Turkish Petroleum is to be
able to produce the whole oil and natural gas
demand of our country in the Hundreth Year of
The Establishment of Republic of Türkiye. Our
happiness will correspondingly grow as much
as we reach to this target in our domestic and
international activities. Resetting our 50 billion
USD average annual energy import expense,
by decreasing it rapidly in the following years
will be a significant step towards the target of
Türkiye’s being in the top ten economies.
In order for Türkiye and Turkish Petroleum to
reach their main targets, the time has come
that Turkish Petroleum should be restructured
as an effective oil company that can challange
with international oil companies. I think this
restructure is really important, will be the most
important step for Türkiye to reach its main
targets.
Mehmet UYSAL
Chairman and President
TPAO 2010
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BOARD OF DIRECTORS
1 2 3 4 5 6
Cumali KINACI
Member of the Board
Yusuf YAZAR
Member of the Board
Mehmet UYSAL
Chairman and President
İsmet SALİHOĞLU
Member of the Board
Murat ALTIPARMAK
Member of the Board
and Vice President
Besim ŞİŞMAN
Member of the Board
and Vice President
12 TPAO 2010 TPAO 2010 13
1 2345
6

Mehmet UYSAL
Chairman and President
GENERAL MANAGEMENT
Murat ALTIPARMAK
Member of the Board
and Vice President
Besim ŞİŞMAN
Member of the Board
and Vice President
Ahmet ADANIR
Vice President
Yurdal ÖZTAŞ
Vice President
Hakan BİLİR
Vice President
14 TPAO 2010 TPAO 2010
15

Sales Revenues (million USD)
Net Profit (million USD)
Total Current Assets (million USD)
Total Fixed Assets (million USD)
Shareholders Equity (million USD)
COMPANY PROFILE
Short-term Foreign Liabilities (million USD)
Long-term Foreign Liabilities (million USD)
Current Ratio
Cash Ratio
Financial Leverage Ratio
3,500
3,000
2,500
2,000
1,500
1,000
500
Total Sales Revenue
Million USD
Net Profit Current Ratio
2010 2009
2,851
1,353
2,793
4,214
5,341
1,015
0 0 0 0
2007
2008
2009
2010
2,000
1,500
1,000
500
2007
2008
2009
2010
652
2.75
1.97
0.24
5 5
4 4
3 3
2 2
1 1
2007
2008
2009
2010
2,026
389
2,090
4,073
4,925
481
757
4.35
3.15
0.20
Cash Ratio
2007
2008
2009
2010
Geological Activities (km 2 )
Seismic Activities
Drilling Activities
Production Activities
Drilling of 3 deep water wells in deep waters
of Black Sea provides us to break the record
of drilling depth that hadn't been broken for
a long time. Total amount of offshore seismic
surveys in our seas realized in the last 7 years
is much more than seismic surveys performed
during TPAO's 57 years history.
Domestic Seismic Activities
16 TPAO 2010 TPAO 2010 17
2D
3D
Onshore (km)
Offshore (km)
Onshore (km 2 )
Offshore (km 2 )
Onshore (thousand m)
Offshore (thousand m)
Domestic (million barrel pe)
International (million barrel pe)
km
25,000
20,000
15,000
10,000
5,000
0
2006
2010 2009
5,566
5,880
936
-
1,315
562
167.0
14.0
14.2
11.1
2007
2008
816
9,747
790
4,040
154.3
3.9
14.0
11.0
2009
2010
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
km 2
2D
3D

DOMESTIC EXPLORATION
AND PRODUCTION ACTIVITIES
As Turkish Petroleum Corporation,
we have increasingly expanded
our exploration activities in the last
decade. In 2010, the deep water
drillings of Sinop-1, Yassıhöyük-1
and Sürmene-1 realized with “Leiv
Eiriksson”, one of the biggest
exploration platforms of the
world, are extremely enlightening
for TPAO.
Our short term goal, in the light of
data obtained from 3 wells drilled,
is to reveal hydrocarbon potential
in the deep waters of Black Sea
and contribute it to the use of
Turkish economy. We are excited
and aware of that, this aim of our
company can open bright and
achievable horizons.
In accordance with our company’s vision, mission
and strategies, exploration and production
activities carried out in 2010 have intensively
covered offshore fields as well as the Thrace,
Middle Anatolia Basins, Eastern Anatolia,
Southeastern Anatolia Regions.
Nowadays, TPAO which sets target for meeting
Türkiye’s continuously increasing oil and natural
gas demand from own resources, also views
and adopts itself with the integration process of
international oil companies and carries out its
studies for the establishment of a competitive,
secure, transparent and balanced market
conditions for all oil companies engaging in oil
and gas exploration business in Türkiye’s oil
market.
In recent years, TPAO having set its vision
and mission for meeting Türkiye’s continuously
increasing oil and natural gas demand through
domestic and international exploration and
production means, has made a boom in
its domestic investments by setting its new
exploration strategy by extending its activities
in unexplored basins of Türkiye and especially
offshore.
Especially, following Ayazlı gas discovery in
the Western Black Sea, new explorations,
establishment processes, well drilling programs
were carried out and additional drilling operations
were performed on offshore Akçakoca. In
addition to this, 2D and 3D seismic surveys were
realized to reveal the hydrocarbon potential of
onshore fields lying along the territorial waters of
the Black Sea.
Designations of hopeful structures as a result
of exploration studies have great importance
for TPAO’s future exploration objectives. To
reveal hydrocarbon potential of the region,
share investment risk and transfer of the latest
exploration technologies, TPAO continued its
studies in 2010 to establish joint ventures with
foreign oil companies.
We Are Exploring All Offshore Fields of Türkiye
In 2010, 562 km 2 of 3D offshore seismic surveys
were realized in offshore Mediterranean Sea.
With the evaluation of acquired geophysical
data, it is planned to intensify drilling activities
on offshore fields in the forthcoming years. With
these studies, it has been targeted to give a
further fillip to the country’s economy by new oil
and natural gas discoveries.
Total amount of offshore seismic surveys realized
in the last seven years is much more than the
seismic surveys performed during TPAO’s 57
years long history. This situation confirms the
importance attached to offshore hydrocarbon
explorations in recent years.
Throughout 2010, interpretation studies of
seismic datas that were acquired in previous
years from the Black Sea, Antalya, Mersin and
İskenderun Bays have continued. Farm-out
negotiations with oil companies about mentioned
fields have continued throughout the year. It is
planned to start exploration activities with drilling
in the Mediterranean sea (offshore) in 2012.
3 Deep Water Drillings in Black Sea
The exploration-drilling activities in our seas,
with its peak level of TPAO history, are ongoing
with full pace. TPAO realized 3 deep water
drillings; Sürmene-1 well drilling through its own
means, Sinop-1 well drilling with PETROBRAS-
EXXONMOBIL, Yassıhöyük-1 well with
CHEVRON.
Together with great enthusiasm and expectations,
TPAO has given priority to realize exploration,
drilling and production investment programs also
at onshore fields.
In 2010, TPAO evaluated geological field survey
with 5,566 km 2 at the Thrace, Marmara, Aegean,
Black Sea, Mediterranean, Central, Eastern and
Southeastern Anatolia Regions and realized 936
km 2D, 1,315 km 2 3D seismic data acquisition
studies.
Drilling Activities
In 2010, TPAO realized most of its drilling
activities at Southeastern Anatolia, Thrace
Regions and Black Sea offshore fields.
Although drilling of 92 wells were planned in
2010, drilling activities were realized in 103 wells
due to good results and achievements obtained
and the drilling of 92 of them was completed.
TPAO accelerated its oil and natural gas
exploration and drilling activities 2 folds at
onshore and offshore fields in the last 5 years.
In addition to the explored basins, TPAO has
continued its exploration and drilling activities
at the unexplored basins such as Syria and
Iraq border, Mardin, Ankara, Niğde, Gaziantep,
Trabzon, Zonguldak etc. and acquired significant
data to determine hydrocarbon potential of these
fields.
Oil and Gas Wells
Güzeldere-4, G.Şelmo-5 and Köseler-2 wells
were drilled in X. Concession Region, completed
as “oil wells”.
D.Çemberlitaş-2, 3, G.sarık-2, Karacan-4, 5, 6,
Beyazçeşme-3, Sivritepe-101, G.Kırtepe-7R, 8
(jointly by NVT PERENCO) wells were drilled
in XI. Concession Region, completed as “oil
wells”.
18 TPAO 2010 TPAO 2010
19

Elbeyli-2, 3, 4, 6, Gökçe-3, D.Karakuş-8,
K.Akçeli-2, B.Sarısöğüt-1, K.Eskitaş-1,
B.Gökçe-6 and D.Lilan-1 wells were drilled in XII.
Concession Region, completed as “oil wells”.
Umurca-O11, Fidanlık-4, 5, Kavakdere-O1,
Pelit-1, 2 (jointly by TPAO-AMITY OIL) wells
were drilled in I. Concession Region in Thrace
Oil Region and completed as “gas wells”. Also,
Vakıflar-O8 well was drilled and completed as
“oil and gas well”.
Joint Domestic Exploration, Development
and Production Activities
Onshore
TPAO-TIWAY OIL
Within the framework of TPAO-TIWAY OIL
partnership under “The Exploration and
Development Agreement”, drilling and production
activities in Adıyaman Cendere Field have been
carried out throughout the year.
TPAO-NVT PERENCO
Within the framework of TPAO-NVT PERENCO
“Joint Venture Agreement”, production from
Kastel, Karaali and Yalankoz fields has been
ongoing throughout the year. As planned the
previous year, the drilling of G.Kırtepe-7 and
G.Kırtepe-8 wells were realized under TPAO’s
operatorship in 2010. In the light of geological and
geophysical activities conducted in the region,
the drilling of B.Gercüş-B1 well was completed
under the NVT PERENCO operatorship in
2010.
TPAO-AMITY OIL
Under the Thrace Basin “Joint Operating
Agreement” with AMITY OIL, natural gas and
condensate production from Göçerler, Adatepe,
D.Adatepe, Velimeşe, B.Velimeşe, Reisdere,
Eskitaşlı and Dikilitaş fields have continued
throughout the year. Drilling of D.Beyciler-H1 well
was realized under TPAO’s operatorship in 2010
and gas discoveries realized in Pelit-1 and Pelit-2
wells drilled with the AMITY OIL partnership. In
the scope of 2010 Work Program and Budget, it
was planned to conduct 4D seismic study.
In mid 2010, the sale of AMITY OIL to
TRANSATLANTIC Petroleum company was
realized.
TPAO-TRANSATLANTIC
Within the scope of unconventional studies
to be conducted at the Thrace Basin and
Southeastern Anatolian licences, a Memorandum
of Understanding (MOU) was executed by and
between TPAO and TRANSATLANTIC on April
9 th , 2010.
In the regard of this agreement, re-entry
operations are conducted in Kaynarca-1 well
at first in Thrace Basin and then re-entry and
hydrofrac operations realized in Kepirtepe-1
well.
Offshore
TPAO-PETROL OFİSİ E&P-TIWAY
OIL- FOINAVON
Under the ongoing “The Black Sea Joint
Operating Agreement”, natural gas production
from Ayazlı, D. Ayazlı and Akkaya Production
Platforms has continued throughout the year.
The manufacturing of Akçakoca Production
Platform has been completed and it was installed
at its location in summer 2010 and was put into
production in the first quarter of 2011.
The completion and tie-back operations of
Akçakoca-3 and Akçakoca-4 were initiated after
the rig GSP-31 was installed on the platform. The
sale of Stratic Energy Corp. to Foinavon Energy
Inc. was realized and the partnership was then
among TPAO-PETROL OFİSİ E&P-TIWAY OIL
and FOINAVON.
TPAO-PETROBRAS- EXXONMOBIL
Joint Activities were realized by TPAO-
PETROBRAS-EXXONMOBIL under the
Rig Farmout Agreement (RFOA) signed
by and between TPAO and PETROBRAS,
after PETROBRAS’ transferring its 50%
share to EXXONMOBIL in January 2010.
Between February and August 2010, the
drilling of Sinop-1 well was realized under
the operatorship of PETROBRAS. TPAO has
formed a mobile laboratory that would conduct
some paleontological studies for the partnership
in Samsun.
Within the scope of “Joint Operating Agreement”
between TPAO and EXXONMOBIL, CSEM
studies were conducted in the first quarter of
2010, source controlled “aeromagnetic” data
acquisition studies (CSEM) were carried out in
the first quarter of 2011 in order to better identify
the prospects. The location is determined by
conducting survey studies about the location
of the well that is planned to be drilled in the
operatorship of EXXONMOBIL in April, 2011.
The drilling ship named “Deep Water Champion”
is expected to arrive to the location in the second
quarter of 2011.
20 TPAO 2010 TPAO 2010 21

22 TPAO 2010
TPAO-CHEVRON
In the results of the farm-out studies conducted
in Black Sea at licence 3921 since 2009, TPAO
and CHEVRON (50% - 50%) started negotiations
in order to form a “Joint Operating Agreement”
which would cover the drilling of 2 deep-water
exploration wells in the Black Sea. The Black
Sea JOA became effective on September
16 th , 2010 and Parties immediately started the
joint technical studies during which the drilling
operations of Yassıhöyük-1 well were also
initiated. The well was completed as “dry well
with gas show” under TPAO’s operatorship in
November 2010 and Parties decided to continue
joint studies in the light of Yassihöyük-1 well.
Western Black Sea Exploration, Production
and Development Project
TPAO and project partners POAŞ, FOINAVON
(STRATIC) and TIWAY OIL continued their
natural gas production activities as well as drilling
activities continued on Akçakoca Field.
Within the context of Phase I, natural gas
production was carried out from 3 sea production
platforms out of 7 production wells. At the end of
2010, approximately 470 million sm 3 of natural
gas were produced. In the scope of studies
about engaging Akçakoca field, installation
process of the platform (constructed in Costanta
- Romaina) in the main pipeline was completed
in September, 2010.
In the scope of Phase-II in which TPAO is the
operator, test production from Akçakoca-3
and Akçakoca-4 initiated after the connection
and system function tests were conducted at
Akçakoca platform in March 13 th , 2011. The
drilling activities of G.Akçakoca-1 well which
started in the first quarter of 2011, is continuing.
The drilling/production operations, being realized
simultaneously in the sea, have been never done
before in our country and 360.000 sm 3 natural
gas is being produced daily from platform by
2011.
Domestic Crude Oil Production
In 2010, TPAO produced 12.7 million barrels of
crude oil from its fields, which constituted 73% of
the total crude oil production of Türkiye. 71% of
the total oil production is from Batman Region,
28% is from Adıyaman Region and 1% is from
Thrace Region.
The total number of production wells reached
to 1,136 by the end of 2010 with the addition
of 52 new and and 15 re-completed wells and
abandonment of 16 wells.
Serious amount of water was produced from our
oil fields as well as oil. In 2010, 107 million barrels
of water produced with oil was injected into safe
zones in different fields by 92 water injection
wells. Within its policy of keeping the production
TPAO 2010
23

at the maximum level, TPAO has continued its
domestic reserve development and production
activities in 2010. Production problems in heavy
reservoir require special technical applications.
To prevent the decline in production and to
evaluate the current production potential, several
reservoir studies were performed.
Batı Raman Field Enhanced Oil
Recovery Project
Since the carbon dioxide (CO 2) injection start-up
in 1986 in B.Raman, cumulative injection into the
field has reached 9.6 billion m 3 in the scope of
Batı Raman Field Enhanced Oil Project. In order
to sustain this amount of injection, 7.2 billion m 3
CO 2 was produced from Dodan Field. By the end
of 2010, Batı Raman's recovered cumulative oil
reserves were 103.8 million barrels, 67.9 million
barrels of which is the additional oil coming from
CO 2 injection.
In 2010, 421.9 million m 3 CO 2 was injected,
286.2 million m 3 of this amount was re-produced
and 262 million m 3 of this produced gas was reinjected
into the reservoir to be re-utilized.
Water injection aimed improving CO 2 sweep
efficiency continued in 2010, in total 235,758
barrels of water alternating with gas was injected
into 13 different wells. NaOH augmented water
injection was begun from 2 injectors in order
to see the effect of chemicals to increase the
efficiency of Water Alternating Gas (WAG)
application. 77 thousand barrels of chemically
enriched water was injected. In addition to this,
drilling operations of 18 new vertical wells were
completed.
Raman Field Production
Enhancement Project
Raman Field production enhancement project
was started in 1994 and operations to increase oil
production have been continuing periodically by
the end of 2010. 16.2 million barrels of additional
oil was produced by means of this project. 1
new well was drilled in the field to increase oil
production in 2010 and well number increased
to 241.
As results of pilot polymer gel injection (MARCIT)
done in 7 wells to reduce water-cut values in
2007 that were satisfying, gel injection operations
were done in 57 wells throughout the year.
Approximately 515 thousand barrels of extra oil
production was obtained from these 57 wells.
Gross production rates of 22 wells were
changed in 2010. 3 abandoned wells were put
into production after gel operation. As a result,
approximately 25 thousand barrels of additional
oil were produced by these operations in 2010.
Garzan Water Injection Project
Garzan Field, which has 300 million barrels oil in
place, is one of the biggest oil fields in Türkiye.
Within the scheme of Garzan Water Injection
Project, started in 1960 and restarted in 1992
after a long halt since 1983, cumulative injection
through 11 wells reached to 68 million barrels in
Garzan-B field by the end of 2010, where annual
injection was 1.5 million barrels.
In Garzan-C field, cumulative water injection
through 4 wells reached to 46.7 million barrels
where total annual injection was 700 thousand
barrels.
Within the scope of Garzan Water Injection
Project, 28.7 million barrels of additional oil
in Garzan-B Field and 13.1 million barrels in
Garzan-C Field were produced by the end of
2010.
Batı Kozluca Field Water Alternating Gas
Injection (WAG) Project
CO 2/WAG feasibility in Batı Kozluca Field
was investigated through a reservoir study
and promising results led investments for the
application. CO2 injection and water injection
have continued in 2010.
By the end of 2010, cumulative gas injection
reached to 5.86 billion scf and cumulative water
injection reached to 800 thousand barrels. The
injection process is still underway. In order to
expand the application of CO2 injection, additional
12 wells were drilled at the B.Kozluca Field.
Domestic Natural Gas Production
In 2010, TPAO’s natural gas production was
260.7 million sm 3 . 94% of the total natural gas
production is from Thrace Region, 5% is from
Batman Region and 1% is from Adıyaman
Region. The oil equivalent of the gas output is
1.5 million barrels. Thus, TPAO’s cumulative
hydrocarbon production reached to 14.2 million
barrels by the end of 2010.
Kuzey Marmara and Değirmenköy Fields
Underground Natural Gas Storage Facilities
Capacity Enhancemend Project
In Kuzey Marmara and Değirmenköy Fields
Underground Natural Gas Storage Project,
commercial activity was started on April 13 th ,
2007. Injection and withdrawal operations have
been continuing.
Gas demand of our country tends to increase,
therefore new storage facilities are urgently
required.
For this purpose, TPAO is planning to increase
the daily withdrawal capacity of existing facilities
up to 50 million sm 3 /day and storage capacity to
approximately 3 billion sm 3 within 3 phases by
the end of 2016.
24 TPAO 2010 TPAO 2010
25

26 TPAO 2010
INTERNATIONAL EXPLORATION
AND PRODUCTION ACTIVITIES
TPAO’s primary business
development areas for the short
term are determined as Middle
East, North Africa and Caspian
Region, which hold two-third of
the world proven oil reserves.
International activities have made TPAO an
important actor in the region since the early
1990’s. Most of the international production is
from Azeri-Chirag-Guneshli Project located in
offshore Azerbaijan. BTC Crude Oil Pipeline has
started operations in 2006. Thus, production
from Azerbaijan projects is expected to increase
and reach peak levels in the coming years.
After completing in 2006 winter and putting
SCP Gas Pipeline into operation, TPAO, as a
shareholder of Shah Deniz Project, started first
international natural gas production in March
2007.
With this production, TPAO started to meet a
part of Türkiye’s domestic gas demand from
abroad since July 2007. In addition to Azerbaijan
projects, TPAO’s production has been continuing
from Kazakhstan fields.
Within the scope of Libya exploration projects,
a new oil discovery in the first exploration well
drilled in license area 147/3-4 in Murzuq basin
was realized in 2009, which was a significant step
towards the first oil production in Libya. In 2010,
10 structures were tested with 10 wells. 7 out of
11 wells drilled in the basin were completed as
oil well. Libya NOC made the official discovery
announcement over 6 structures tested. The
exploration period which ended on December
10 th , 2010 was extended to June 10 th , 2012 by
NOC.
TPAO will exploit its reserves in the regional
geography and focus on certain countries,
priorities of which were determined as a result of
global survey conducted throughout the recent
years, and gives more importance to increase
its reserves. Because of the necessity of adding
new reserves and turning these reserves into
production immediately to achieve its strategic
targets, international activities become gradually
more important. Being aware of the strategic
importance of energy for ensuring Türkiye’s
security of supply, TPAO has set up the roadmaps
and action plans for achieving its objectives in
the years ahead.
Caspian Region
It is estimated that, Caspian Region holds 4%
of the world oil reserves and 6% of the gas
reserves. Because of the cultural and historical
ties, Caspian Region has a special importance
and value for Türkiye. As a result of having
the significant role in transportation of energy
resources to western markets and becoming an
energy hub and settling stability in the Region,
Türkiye will increase its strategic and geopolitical
power in the area.
Kazakhstan
TPAO conducts its activities in Kazakhstan through
a joint venture company, KazakhTurkMunai
(KTM) Ltd. in which TPAO holds a 49% share
and KazMunaiGas has 51%. KTM Ltd. has one
concession licence in Aktau Region and two in
Aktubinsk Region of the Western Kazakhstan.
Exploration and production activities are ongoing
in 7 fields in these three licences.
In 2010, average production of KTM Ltd. was
1,760 barrels/day in Aktau Region and 2,910
barrels/day in Aktubinsk Region with a total
average of 4,670 barrels/day.
Since 1993, TPAO has been carrying out its
activities in Kazakhstan and intends to grow its
portfolio in this country, which is in the focus of
interest with its high oil reserves.
By the end of 2010, yearly crude oil production
is 1.71 million barrels, cumulative crude oil
production is 25.07 million barrels and crude oil
reserves are 30.7 million barrels.
Azerbaijan
TPAO is currently a participant of three exploration,
development and production projects which are
Azeri-Chirag-Guneshli (6.75%), Shah Deniz
(9%) and Alov (10%) Projects in Azerbaijan.
Furthermore, TPAO has a share of 6.53% in
the BTC Co. which is carrying out all activities
of Baku-Tbilisi-Ceyhan Main Export Crude Oil
Pipeline Project and 9% share in South Caucasus
Natural Gas Pipeline Project which transports
Shah Deniz gas to Turkish-Georgian border.
Azeri-Chirag-Guneshli (ACG) Project
In 1994, “The Joint Development and Production
Sharing Agreement” for ACG Project was signed
in Baku among the State Oil Company of the
Azerbaijan Republic (SOCAR) and the consortium
constituted by the foreign companies.
Throughout the ACG Project having 5.56 billion
barrels of oil reserves, and producing 1.64
billion barrels of crude oil from the beginning of
the project to the end of 2010. In 2010, with an
average of 825,000 barrels/day, 301.3 million
barrels of oil was produced.
TPAO 2010
27

28 TPAO 2010
ACG Project has been developing in phases.
The production started from Chirag Field (the
early oil project) in November 1997. The Phase-1
(Development of the Central Azeri Field) was put
into production in February 2005. The production
of the Phase-2 (Development of the West and
East Azeri Fields) were commenced in January
2006 (West Azeri) and in October 2006 (East
Azeri).
The production of Phase-3 (Development of
Deep Water Guneshli Field) was started up in
April 2008. In 2010, the engineering and design
studies of Chirag Oil Project (COP) which aims
to produce oil from undepleted area between
the existing platforms in Chirag and Deep Water
Guneshli were completed and Field Development
and Construction Decision was approved in
March 2010.
Shah Deniz Project
The Shah Deniz Structure is located in the
offshore South Caspian Sea, 70 km southeast of
Baku and 70 km southwest of the Azeri- Chirag-
Guneshli Field. The concession has an areal
coverage of approximately 860 km 2 .
In 2001, the Minimum Obligatory Work Program
of the Exploration and the Extended Exploration
Periods were completed and commerciality was
declared.
The Sales and Purchasing Agreement (SPA)
between BOTAŞ and SOCAR within the scope
of Phase-1 for the natural gas discovered in the
Project which had 625 billion m 3 natural gas
and 750 million barrel condensate reserves and
Intergovernmental Agreement between Türkiye-
Georgia and Türkiye-Azerbaijan were signed.
According to the SPA, 6.6 billion m 3 of natural
gas will be delivered to Türkiye for 15 years.
Project also supplies gas to Azerbaijan, Georgia
and to BTC as fuel. Within the scope of Phase-1,
total sale is estimated to be 8.6 billion m 3 / year
during the plato period.
With the Shah Deniz Phase-1 Field Development
and Construction Decision, construction period
started in 2003 and commercial production
was started on March 7 th , 2007 and is currently
continuing.
In 2010, 6.9 billion m 3 natural gas and 14.7
million barrels of condensate were produced
and by the end of 2010, cumulative production
reached to 23.6 billion m 3 natural gas and 49.8
million barrels of condensate.
For Phase-2, it is estimated that construction
decision will be taken in 2013 and first gas
delivery will be realized in 2017.
Alov Project
Alov Exploration Project covers three different
prospective structures named Araz-Alov-Sharg
in the Middle of the Southern Caspian Sea,
having estimated reserves of 385 billion m 3 of
natural gas and 5 billion barrels of oil.
TPAO joined the Project after signing EDPSA,
by an “Agreement on Participating Interest to be
Vested” on July 29 th , 1998. For the Alov Project,
the minimum contractual commitments are
1,400 km 2 3D seismic survey and drilling of three
exploration wells for the three-year exploration
period. Seismic acquisition and interpretation
works have been completed, and drilling of first
exploration well is waiting for the determination
of legal status of Caspian Sea.
Pipeline Projects of TPAO Contributing to the
Energy Corridor
In Türkiye, which resides at the intersection
of Middle East and Caspian Regions having
the major portion of the world oil reserves, the
basis of the energy corridor to carry the energy
resources to the world market was initiated by
the constructions of BTC and SCP Pipeline
Projects.
Following the determination of the hydrocarbon
potential of The Black Sea, if the expectation
of creating a triangular source area is realized,
this source will flow through the Anatolian axis to
reach the market in due time with confidence.
Being aware of its responsibility in this axis, TPAO
has been endeavoring to meet the national oil
and gas demand and will continue to increase
its effectiveness and control oriented activities
throughout East-West Energy Corridor.
Baku-Tbilisi-Ceyhan Main Export Crude Oil
Pipeline (BTC) Project
The transportation of oil produced in Caspian
Region, especially from ACG Project in Azerbaijan
to the world markets, in a safe, secure, reliable
and environmentally friendly way is continuing
through the BTC Project which is the first step of
East-West Energy Corridor.
Within the scope of the Project, an approximately
1,768 km long pipeline, with a nominal capacity
of 50 million tons/year, starting from Sangachal
Terminal close to Baku-Azerbaijan passing by
Tbilisi-Georgia and reaching to the Mediterranean
Sea at Ceyhan-Türkiye, has been constructed.
The physical construction, production, installation
and all tests of required facilities, started in April
2003 in all three countries, were completed.
current projects
new ventures
TPAO 2010
29

The first tanker carrying Azeri oil started its
voyage to world markets on June 3 th , 2006. The
inauguration of the BTC Pipeline was realized
on July 13 th , 2006 at Ceyhan Terminal. Current
transport capacity of the pipeline reached to 1.2
million barrels per day using a chemical in order
to reduce drag forces.
Currently, transportation of a large portion of
ACG oil, all of Shah Deniz condensate and some
Kazakh Tengiz and Turkmenian oil is continuing
and 287 million barrels of oil was loaded to 366
tankers from Haydar Aliyev Terminal in 2010.
Cumulatively, 1.088 million barrels of Azeri and
Kazakh Oil have been transported through BTC
Pipeline to the world markets with 1,387 tankers
by the end of 2010.
After commencement of the construction of the
pipeline physically in 2004, construction activities
have been completed. In parallel with the
production activities of Shah Deniz, continuous
gas transportation was started on March 7 th ,
2007.
The pipeline having an investment cost of 1.4
billion USD, is transporting natural gas through
Azerbaijan, Georgia, Türkiye and BTC’s pump
stations in Azerbaijan and Georgia.
The pipeline has a transportation capacity of 9
billion m 3 of natural gas to Turkish border with
one compressor station in Sangachal Terminal
in line with the terms of AGSC-BOTAŞ Sales
and Purchasing Agreement (SPA). However, it is
possible to expand this capacity up to 22 billion
m 3 in a year by adding new compressor stations
and/or looping.
South Caucasus Natural Gas Pipeline
(SCP) Project
Within the scope of SCP Project, Shah Deniz
natural gas is being transported to Georgian- In 2010, totally 6.8 billion m
Turkish border. The SCP passing through the
same corridor with BTC is about 690 km in
length.
30 TPAO 2010 TPAO 2010 31
3 natural gas was
transported and 4.4 billion m3 to transport the gas that will be produced from Block NC188-NC189 Exploration Project
Caspian Region to Europa via Türkiye in the In the scope of Exploration and Production
future.
Sharing Agreement (EPSA) signed between
Turkish Petroleum Overseas Company (TPOC)
North Africa and Middle East Region
and the National Oil Company of Libya (NOC)
on block NC188 in Ghadames Basin and block
Libya
NC189 in Sirte Basin, the commitments of drilling
Turkish Petroleum Overseas Company (TPOC), 5 exploration wells and seismic acquisitions in
of this amount was
a wholly owned subsidiary of TPAO, has carried the block NC189 were completed under TPOC’s
sold to BOTAŞ. The main target of the Project is
out its exploration activities in Libya since 2000 operatorship in 5 years exploration period.
and the drilling operations have continued As a result of evaluation of the well results,
throughout 2010.
block NC188 relinquished and relinquishment
procedure of block 189 still continues.

Block 147/3-4 Exploration Project
EPSA was signed between NOC and TPOC
on December 10 th , 2005. Minimum exploration
commitment for Block 147/3-4 covering an area
of 2,783 km 2 , was the drilling of two exploration
wells and seismic data acquisition during the five
years of exploration period.
573 km 2D and 352 km 2 3D seismic data
acquisition studies were realized in 2007.
First oil discovery was realized by drilling of
A1-147/3 well in 2009. In 2010, 11 exploration
wells have been drilled and oil discovery
announcement was declared for 7 of them. The
exploration period which ended on December
10 th , 2010 was extended to June 10 th , 2012 by
NOC. Our expectations are high for the wells to
be drilled in 2011 following the stabilization of
political conditions in the country.
Iraq
Since 1994, TPAO has been working closely
with the Iraqi Ministry of Oil for exploration,
development and production opportunities in
Iraq.
In addition to TPAO’s success in first and
second licensing rounds organized by the Iraqi
petroleum authority PCLD (Petroleum Contracts
and Licensing Directorate) in 2009 and awards
of Badra and Missan Oil Fields development,
TPAO has offered three bids for the Iraq’s third
licensing round and has been awarded for 20
year term gas development contracts for Siba
Gas Field as a partner and Mansuriya Gas Field
as an operator in Iraq’s third bidding round in
2010.
Badra Oil Field Development Project
In 2009, within the scope of second round, TPAO
was awarded for a contract to develop Badra Oil
Field. The consortium consists of GAZPROM
NEFT (operator/Russia), KOGAS (South
Korea), PETRONAS (Malaysia) and TPAO.
TPAO holds 10% share in the consortium.
The effective date of the signed agreement
was February 18 th , 2010. The preliminary
development plan was completed in 2010 and
the activities in the field were commenced.
Missan Oil Field Development Project
Missan Oil Field is located about 175 km north
of Basrah city and includes Abu Ghirab, Jabal
Fauqi and Buzurgan oil fields. These fields will
be developed by CNOOC (operator, 63.75%),
TPAO (11.25%) and IDC (25%).
The Producing Fields Technical Service
Agreement was signed on May 17 th , 2010. The
effective date of the Agreement was December
20 th , 2010.
Siba Gas Field Development Project
Kuwait Energy and TPAO consortium won the
bid for Siba Gas Field in Iraq’s southern oil hub
of Basra. (KEC as operator wtih 60% share and
TPAO with 40% share). It is estimated that Siba
Gas Fields have 1 tcf gas reserve on place.
Capital expenses and operating expenses for
the development of the field approximately are
estimated as 1.2 billion USD.
Mansuriya Gas Field Development Project
The Consortium including TPAO, Kuwait Energy
and KOGAS (Korea Gas Corporation) won the
Mansuriya Gas Field (TPAO as operator with
50% share, KOGAS with 20% share and KEC
with 30% share). It is estimated that Mansuriya
Gas Field has 2.6 tcf gas reserve on place.
Capital expenses and operating expenses for
the development of the field are estimated as
approximately 2.7 billion USD.
Mansuriya and Siba Gas Fields Development
Production Service Agreement was signed in
November 15 th , 2010.
Other Countries
In addition to the activities mentioned
above,TPAO has been continuing to search
and negotiate for business opportunities in
other hydrocarbon rich regions such as Russia
Federation, Indonesia, Sudan, Yemen, North
Africa and South America.
32 TPAO 2010 TPAO 2010 33

34 TPAO 2010
TECHNOLOGY AND SERVICES
TPAO, by using the latest
technology in the world oil sector,
develops its strategy according
to the competitive environment
in the sector and conducts its
activities effectively, efficiently
with low cost by saving time.
Within the scope of using advanced technology,
2D seismic data acquisition system with 240
active channel capacity was re-designed and
converted to 3D seismic data acquisition system
with 1,440 active channel capacity.
Through this system, shot number per km 2 was
reduced and also cost reduction and time saving
were obtained. In parallel with accelerated
exploration activities, data processing capacity of
seismic crews was expanded through updating
technology in Seismic Data Process Center.
3D Seismic Interpretation and Simulation
System was put into operation in May 2005 in
order to minimize the risk factor in hydrocarbon
exploration and to carry out integrated and more
effective seismic data surveys in the interpretation
systems through the goal of raising the discovery
success ratio.
Data Bank installation studies were initiated for
easy access, sharing and protection of data used
for exploration activities. The field geology crews
were equipped with GPS and tablet PC in order
to study in an efficient and effective way.
Deep Water Drilling Technology
TPAO is continuing its drilling activities in Black
Sea within the context of joint exploration and
development projects by intensifying its offshore
exploration activities in recent years.
Within the framework of joint activities with bp,
TPAO completed the first deep water drilling in
the Eastern Black Sea in 2006 (Hopa-XI) and
gained a significant experience in deep water
drilling technology.
Moreover, by bringing drilling platform “Leiv
Eiriksson” to offshore Sinop, in partnership
with PETROBRAS, deep water drilling studies
were completed in Western Black Sea. TPAO
continues its studies to determine the offshore
hydrocarbon potential of the Black Sea and is
increasing its efforts to discover new fields for
providing added value to the national economy.
In the context of deep water drilling activities,
TPAO completed the drillings of Sinop-1 well
with partnership of PETROBRAS-EXXONMOBIL
and of Yassıhöyük-1 well with partnership of
CHEVRON in 2010. The operations are still
going on in Sürmene-1 well drilled by TPAO’s
operatorship itself.
Oil sample obtained from Sürmene-1 well is
an important milestone for TPAO to reveal the
hydrocarbon potential of The Black Sea.
For the wells drilled in international standards,
TPAO worked with more than 45 service
companies. A new team is formed within TPAO
Drilling Department, combining technical
expertise of well planning, contracting and
administrative branches and this new team has
worked together with the consultants and third
parties in an effective environment.
Modernization of Drilling Rigs
For the drilling operations, renewing current rigs
and purchasing new ones processes have been
accelerated. A 1,500 HP AC Rig was ordered
from National Oil Varco (NOV) and obtained in
2010 to be used in Batman District Management
drilling activities. This rig is “Ideal Rig” model
of NOV and is safe, easy to install and is an
electrical rig that works with AC.
Production Field Development Technology
All oil and natural gas fields are monitorized
actively by multidisciplinary teams using special
software which have regularly updated digital
database and by broad communication network
system created among center and fields.
Reservoir model can be created and
petrophysical rock properties such as porosity
and permeability and distribution of reservoir
can be monitored easily by reservoir modeling
and simulator. Besides, pressure and gas/oil/
TPAO 2010
35

water saturation changes by production can be
observed. Thus, regions in the field that are not
drained can be determined. By using different
production scenarios, best case can be obtained
to get the highest recovery factor for the field.
By means of reservoir and well analysis software,
production performance of both field and each
well in the field can be observed historically.
Well cross sections, digital logs, well completion
operations and well performance are being
monitored simultaneously.
Moreover, future production forecasts can be
made by “Decline Curve Analysis”. Also field/
well, production/reserve estimation of new drilled
wells can be made by evaluating well test data by
using advanced software. Reservoir parameters
such as effective porosity, water saturation
which are obtained from log interpretations
are the most important parameters in reserve
calculations. In this objective, digital log data of
the wells are processed with advanced software
and parameters required for calculations are
obtained.
As a result of these technological and scientific
studies, new production well locations, new
production zones in a reservoir, suitable
secondary production method in the field and
appropriate warning methods to improve the
performance of existing wells can be determined
if needed and field production evaluation can be
carried out easily.
Research and Development Technologies
In accordance with the policy of following
innovations in technology, TPAO has concentrated
on technological investments of exploration,
drilling, well completion, production and research
center. The knowledge power gained through RD
studies and new technology are reflected to the
exploration and production activities and also to
laboratory supported projects.
Research Center Technologies
• Isotope Geochemistry,
• Digital Core Imaging,
• Determination of Source Rock
Kinetic Parameters,
• Surface Geochemical Prospection,
• Soil Gas Analyses,
• SEM with Low Vacuum,
• Spectral Core Gamma Ray Logger,
• Automatic Thin Section System,
• Determination of Solid Phase Behaviour
under Reservoir Conditions,
• Interfacial Tension and Contact
Angle Measurements,
• Reservoir Conditions Core Flood System
• GC Analysis to Determine Oxygen
Compounds in Gasoline, Fatty Acid
in Biodiesel,
• LC Analysis for PAH (Poly
Aromatic Hydrocarbons) Measurements
of Diesel and Environmental Samples,
• Computer-Aided Mud-Cement Systems,
• Mobile Laboratory in the Field and the
Well Site,
• Oxidation Stability Tester,
• ICP-MS,
• FTIR,
• Total Sediment Tester,
• Gum Content Tester,
• Micro Carbon Residue Tester,
• Lubrication Tester.
Data Acquisition with Geophysical Methods
Seismic Data Acquisition
Seismic data acquisition has been carried out
by Geophysical Operations Department with
three Seismic Crews. Seismic Crew-1 having
5 units of M26 HD/623 B P type vibrators
enabled GPS system is operated by “Vibroseis”
method. Seismic Crew-1 has been operating in
3D seismic data acquisition with Sercel-428 XL
type recorder and it has 12 receiver lines, 120
receiver channels, totally 1,440 active recorder
channel system. Crew-1 has 2,500 channel
capacity.
Seismic Crew-2 is operating with “Dynamite” as
an explosive energy source. 14 Heavy-Weight
Rigs (Iveco 6x6) Truck Mounted Drills are being
used to locate the energy sources. Sercel-408 UL
type recorder is being used by Seismic Crew-2.
This crew generally operates 2D and 3D Seismic
data acquisition. For 3D acquisition, the crew
can operate up to 12 receiver lines, 120 receiver
channels, totally 1,440 active recorder channel
system. Crew-2 has 2,300 channel capacity.
Seismic Crew-3 having 5 units of NOMAD 65
type vibrators enabled GPS system is operated
by “Vibroseis” method. Seismic Crew-3 has
been operating in 3D seismic data acquisition
with Sercel-428 XL type recorder and it has
12 receiver lines, 120 receiver channels, totally
1,440 active recorder channel system. Crew-3
has 2,500 channel capacity.
All 3 Seismic Crews have been operating
with Leica GPS 1,200 system as topographic
instruments, while quality control and preplanning
studies are performed by EGHAS software.
Quality control procedures have been applied by
all seismic crews.
Furthermore, seismic field design, topographic
quality control, recorder quality control and static
analyses have been applied while performing
Seismic Data Acquisition Services.
Non Seismic Data Acquisition
Non-Seismic Data Acquisition surveys are carried
out by one Gravity and Magnetic Acquisition Crew
under Geophysical Operations Department.
36 TPAO 2010 TPAO 2010
37

Seismic Process Applications
• 2D/3D Conventional Seismic Processing,
• Refraction Static,
• Signal Processing,
• Signal Enhancement,
• Multiple Attenuation (RADON/SRMA),
• DMO,
• 2D/3D Post Stack Time Migration,
• 2D/3D Pre Stack Time Migration,
• 2D/3D Post Stack Depth Migration,
• 2D/3D Pre Stack Depth Migration,
• 2D/3D AVO,
• VSP Processing,
• Long Offset Seismic Line Process
(2D PSTM and PSDM),
• Seismic Modelling.
Seismic Data Processing Softwares
2D/3D onshore and offshore data processing
has been realized by Focus and Geodepth
softwares of Paradigm Company. Also, Thrustline
Softwares of Geotomo Company have been
used to solve problems in Southeastern Anatolia
Region Thrust Zone.
Interpretation Systems
TPAO has systems in order to meet the demand
of softwares and hardwares for oil exploration
and other requirements. For interpretation
systems, CBS system and other applications,
ORACLE data base is being used.
In these systems, 110 TB disk capacity is on
EMC, HITACHI and IBM disk units. In addition
to this, ADIC and IBM tape libraries with
approximately 300 TB capacity and expandable
structure, backup and disaster recovery systems
are being used.
GIS and Remote Sensing
The management of all datas like topographic
map and other maps, satellite images, geodesic
datas, geophyisc seismic, gravity/magnetic datas,
cultural datas that are required in the studies of
TPAO and correction of vector datas are realized
with CBS approach and instruments.
In the scope of these studies, the digitazing of
geological maps produced with field surveys by
TPAO staff and unification of these maps as vector
datas with CBS approach is a current project that
is studied on intensively and livingly. Additionally,
it is planned to conduct studies about unification
of obtainable vector topographic maps with CBS
approach.
3D Visualization and Interpretation Center
TPAO has been using 3D seismic interpretation
and simulation system since May 2005 in order
to minimize the risk factor in hydrocarbon
exploration and to carry out integrated and more
effective seismic data surveys in the interpretation
systems for raising the discovery success ratio.
Data Bank
Today, energy companies have a huge amount
of well and seismic datas. One of the problems
that they come across is to archive these datas
efficiently and securely.
PetroBank ® MDS is a software that enables
its users to access easily, securely to their
exploration and seismic, well, production and
other technical datas online.
In this context, the project that enables the
management and storage of all datas of TPAO,
also enables to digitize and store archive folders.
In regard of this, data loading process is still
ongoing in 2010.
Well Geology Services
Mud Logging Unit (MLU) Systems
By MLU systems, which provide services for
both our Corporation's and joint-ventures'
modern gas and exploration well pursuits, data
that belongs to geological and drilling disciplines
are registered methodically and provided for the
service of relevant project and management
authorities.
Real Time Visualization System
Within the advanced technology and in
accordance with requirements of our Corporation,
Real Time Visualization Project which had been
started to be built up in 2007, was put into service
in December 2008, succeeding the test activities
completed in the last quarter of 2008.
Research Center Laboratory Services
In 2010, technical services, analyses, sample
preparation, projects, consulting and training
programs were performed on due basis requested
by universities, industrial foundations, domestic
and foreign oil companies operating in Türkiye
and abroad. On behalf of the private domestic
and foreign oil companies, sedimentological,
mineralogical-petrographical, paleontological
and geochemical analyses were carried out.
Additionally, engineering and consulting services
were given in domestic and international drilling
wells which are totally 52 including 37 onshore,
2 offshore and 13 Libyan wells. Moreover,
performance and comparative performance tests
were conducted with the cement samples.
Research Center has provided field services and
consultancy during the course of water shutoff
treatments in 9 wells in Karacan, Sarıcak and
G.Sarıcak fields.
In the framework of Research Center
Laboratory Services
• Stratigraphy,
• Sedimentology and Reservoir Geology,
• Drilling Technology,
• Reservoir Engineering,
• Production Technology,
• Organic Geochemistry,
Laboratory services were provided.
38 TPAO 2010 TPAO 2010
39

Research Center Training Activities
• Applied Well Control,
• Applied Lithostratigraphy and
Sedimentology on the Tertiary, Mesozoic and
Paleozoic Sequences of Southeastern
Anatolia Petroleum Region,
• Biostratigraphy
• Sedimentology of Fan Deltas
(Field Course in the Antalya Miocene Basin),
• Clay Mineralogy and Microanalysis
Techniques (XRD/SEM/EDS) and Their
Usage in Exploration,
• Applied Drilling Fluids Technology,
• Matrix Acidizing,
• Core Analyses,
• PVT Analyses,
• Oilfield Water Treatment and Injection
Quality Determination,
• Corrosion Control in Oil & Natural
Gas Production, and other training
activities were provided.
Drilling Services
The basic principle of our quality policy is to
supply drilling services for TPAO’s and our
customers’ exploration and production activities
through meeting their increasing requirements
and expectations with high quality and relevant
cost.
While conducting drilling activities with highly
experienced staff, our target is to drill the wells in
a safe, secure and high quality manner with low
cost by applying the latest technology.
TPAO Drilling Department provides drilling,
casing deployment, drilling for core plug, well
control, air-foam-low pressure drilling services
with the rigs having various drilling capacity.
In this context;
Drilling Experiences in 2,708 wells,
Deep Well Experience (7,216 m),
Directional and Horizontal Wells,
Multi Lateral Well Drillings,
ERD (Extended Reach Drilling).
Well Completion Services
Well completion services, comprising Workover,
Logging and Technical Operations branches,
provide services in Türkiye and abroad in line
with our Corporation’s objectives. Workover,
cementing, acidizing, DST, logging and
perforating operations have been conducted in
oil, natural gas and geothermal wells by following
high standards.
Workover Operations
83 completion, 115 recompletion and 3,858
well repair jobs were performed by utilizing 13
workover rigs and 7 rodpuller rigs in 2010.
Log Operations
Totally 510 logging and perforating jobs were
accomplished in 2010.
Technical Operations
In 2010, 488 cementing jobs (199,653 tons
cement was used), 281 acidizing jobs (605,652
Gal 30% HCl was used) and 138 DST jobs were
performed.
40 TPAO 2010 TPAO 2010
41

42 TPAO 2010
RESEARCH CENTER
TPAO took its place among major
oil companies in its region with
its contemporary, dependable,
modern & accredited laboratories
at an international level.
TPAO Research Center, established in 1974,
has a capacity to perform over 400 different
types of analyses and tests with its 27 different
laboratories and 81 well-trained, experienced
staff.
Our Research Center provides projects related to
Research and Development studies, consultancy
services and is an efficient Research Center with
its expertise experiences.
In this context, in parallel to the current studies,
research and evaluation studies have been
carried out to find solutions to the problems
encountered in the well and field applications by
geology and oil-natural gas services.
A total of 37 projects, which are in collaboration
with Exploration, Production, International
Projects, Occupational Safety and Environmental
Protection Departments, were performed in the
Research Center during 2010. Besides these
projects, 4 university projects were supported.
Quality control tests were conducted in the
Geology and Engineering Laboratories within
the scope of these projects. The overall number
of tests and analyses is 43,536. 67 reports were
prepared related to these activities. Throughout
the year, totally 3,128 man/day of field engineering
services and field works were carried out in
domestic and international operations of TPAO.
The analysis of 4,000 soil gas samples collected
from Nevşehir/Kozaklı area by using Surface
Geochemistry Prospecting Techiques were
completed and the final report was prepared.
Exploration studies based projects
• Western Black Sea Offshore Project,
• Black Sea Offshore and Onshore Projects
• Eastern Mediterranean Neogene Project
• Middle Taurides Mesozoic Project
• Kayayolu-Kastel Fields and Surrounding
Area Evaluation Project,
• Şambayat Field Reservoir Facies
Description Project,
• Güney Kırtepe Project,
• “Unconventional Reservoir” Project,
• Southeastern Anatolia Genetic Evaluation
of Group I Petroleums Project,
• Geochemical Surface Prospection of
Kozaklı District,
• Description of the Ceylan- Soğucak Facies
of Thrace Region (Uzunköprü) Project,
• Niğde-Ulukışla Region Petroleum
System Project,
• Libya Project,
• Iraq Project.
Production studies based projects
• Batı Raman Enhanced Oil Recovery
Project Field,
• Raman Field Water Shutoff Project,
• Sedimentology, Characterization
and Geochemistry Projects of Raman
Field Reservoirs,
• Determination of High Temperature Gels
for Water Shutoff,
• Determination and Elimination Studies of
Scale Tendencies in Production Waters of
Raman Field,
• Enhanced Oil Recovery Process for
Extra Heavy Oils,
• Determination and Elimination Studies of
Scale Tendencies at Kurkan Fields.
TPAO 2010
43

In the scope of Occupational Safety and
Environmental Protection, the project of
“Management of Waste Water” resulted by
petroleum and natural gas is carried out with
TÜBİTAK and İTÜ Environmental Engineering
Department.
“Applied Well Control Courses” proper to the
IWCF Certificates was given to the TPAO’s
technical staff coming from national/international
companies by TPAO’s engineers and technicians
in the scope of the related procedure.
16 Applied Well Control Courses were carried out
for 160 personnel consisting of engineers and
technicians. 67 IWCF Well Control Certificates,
151 TPAO Well Control Certificates and 9 TPAO
Certificates of Course Completion were granted
to the successful trainees in 2010.
Totally 377 trainees, from both TPAO and other
companies were given technical trainings on 14
different subjects by these courses.
Research Center Laboratory Services
In the Geology Laboratories, analyses were
performed mostly related with biostratigraphy
(micropaleontology, nanoplankton and
palynology), sedimentology (petrography, clay
mineralogy, scanning electron microscope-
SEM/EDS, lithology, sequence stratigraphy and
reservoir evaluation), geochemistry (gas, oil,
source rock, organic petrography, oil and gas
origins, isotope analyses, kinetic parameters,
oil-oil and oil-source rock correlations, reservoir
geochemistry, mathematical modeling, evidence
analyses, oil systems and potential with informing
samples) subjects.
In drilling, reservoir and production technologies
laboratories studies and analyses related to
drilling fluid and cement program, additives
quality control, rock mechanics-well bore stability
simulation, simulation of hydraulic and acid
fracturing, basic and special core analyses,
reservoir fluids (PVT) analysis and EOR subjects,
corrosion and scale control, injection water
quality, fuel oil analyses, are conducted.
The Accreditation Registration of TPAO Research
Center Laboratories was renewed for four years
in 2010 as a dependable, contemporary arbitrator
laboratory at an international level accordance
with the TS EN/ISO IEC 17025 “General
Requirements for the Competence of Calibration
and Testing Laboratories” standards, total of 34
analyses on the following titles reaccredited;
• Petroleum Product Analyses,
• Water Analyses,
• Drilling Fluids Additives Analyses,
• SEM/EDS and Clay Minerals Analyses,
• Biodiesel Analyses.
As a result, all 2 nd level tests planned for 2010
were accredited for gasoline, diesel and fuel-oil.
44 TPAO 2010 TPAO 2010 45

OCCUPATIONAL SAFETY AND
ENVIRONMENTAL PROTECTION
Nowadays, possessing occupational
safety and environmental
protection consciousness means
develeopment for societies and also
means competitive advantage for
companies.
Today, due to increasing importance of
occupational safety and environmental
protection, accidents and occupational diseases
prevention and work productivity have become
more considerable.
In regard of this, target results have consistantly
been followed in order to develope occupational
safety and environmental protection policies by
creating HSE performance parameters.
In our Corporation, parallel with increasing
exploration, drilling and production activities,
human health, occupational safety and
environmental protection activities are carried
out extensively by new projects.
Occupational Health and Safety
Regarding all risk levels of activities, TPAO
aims at eliminating or mitigating the risks to the
acceptable levels. In risk studies; periodic audits
are conducted for detection of risks, researching
the accident causes, determining the hazards,
detecting the unsafe ambience and unsafe
actions.
Considering the work conditions, suitable and
standard Personal Protective Equipments (PPE)
were supplied for working staff. Fire Protection
Trainings and drills were conducted to eliminate
fire risks. Deficiencies were detected and
eliminated reviewing the current systems.
Additionally, the primary health service
requirements of our staff are provided at
Corporation Health Center.
Environmental Protection
Basic Environmental Projects regarding
environmental issues have been conducted
in order to inherit a clear atmosphere, clean
water and a clean environment to the next
generations.
In District Managements, rehabilitation activities
have been performed in order to eliminate or
mitigate the land pollution. Achievement in
2010 is higher compare to 2009. The success
percentages in Districts are 96% for Batman and
81% for Adıyaman. Fortunately, there was no
pollution in Trakya District.
Environmental Protection Procedures were
prepared in order to increase the efficiency
of Environmental Management System.
Complying with environmental legislation,
bioremidation, stabilization and neutralization
acitivities and mud-pit rehabilitations in drilling
sites were conducted to prevent environmental
contamination resulting from field activities.
Environmental Protection Projects carried out
by TPAO throughout in 2010;
• Emergency Intervention Planning Activities
• Waste Water Management Project
(TÜBİTAK-KAMAG Project)
• Drilling Waste Water Management Project
• Comparative Application Project of
Bioremidation Products
• Recycling Waste Oil by Mixing it into
Crude Oil
• Waste Water Disposal Management
• The Use of Consumable Environmental
Materials and Equipments
• Western Black Sea Off-Shore Project
• Deep Water Off-Shore Drilling Projects;
• Management Studies on Waste Water
Resulted from Off-Shore Gas Production
In the scope of
Waste Management;
medical wastes like
papers, batteries,
toners, cartridges
are collected for
recycling.
46 TPAO 2010 TPAO 2010 47
In 2010,
1,406 staff
took part in
Occupational
Safety and
Environmental
Protection
trainings that
increase
gradually.

TPAO uses
competence
techniques
related to
the personel
development
abilities and
analytic thinking
in addition to
the technical
knowledge.
HUMAN RESOURCES
TPAO, having a dynamic Human
Resources System, believes that
success can only be achieved
through highly motivated, expert
individuals.
With its staff’s great endevaour, dedication
and rooted company culture, TPAO has been
conducting its activities for 57 years with
its worldwide technological infrastructure
and qualified manpower that represented
our corporation successfully in international
projects.
TPAO continuosly invests in human resources
development in line with its vision to become
regionally effective world-class energy company
meeting Türkiye’s oil and natural gas demand
and to be the most desired company to work
with.
“Performance Management System”, implemented
to increase the performance of our
staff, is revised every year with the experience
gained throughout years and is moving towards
to become a system easier for users and giving
feedback to the managers directly.
Work Analyse Project
Humanbeing is the most valuable source
in institutions in order to compete in sector
conditions that globalization requires. Thus,
while investing in humanbeings, institutions have
to develop and implement systems.
In this scope, Work Analyse Project that
contributes to the integration of “Modern Human
Resources Functions” to our Corporation’s
structure, started in 2009 and datas obtained
from 1,164 people through observation and
interview method. In the results of these datas,
studies are still ongoing.
By the end of 2010, total number of employees
is 4,708; 1,601 in General Directorate, 1,740 in
Batman, 466 in Thrace and 901 in Adıyaman
District Management.
TPAO’s qualified and experienced staff
bearing many ethical principles, such as merit,
effectiveness, team work, communication,
self-efficiency for coping with the changes and
responsibility, will carry TPAO to great success
in the future.
Continuous Training
All corporations need qualified staff, who can help
reaching the corporation’s goals and objectives.
Objective of training and development activities
is to equip staff with the skills and knowledge
that will enable them to contribute to the targets
of the corporation. Within this scope, training
and development courses were accelerated for
the staff to follow up-to-date information and
developing technology.
In this context, a total of 4,659 staff, 4,423
in Türkiye and 236 abroad, participated in
various training programs. Within the scope of
orientation training program, new employees
of different departments have been informed of
our field activity, visited oil fields in the District
Managements and carried out onsite inspection.
Life Quality of the Employees
TPAO believes that self-sacrificing studies and
high performance of the employee depend on
high life quality. Based on this belief, various
social activities such as spring festival, bowling,
dart, soccer and tennis tournaments have been
arranged in order to increase motivation of
the employees. These activities also provide
communication required for the company culture
to be effectuated.
Besides, TPAO offered holiday oppurtunities
for the employees with their families in its own
Social Complex in Güllük/Muğla.
48 TPAO 2010 TPAO 2010 49

DISTRICT MANAGEMENTS
Our District Managements,
while conducting their activities,
are playing a great role in the
development of the social and
economical life of the regions.
Batman District Management
In Batman District Management exploration,
drilling and production activities of crude oil and
natural gas, which are vital inputs of national
economy, have been carried out continuously
since 1954.
The first oil discovery in Türkiye was realized
at Raman Field, in 1945 by MTA and the first
production in economical means was realized
in Raman-8 well in 1948. After the foundation
of TPAO in 1954, Batman District Management
played a leading role in the exploration,
drilling, production and refinery activities of the
country.
In 2010, the development activities were
also continued in Karacan Field, which was
explored in 2009. In this context, 3 new wells
were drilled in 2010. At the same time, Köseler
and Güzeldere Fields in Batman Region and
Güney Sarık Field in Diyarbakır Region were
explored.
Revision operations related with production
pipelines, electricity line and surface facilities
are ongoing at the fields joined to our
corporation due to license revolving. In this
context, project of a new production station is
completed in Kurkan Oil Field.
With the aim of protecting the soil and
preventing soil pollution during and after
hydrocarbon exploration and production
activities, Batman District Management
concentrated on the implementation studies
of bioremediation method used by the
petroleum companies worldwide, in addition
to the rehabilitation studies of contaminated
soil through neutralization and stabilization
methods.
Batman District Management has also played
an active role in the economic and social
development of the region while conducting all
these activities.
Batman has gained a great dynamism in
the economical and social areas with the
discovery of oil and the establishment of
refinery. Today, Batman, as being located
around TPAO complex and plant, has a great
deal of contribution to the national economy
by increasing the employment volume in the
region.
Thrace District Management
TPAO initiated its exploration and drilling
activities in Thrace Basin with Uluman-1 well in
1960. As a result of the operations performed
in Thrace District, the first economical natural
gas discovery was made in 1970 at Hamitabat
and Kumrular Fields and the first oil discovery
was realized in K.Osmancık and Deveçatak
wells which were drilled in 1973-1974.
Silivri Underground Natural Gas Storage Facility
was established in 2007. After the development
period, the reproduction activities continue
successfully in the 4 th Storage Phase. During
this phase, 1,494 million sm 3 of natural gas was
injected to Kuzey Marmara and Değirmenköy
Fields and 1,178 million sm 3 natural gas was
reproduced from our reservoirs.
Taking the importance of gas storage units in
gas supply security and energy independence
of our country into consideration, TPAO
has initiated studies to increase its storage
capacity to approximately 3 billion sm 3 and its
re-production capacity to 50 million sm 3 /day
and initiated the necessary works.
TPAO contributes to the economy of the Thrace
Region by providing low-cost energy input to
the industrial plants that play significant roles
in the national economy.
Adıyaman District Management
In 1954, after the acceptance of Petroleum
Law No: 6326, foreign companies came to
Türkiye for petroleum exploration. In 1958, the
first petroleum exploration of Adıyaman Region
was made by California Asiatic Oil and Texaco
Overseas Petroleum at Kahta-1 well.
In 1988, after the discovery of Karakuş Field in
the results of exploration activities, G.Karakuş
(1989), Cendere, K.Karakuş, Beşikli and O.
Sungurlu (1990), D.Beşikli, Bakacak, Tokaris
and İkizce Fields (1991) were also explored.
Adıyaman District Management that has a
great role in the development of social and
economical life, has contributed a lot to the
economy of the region and the country.
50 TPAO 2010 TPAO 2010 51

SUBSIDIARIES AND ASSOCIATED COMPANY
Turkish Petroleum International Company
LTD. (TPIC)
TPIC was established in 1988 in Channel
Islands/Jersey, to operate in all branches of
oil industry comprising exploration, drilling,
field development, production, transportation,
refining, crude oil and oil products trading and
marketing.
TPIC focused its exploration, production and
service activities in Colombia and Iraq, at the
same time continues its business development
activities in Venezuela, Ecuador and Bolivia.
Colombia Activities
Gonzalez Block
TPIC has been conducting joint exploration
activities with its partner ECOPETROL; National
Oil Company of Colombia, in Gonzalez Block
in Catatumbo Basin since February 2008. TPIC
serves as the Operator of the block and also
has 50% participating interest in the project.
The first exploration well, Rio Zulia West-3
(RZW-3), was completed in March 2010 with oil
discovery. The second well, Rio Zulia West-4
(RZW-4) was spudded in December 17 th , 2010
and the drilling operations are ongoing.
Maria Conchita Block
In 2009, TPIC signed an Exploration and
Production agreement for the Maria Conchita
Block located north of Colombia in the Guajira
Basin with National Hydrocarbon Agency -
Agencia Nacional de Hidrocarburos (ANH).
TPIC holds 51% of the shares as well as
serving as the operator whereas Genel Enerji
holds 40% and Multiservicios RJT LTDA holds
9% of the shares. In the first exploration phase
in 2010, 120 km 2 3D seismic operations were
completed. The first well will be drilled in the
second phase in 2011.
Iraq Activities
With the advantage of having access rights to
logistic and maintenance units of TPAO located
close to the Iraqi border, TPIC participates in
tenders for different fields throughout Iraq and
intends to increase the service operations in
Iraq. Accordingly, TPIC participated in the
tender opened by SOC (South Oil Company),
the National Petroleum Company of Iraq, for
drilling and completion of 45 wells and it has
been planned to drill with 3 rigs in 31 months.
The tender was approved, the agreement
negotiated and thereafter signed on March
14 th , 2010. The project is ongoing within the
1 st and 2 nd wells.
Kazakhstan Activities
Founded in 1999, TPIC Aktobe Branch
Office is successfully conducting projects in
Kazakhstan. Within the scope of Kazakhstan
activities, drilling and well completion services
were performed for Zhaik Munay Company
and Kazakh Oil Aktobe (KOA) Company.
TPIC, within the concept of 5 wells drilling
contract signed with KazakTurkMunai (KTM)
Company on April 22 th , 2008, continues the
drilling operations commenced on October,
2008 in 5 th well.
Türkiye Activities
Within the scope of activities in Türkiye, TPIC
continued its drilling and well completion
services for TPAO, BM Construction and
Engineering Co., Güriş Construction and
Engineering Co., Zorlu Energy and Sanko
Holding.
Oil Field Services
In 2010, TPIC continued to provide oil field
services by increasing the number of crews
both in Türkiye and abroad and provided well
completion and workover services in 218
wells.
In addition to drilling 52 oil wells, 13 geothermal
wells were drilled in Türkiye.
With the experience gained through working
in various weather conditions and challenging
work environments like high pressure, high
temperature and deep wells, TPIC continues
to provide petroleum services. These services
are supported with maintenance and technical
service.
Oil Products Trade
Beginning with SOMO in Iraq, TPIC has
expanded its oil trade activity area with the
experience gained throughout the years
and extended its region of operation to Iran,
Turkmenistan, Syria and Turkish Republic of
Northern Cyprus in addition to Iraq.
The fuel oil transportation project by sea
route, which started in 2009, has successfully
continued in 2010 from TÜPRAŞ Aliağa
Facility to Cyprus Electricity Authority’s (Kıb-
Tek) Teknecik Terminal. Since November
2009, total of 230,000 tons of fuel oil have
been dispatched. The Fuel Oil Trade Contract
was extended 5 more years with the contract
signed with Kıb-Tek in January, 2011.
To meet the demand of Iraq Electricity Ministry
in Bagdad and Necef Regions, 100,000 tons
of gasoil was delivered from Basra Terminal
within the concept of contract signed with
SOMO in 2010.
52 TPAO 2010 TPAO 2010 53

Besides providing
trustable and
principled working
relations, TPpd
ensured government
reliability. By the
end of 2010, TPpd
achieved a number
of 102 dealers.
Initiated with the protocol signed between
Turkish and Syrian Energy Ministry, LPG trade,
which has commenced in 2008, has continued
during 2010. 32,000 tons of LPG was delivered
in 2010 over Türkiye to Syria Halep Region with
a total of 155,000 tons of LPG trade achieved
in this project.
TPIC continued its Caspian Region activities
by trading total of 15,000 tons of fuel oil and
gasoil from Turkmenistan by sea. Under the
mentioned project, since 2008, 255,000 tons
of gasoil, gasoline and fuel oil were traded.
In order to strengthen the planned bunkering
project in Ceyhan Region, to understand the
bunkering market and to fulfill the necessary
amenability for the project, TPIC started small
amount of bunkering sales in December 2009.
Since then, 700 tons of bunkering sales have
been sold.
TP Petroleum Distribution Inc. (TPpd)
TP Petroleum Distribution Inc. was founded on
February 16 th , 2006 as a subsidiary of TPIC.
Due to requirements, TPpd’s capital, which
was 50,000 TL in the beginning, is increased
in the following years and reached to 100
million TL.
With the target to reach market share of
10% with 750 dealers in the Turkish Market
by 2020, TPpd continued to expand its gas
station networking activities in 2010. Besides
providing trustable and principled working
relations, TPpd ensured government reliability.
By the end of 2010, TPpd achieved a number
of 102 dealers.
TPpd obtains the distribution products from
TÜPRAŞ Refineries and other distribution
companies’ storage facilities (as trading
between distributor companies) in Türkiye and
from TPIC as imported products. Currently,
TPpd has 14 different supply points from 6
different suppliers.
Since its establishment, TPpd, which has
continued growing, has become the 8 th biggest
distributor with market share of 2% in the and
of 2010.
Turkish Petroleum Overseas Company Ltd.
(TPOC)
TPOC Ltd. was established in Jersey, Channel
Islands in 1996 as an affiliate of TPAO to
carry out all activities related with technical
and commercial oil and gas trade. TPOC Ltd.
currently participates in Shah Deniz (9%)
and Alov (10%) Projects in Azerbaijan sector
of the Caspian Sea. TPOC is an operator in
exploration projects in Libya, with 51% share
in NC-Block-188 (Ghademes Basin) and
NCBlock- 189 (Sirte Basin) and with 100%
share in NCBlock-147/3-4 (Murzuq Basin).
TPOC Ltd. has 3 offices in Iraq Bagdad, Libya
Tripoli and Azerbaijan Baku.
Turkish Petroleum BTC Ltd. (TPBTC Ltd.)
TPBTC Ltd. was established in Cayman Islands
on February 20 th , 2002 in order to participate
in Baku–Tbilisi–Ceyhan Main Export Crude Oil
Pipeline (BTC) Project, which has a primary
objective of carrying the ACG and other
Caspian Region oil to international markets
and the Project Companies (BTC Co., BTC
Int. Investment Co. and BTC Finance B.V. ) on
behalf of TPAO. TPBTC Ltd. is wholly owned
by TPAO and currently has a 6.53% share in
the BTC Project and related companies.
Turkish Petroleum SCP Ltd. (TPSCP Ltd.)
TPSCP Ltd. was established in Cayman Islands
on May 24 th , 2002 in order to participate in
South Caucasus Pipeline (SCP) Project, which
aims to transport Shah Deniz gas, and related
project companies in accordance with the
project agreements on behalf of TPAO. TPSCP
Ltd. is a party of SCP Project agreements
which have been signed on February 27 th ,
2003. TPSCP Ltd. has 9% share in the SCP
Project.
KazakTurkMunai (KTM) Ltd. Joint Company
KazakhTurkMunai (KTM) Ltd. Joint Company
was established on January 9 th , 1993 by the
Foundation Agreement signed between TPAO
and the Kazzarubejgeologia State Enterprise
(KZBG) of the Kazakhstan’s Ministry of Geology
and Preservation of Underground Resources.
By this agreement, setting the shares as KZBG
51% and TPAO 49%, KTM Ltd. has acquired
hydrocarbon exploration and operating rights
in 7 blocks in 4 different regions of Western
Kazakhstan.
54 TPAO 2010 TPAO 2010 55

Although the damage of oil exploration and
production cause to nature is known, the activities
to minimize this damage are generally overlooked.
As Turkish Petroleum, we feel debted to posterity
that we are entrusted the nature for carrying out all
kinds of protection conditions determined by laws
during and after our oil exploration and production
activities.
56 TPAO 2010 TPAO 2010 57

FINANCE
Domestic Investment and Operational Expenditures
TPAO's domestic budget wich was 50 million dollars at the beginning of 2000, reached to 390 million
dollars in 2010 and to 823 million dollars in 2011. Operational expenditures were 546 million dollars
in 2010 and are planned to be 562 million dollars in 2011.
Most of our investments are comprised of especially exploration and drilling expenditures in offshore.
Great oil discoveries are resulted by intensive exploration investment programmes. It is expected that
this great increase in investments will create a chance to find new oil sources.
400
350
300
250
200
150
100
50
0
million USD
Capital Expenditures
2007
2008
2009
2010
Exploration
Drilling
Production
Other
Operational Expenditures
600
500
400
300
200
100
0
2007
2008
2009
2010
International Investment and Operational Expenditures
In 2010, TPAO conducted intensive work development activities in South America, Russia and
Middle East Region which have rich hydrocarbon reserves. Besides, in Azerbaijan and Kazakhstan
production activities, in Libya exploration activities and in Iraq exploration, production activities and
investments have continued.
In this context, TPAO's international investment budget is realized as 350 million dollars in 2010 and
it is foreseen that it will be 595 million dollars in parallel to our ever-increasing work programme in
2011.
58 TPAO 2010 TPAO 2010 59
Azerbaijan
ACG Project*
Shah Deniz Project
SCP Project
BTC Project
Kurdashi Project
Alov Project
TPAO Baku Offices
Kazakhstan (KTM)
Turkmenistan
Libya
Algeria
Georgia
Iraq
New ventures
TOTAL
2010
250,925
184,233
65,495
59
51
-
38
1,049
78
-
85,328
-
-
13,652
44
350,027
* Doesn't include 41 million USD tax for ACG Project in 2010.
Cumulative
4,172,360
3,068,805
617,935
109,049
324,387
17,302
26,197
8,685
288,048
4,727
172,454
25,549
(thousand USD)
633
14,964
4,314
4,683,049

60 TPAO 2010 TPAO 2010
61

62 TPAO 2010
Subsidiaries and Affiliated Companies and Their Shareholding Percentages
Affiiates and Subsidiaries
KTM
TPIC
TPBTC
TPSCP
TPOC
AOIC (6,75% partner of
ACG Project)
Basis Of Presentation For The Financial
Statements
1.1 Statutory Books & Financial Statements
The consolidated financial statements of TPAO
and the Group have been prepared in accordance
with International Financial Reporting Standards
(IFRS). The company, which is incorporated in
Türkiye, maintains its books of accounts and
prepares its statutory financial statements in
accordance with the Turkish Commercial Code
and Tax Legislation and the Uniform Chart of
Accounts issued by the Ministry of Finance.
The foreign subsidiaries and associates
maintain their books of accounts in their local
currency according to current commercial / fiscal
legislation, project agreements, attachments and
in compliance with the standards taken up as
references. The financial statements have been
prepared from statutory financial statements of
the Company and its subsidiaries and associated
with adjustments and reclassifications for the
purpose of fair presentation in accordance
with IFRS. Until the difference between the
International Accounting Standards (IAS)/
International Financial Reporting Standards
(IFRS) recognized by the European Union and
the standards published by the International
Accounting Standards Board (IASB) are
announced by the Turkish Accounting Standards
Board (TMSK), the financial statements are
Effective Rate of Ownership (%)
49
100
100
100
100
100
Method
Equity Method
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
Full Consolidation
prepared in line with IAS/IFRS under the Capital
Markets Board (SPK) Communiqué Serial: XI,
no: 29. The annexed financial statements and
footnotes are presented according to the format
required to be implemented by the SPK.
Functional currency used in company’s
operations is Turkish Lira (TL), and functional
currency used in reporting is United States
Dollars (USD). Financial statements and notes
in the appendix are presented in United States
Dollars (USD).
1.2 Adjustment of Financial Statements In
Hyperinflation Periods
Under the SPK decision dated March 17, 2005,
and numbered 11/367, the inflation accounting
practice is ended as of January 1, 2005, for the
companies operating in Türkiye and preparing
financial statements in line with the SPK
Accounting Standards (including those which
adapt the IAS/IFRS application). In line with this
decision, the Standard on "Financial Reporting
in Hyperinflationary Economies" (“IAS/TMS
29”) released by the IASB was not applied as of
January 1, 2005.
1.3 Comparison of the Previous Period
Financial Statements
Comparison information was classified for the
purposes of conformation with the presentation
of the current period financial statements if
necessary.
1.4 Basis of Consolidation
Consolidated financial statements comprising
TPAO (“Company”, “Parent Company”) and
the partnership controlled by TPAO, have been
prepared by considering the financial statements
belonging to the year ending on 31, December
2007. The subsidiaries are defined as the
companies controlled by the Parent Company
holding more than 50% of the shares and voting
rights directly or indirectly within the scope of
capital and managerial relations or having the
right of electing the majority of the management
or having the majority of the management over
the subsidiaries. The power of control implies that
Parent Company plays the efficient role over the
decisions of the company (Subsidiary) regarding
the financial and operational politics and the
power of managing aforementioned politics for
the purpose of benefiting from the operations
of the pre-mentioned company. The companies
those do not have supervision capability but
whose 20%-50% of the shares controlled by the
parent company are defined as Partnership.
The subsidiaries and affiliated companies and
their shareholding percentages at 31 December
2010 are on the left page.
The company’s shareholding percentage in
KTM is shown in the financial statements by
using equity method. The equity and net income
attributable to minority shareholders’ interests
are shown separately in the balance sheet and
income statement, respectively. The losses
applicable to the minority are charged against
the minority interest, so as not to exceed the
minority interest in the equity of subsidiary.
As the investment in KTM is classified as an
associated company, it is accounted for on
equity basis. Participating interest acquired in
KTM is accounted for by the equity method.
The equity method is a method of accounting
whereby an equity investment is initially recorded
at cost and subsequently adjusted to reflect the
investor’s share of the net profit or loss of the
associate (investee). Distributions received
from the investee reduce the carrying amount of
the investment. The recoverable amount of an
investment in an associate is assessed and if
there is an indication that the carrying amount
of the associate may be impaired permanently
adjustment is made to state it at its recoverable
amount. The book value of the investment in
the capital of subsidiaries held by the parent
company has been off-set against the equity of
the invested companies and all inter-company
purchase and sales and all accounts receivable
and payable balances have been eliminated.
1.5 Changes in Accounting Policies
If the changes in accounting estimates are about
only one term, they are applied in the current
period when the change was made, if they are
about future terms, they are applied both in the
period the changes were made and in the future
periods, prospectively. There have been no
significant changes in the accounting estimates
of the Group in the current period.
Summary of Significant Accounting Policies
2.1 Revenue
The group’s income consists of crude oil and
natural gas sales and the revenues of various
services. Around 78% of the income in question
are generated by the crude oil sales. (2008: 77%)
The income generated by sales are recognized
in accounting when all the following conditions
are fulfilled.
•The Group transferring all the significant risks
and gains on property to the buyer,
•The Group not having a proprietary and ongoing
administrative participation and an efficient
control over the sold goods,
•The amount of income being measured
reliably,
•The flow of economic benefits about the
transaction to the enterprise being probable,
•The costs incurred or to be incurred by the
transaction being measured reliably.
Although the IAS 18 Revenue standard does
not cover the revenue generated by the mining
activities, various recommendation texts and
the practices that are generally accepted in the
TPAO 2010
63

Land Improvements
Buildings
Machinery and Equipments (*)
Motor Vehicles
Furniture, Fixtures And
Office Equipment
Depreciation Rate
%5 - %15
%2
%10 - %20
%20
%5 - %16
(*) Includes machinery and equipment used for production oil or
natural gas.
literature show that IAS 18 is the basic guide with
regards to the time when revenue arises in the
mining industry. After the production of crude oil,
the company transports the product to the buyer
through pipelines and in this stage the significant
risks on the product is not transferred to the buyer
yet. When the product is delivered to the buyer,
it is accepted that the revenue has arisen since
all significant risks and gains on the property are
transferred to the buyer, in line with the clauses
of the standard, and the income is recorded.
The company income includes the invoiced
values of the goods sales at the end of this
process. The service incomes are recorded as
revenues when they are realized.
Net sales are calculated by deducting sale returns
and discounts from the invoiced sale amounts of
goods and services delivered to the buyer. In
case there is a significant financing expense in
sales, the fair value is determined by discounting
the future cash receipts by the implicit interest
rate in the said financing expense. According
to accrual principle, differences between fair
values and the nominal values of the sales are
recognized as interest income.
If the collection of the amounts recorded as
revenues becomes doubtful, the allowances
of doubtful trade receivables are taken to the
financial statements as expense, and not through
the correction of the amount of revenue.
2.2 Inventories
Inventories are valued at the lower of cost and net
realizable value. The cost of inventories include
all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories to
their present location and condition. The unit cost
of the inventories is determined with weighted
average cost method. Net realizable value is
the value obtained when the total amount of
estimated completion cost and estimated sale
cost necessary to make the sale is deducted
from the estimated sales price in the ordinary
course of business.
IAS 2 Inventories Standard suggests the use of
real party cost method in the determination of
inventory costs, when possible, and the use of
first-in-first-out (FIFO) or the Average method
when the real cost cannot be determined. The
cost is determined with the use of weighted
moving average cost method for first good and
material, work in progress, merchandise and
other inventories.
2.3 Fixed Assets
2.3.1 Tangible Fixed Assets
The tangible fixed assets purchased before
January 1, 2005, were reflected with the deduction
of the accrued depreciation and permanent value
losses from the corrected cost values and the
tangible fixed assets purchased after January
1, 2005, were reflected with the deduction of
accrued depreciation and permanent value
losses from the cost values.The fixed assets that
have been expected to be used more than one
year, reported in first at cost of value. At the
following periods, they are appreciated with cost
of value. The cost value of the tangible fixed asset
consists of purchase price, import taxes and
non-refundable purchase taxes, the expenses
incurred to make the tangible fixed asset ready
to be used and the interest expenses incurred
during the investment stage of the tangible fixed
asset in question of the credits used for the
purchase of the tangible fixed asset.
The company has been calculated the
depreciation by considering the useful life that
has been denoted at the Law of Tax Procedures.
The normal depreciation has been accepted
as depreciation method and the depreciation
expense has been calculated as prorata
depreciation.
The depreciation methods and rates that have
been used are shown on the left row.
At least in every end of the fiscal period, the
depreciation rates have to be controlled. On the
other hand, it has to be tested in case there is
any impairment at the fixed assets. However,
there has not been happened any operation and
there has not been any group of assets.
2.3.2 Intangible Fixed Assets
Intangible Fixed Assets consist of special
costs, rights and other intangible fixed assets.
Mentioned intangible fixed assets are amortized
in accordance with their predicted life-time.
2.4 Goodwill
In line with the Turkish Financial Reporting
Standards (TFRS) “Business Combinations”
as of January 1, 2005, the difference between
the acquired identifiable assets, liabilities and
contingent liabilities and the acquisition amounts
are recognized as goodwill. The goodwill that
emerges during the business combination is not
subject to depreciation, instead, it is subjected to
value depredation test once a year or when the
conditions point to depredation more frequently.
The Group does not have a goodwill account
under the TFRS 3 “Business Combinations.”
2.5 Impairment Of Assets
In case the carrying values of assets exceed the
estimated recoverable amount, the assets or
cash-generating units are written down to their
recoverable amount and the provision is reflected
to the income statement as an expense.
On the other hand; the recoverable amount of
assets is the greater of net selling price and value
in use. In assessing value in use, the estimated
future cash flows are discounted to their present
value using a pre-tax discount rate that reflects
current market assessments of the time value of
money and the risks specific to the asset.
No such case is detected at the balance sheet
period.
2.6 Borrowing Costs
The financing costs arising due to financial debts
are included in the cost amount of qualifying
assets when associated with the acquisition or
establishment of qualifying assets. Qualifying
assets refers to assets that take a substantial
period of time to get ready for its intended use or
sale. Other borrowing costs are recorded in the
income statement in the period they arise.
2.7 Financial Instruments
Financial instruments consist of following
financial assets and liabilities;
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on
hand, cash in banks and cash in transit.
Cash on hand comprise Turkish Liras and foreign
currency balances Turkish Liras balances are
carried at cost, foreign currency balances are
carried at their TL equivalent values calculated
using the buying exchange rates announced
by Central Bank of the Republic of Türkiye at
the balance sheet date. Buying rates are used
for evaluating foreign currencies in assets and
Selling rates are used for evaluating foreign
currencies in liabilities.
Bank deposits comprise time and demand
deposits and interests of these deposits.
Turkish Liras balances are carried at cost,
foreign currency balances are carried at their TL
equivalent values calculated using the buying
64 TPAO 2010 TPAO 2010 65

exchange rates announced by Central Bank of
the Republic of Türkiye at the balance sheet
date.
Due to the fact that the liquid assets in foreign
currency are exchanged to the Turkish Liras in
effective rate in balance sheet date, the fair value
of these assets are accepted to be equivalent to
their registered value. Cash and cash equivalents
in foreign currencies are translated to Turkish
Liras using the exchange rates at the balance
sheet date. Thus, fair values of these assets are
accepted to be equal to their book values.
Bank Deposits, checks received and registered
value of cash are assumed to be equal with their
fair values as they are disposed of in short terms
and free of the risk of impairment.
Fair value is the amount at any financial
instruments, between two purchased and saled
parts, that has been changed of hands as
cleaned from collusion, primarily, stock market
value of relevant asset, in case the lack of stock
market value the purchase and sale value which
is suitable for the definition is being accepted as
fair value.
Trade Receivables
Trade receivables are financial assets recognized
by direct sale of goods and services to buyers.
Discounted and doubtful receivable provision
deducted values of trade receivables are
assumed to be equivalent to their fair values.
Related Parties
At attached financial statements, scope of
consolidated companies (directly) and the
companies which has been controlled by these
consolidated companies (indirectly), affiliates
and project partners have been accepted as
related parties.
Short and Long Term Bank Borrowings and
Trade Payables
Short and long term bank borrowings are
represented with values of principal and the
accrued interest expenses as at balance sheet
date, discounted by the effective interest rate.
Trade payables are financial liabilities recognized
by direct purchase of goods and services from
suppliers.
Financial Investments
Financial Instruments driven to equity which do
not have any registered value in active market
and its fair value can not be measured certainly
are reported as their cost of value.
2.8 Provisions, Contingent Liabilities and
Obligations
The Group administration, reserves the amount of
the liability in question in the annexed consolidated
financial statements, in cases where there is
a current legal or tacit liability arising from the
past events, the exit of the resources including
economic benefit from the business is possible
for the fulfillment of this liability and the amount
of liability in question can be estimated reliably.
Contingent liabilities are subjected to continuous
evaluation to determine whether the exit of the
resources including economic benefit from the
business has become probable or not. Except
the cases where the possibility of the exit of
resources including economic benefit is remote,
these cases are explained in the footnotes of
the financial statements. When the entry of
the economic benefit to the business becomes
probable, an explanation is made in the financial
statement footnotes about the contingent asset.
In case the entry of the economic benefit to the
business becomes almost certain, the asset in
question and the income change associated is
included in the consolidated financial statements
at the date the change takes place.
2.9 Taxes Calculated on the Basis of the
Company’s Earnings
2.9.1 Corporate Tax
In Türkiye, the corporate tax applied to the
legal tax basis, to be found with the addition of
non-deductable expenses for the commercial
gain of the corporations under the tax laws and
the deduction of the exemptions under the tax
laws, is 20%. Under the Turkish tax legislation,
financial harms can be conveyed for five years
to be deducted from the company's profit to arise
in the future. However, financial harms cannot be
deducted from the profits of previous years. In
Türkiye, the practice of reaching an agreement
with the tax authority for the tax to be paid is
not applied. The corporate tax declarations are
given in the fourth month following the month
the accounting period is closed. The offices
authorized for tax examination can examine the
tax declarations and the underlying accounting
records for five years subsequent to the
accounting period and make re-assessments in
line with their findings.
The companies subject to consolidation are taxed
under the clauses specified in the agreements
which have binding force above the laws for the
projects implemented through these companies.
2.9.2 Deferred Tax
Deferred tax is accounted for using the liability
method in respect of temporary differences
arising from differences between the carrying
amounts of assets and liabilities in the financial
statements and the corresponding tax basis used
in the computation of taxable (statutory) profit.
Mainly, the temporary differences, the gains and
losses in accordance with the decleration of Tax
Laws have been taken root from the accounting
of the different financial statement periods.
Deferred tax liabilities are generally recognized
for all taxable temporary differences and deferred
tax assets are recognized to the extent that it is
probable that taxable profits will be available
against which deductible temporary differences
can be utilized.
The company calculates the tax assets and
liabilities deferred, taking into account the
effects of temporary differences arising from the
different evaluations between the legal financial
statements of the balance sheet times under the
clauses of Capital Markets Board Communiqué
XI-29. The temporary differences mentioned
usually arise due to the accounting recognition
of incomes and expenses in different reporting
periods under the Communiqué and tax laws.
The tax assets and the liabilities relating to
consolidated companies have been reported like
during the consolidation.
Deferred tax liabilities are calculated for
investments in subsidiaries and associates
and for all the associated taxable temporary
differences, except the cases when the Group
can control the removal of temporary difference
and the possibility of the removal of this difference
is low in the near future. The deferred tax assets
arising from the taxable temporary differences
associated with such investments and shares
are calculated on the conditions that benefiting
from the differences in question is highly likely
through making sufficient profit subject to tax in
the near future and that the removal of differences
is possible in the future.
66 TPAO 2010 TPAO 2010 67

2.10 Exploration, Preparation
and Development Expenses
The expenses in oil exploration and production
sector consist of four basic parts, which are:
• Exploration Expenses
• Acquisition Expenses
• Development Expenses
• Production Expenses.
1-Exploration Expenses
The expenses made in the process from the
acquisition of the exploration license to the
commercial oil discovery are generally considered
exploration expenses.
2-Acquisition Expenses
The acquisition expenses are all expenses
incurred to have the oil right.
3-Development Expenses
The development expenses are the expenses
made subsequent to the acquisition of the field
and oil exploration stages.
4-Production Expenses
Production expenses are expenses incurred
in the oil production stage. International
Financial Reporting Standards: 6 Standard for
the Exploration for and Evaluation of Mineral
Resources covers the accounting recording of
only the exploration and evaluation expenses
and does not include the expenses incurred
before the acquisition of the exploration license,
development expenses and the production
expenses.
Exploration and development costs incurred in
Türkiye are charged to income statement as
required by the Turkish Petroleum Law, while
exploration and development expenses can
be recognized in income statement, since the
company has been reporting in accordance
with IFRS, related expenses are accounted
according to successful effort method explained
below. Drilling costs incurred on both ground and
underground improvements (platforms, pipelines
and similar items) as well as expenditure on
machinery, equipment and other fixed assets
related to the oil and gas production activities
are capitalized and depreciated as required by
the circumstances.
The amounts paid for the investments and
interest in joint operation agreements are
capitalized and are amortized on basis of the
income following the discovery of petroleum, in
the case where no petroleum is available the
remaining balance of the investment and/or the
interest in joint operation agreements are written
off to expenses.
Drilling materials such as “casing” is put into
accounts due to consequences of research
activities. If proved reserves are found at the
well, casing cost is capitalized and amortized but
if the well is dry it is written off as expense.
2.11 Petroleum Accounting
Successful Effort Method
The basic assumption in this method is the
capitalization of pre-production expenses with
the discovery of producible oil reserves and
its reflection to the inventoriable cost through
depreciation. In other words, in the Successful
Effort Method, pre-production expenses are
associated with the inventoriable cost if success
is achieved in the exploration activity. The preproduction
expenses incurred for unsuccessful
exploration activities are accepted as period
expenses and are reflected directly in the
income statement. In the Full Cost Method,
which is an alternative to this method, the preproduction
exploration and evaluation expenses
are capitalized and subjected to depreciation
regardless of whether the result was successful
or not.
The Company recognizes the petroleum
research and development costs in accordance
with successful effort method. Development
expenses are the expenses incurred in order to
accelerate the production of petroleum or natural
gas. In case these operations do not achieve the
objective, the amounts should be capitalized.
The petroleum exploration and development
expenses capitalized in case of finding reserves
are subject to depletion by redemption rate found
by dividing the actual production to begining
period total estimated reserve amount.
Estimation of Oil and Gas Reserves
Proved oil and gas reserves which are the key
elements of the Group's operations are the
estimated quantities of crude oil and natural
gas which geological and engineering data
demonstrate in reasonable certainty to be
recoverable in the future years from known
reservoirs under existing economic and operating
conditions. Proved developed reserves are
reserves that can be expected to be recovered
through existing wells with existing equipment
and operating methods. The estimation of oil
and gas reserves are based on the Company
Managements assumptions and expectations.
2.12 Asset Retirement Obligations
The fair value of well abandonment liability is
recorded as a liability when incurred, typically
at the time the assets are installed or placed in
service. Amounts recorded for the related assets
are increased by the amounts of these obligations.
Over time the liabilities will be increased for the
change in their present value and the initial
capitalized costs will be depreciated over the
useful lives of the related assets.
2.13 Employee Termination Benefits
Defined Contribution Plans
According to existing social legislation applied
in Türkiye, the employee deserves claim as
severance of the employee except to quit job
as a reason of resignation and right reasons
and to charge 1 year at work. The Company is
calculating the existing liability as appropriate.
The liability is discounted to present value using
the effective interest rate. All actuarial gains
and losses arising from said calculations are
recognized in the income statement.
Under the updated IAS 19 Employee Benefits
Standard (“IAS 19”) the payments of the type
in question are identified as defined retirement
benefit plans. The termination benefit recognized
in balance sheet liability was calculated according
to the net current value of the amounts of liability
expected to arise in the future as a result of the
retirement of all employees and was reflected in
the financial statements. All actuarial gains and
losses calculated were reflected in the income
statement.
68 TPAO 2010 TPAO 2010 69

Defined Benefit Plans
For defined contribution plans, the Company
pays contributions to publicly administered
Social Security Funds on a mandatory basis.
These payments are decisive.
2.14 Cash Flow Statement
The cash flows of the period are reported through
classification based on main, investment and
financing activities in the cash flow statements.
The cash flows arising from main activities show
the cash flows arising from the Group’s crude oil,
natural gas sales and technical service activities.
The cash flows related with investment activities
show the cash flows used and acquired by the
Group in investment activities (fixed investments
and financial investments). Cash flows related
with financing activities show the resources
used by the Group in financing activities and the
repayments of these resources. Liquid assets
are available cash, demand deposits and other
short-term investments with high liquidity, which
have 3 months or less than 3 months due date
as of their purchase date, can be liquidated
immediately and do not have the risk of significant
value change.
2.15 The Effects of Changes In Foreign
Exchange Rates
In the process of the reporting of consolidated
financial statements of the company in U.S.
Dollars (USD), since the official records of foreign
associates are realized in U.S. Dollars (USD),
there is no foreign exchange rate difference.
Only the official records and financial statements
of the TPAO Headquarters and Regional
Directorates and the TPPD among the companies
under consolidation, which is the subsidiary of
TPIC, are reported in Turkish Lira (TL). The
foreign exchange rate differences that arise
when the mentioned TL financial statements
is converted to the U.S. Dollar (USD), which is
the reporting currency, were classified as equity
capital and transferred to the Group's conversion
fund.
The conversion differences in question are
recorded to the income statement in the period
when the foreign activity is disposed of.
In the conversion of the mentioned TL records
to USD, the year-end exchange rate is used for
balance sheet items and average exchange rate
is used for revenue and expenditure items. The
USD/TL exchange rates in related dates are as
follows.
2.16 Related Parties
If one of the criteria listed below is fulfilled, the
party is considered related with the Group:
(a) If the party in question either directly or
indirectly, through one or more than one
intermediaries:
(i)Controls the Group, is controlled by the
Group or under the joint control with the Group
(including parents, subsidiaries and subsidiary
companies in the same business field);
(ii)Has a share that enables it to have a
significant influence over the Group; or
(iii)Has joint control over the Group;
(b) If the Party is an associate of the Group;
(c) If the Party is a joint venture in which the
Group is a joint venturer;
(d) If the Party is member of the Group’s or its
parents' key administrative personnel;
(e) If the Party is a close family member of any
individual mentioned in (a) or (d);
(f) If the Party is an enterprise that is controlled,
under joint control, or under significant influence
or where any individual mentioned in (d) or (e)
has a significant right to vote directly or indirectly;
or
(g) The Party should have benefit plans
provided following the termination of work for the
employees of the enterprise or an enterprise that
is an associated party of the enterprise.
The transactions with related parties is the
transfer of the resources, services or liabilities
between the related parties, regardless of
whether or not this is against any remuneration.
In accordance with the criterions above, trading
and other transactions with the related parties
that the company determines, are detailed on
the related notes.
2.17 Earning Per Share
The earning per share indicated in the income
statement is found with the division of net profit
with the weighted average number of the equity
shares in the market during the reporting period.
2.18 Post Balance Sheet Events
Post balance sheet events cover all the events
between the balance sheet date and the date the
balance sheet was authorized to be published,
even if they took place following the public
disclosure of any announcements with regards to
the profit or other selected financial information.
In the case that events requiring a correction to
be made occur subsequent to the balance sheet
date, the Group makes the necessary corrections
to the financial statements. When non-adjusting
events occur after balance sheets date, the
Group makes the necessary disclosures in the
relevant period.
2.19 Contingent Assets And Liabilities
A contingent asset/contingent liability is a
possible asset/obligation that arises from past
events and whose existence will be confirmed
only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within
the control of the entity. The Company doesn’t
recognize contingent assets and liabilities.
70 TPAO 2010 TPAO 2010 71

TPAO and its Subsidiaries Consolidated Balance Sheets as of
December 31, 2010 and December 31, 2009
Assets
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Other Receivables
Inventories
Other Current Assets
Non-Current Assets
Other Receivables
Financial Investments
Investments Evaluated with Equity Method
Wells
Tangible Assets
Intangible Assets
Deferred Tax Assets
Other Non-Current Assets
Total Assets
2010 2009 2010
2009
2,793,155
2,090,279
Liabilities
1,998,505
-
268,267
8,044
308,067
210,272
4,213,977
93,701
51
26,102
1,017,207
2,812,543
174,177
11,537
78,658
7,007,131
(thousand USD*)
TPAO and its Subsidiaries Consolidated Balance
Sheets as of December 31, 2010 and December 31, 2009
(thousand USD*)
1,513,378
-
208,569
34,077
212,135
122,119
4,073,178
97,747
53
17,288
1,010,487
2,630,648
171,493
10,229
135,253
6,163,457
Short-Term Liabilities
Financial Liabilities
Trade Payables
Other Liabilities
Tax Liability
Other Short-Term Liabilities
Long-Term Liabilities
Financial Liabilities
Other Liabilities
Debt Provisions
Provisions for Employee Termination Benefits
Other Long-Term Liabilities
Shareholder's Equity
Shareholders' Equity of Parent Company
Paid-in Capital
Foreign Exchange Differences
Profit Reserves
Retained Earnings/Loss
Net Income / Loss for the Period
Total Liabilities
* The Central Bank Buying Exchange Rates for the end of 2009 and 2010 are 1,5057 TL and 1,5460 TL
72 TPAO 2010 TPAO 2010 73
1,014,894
208,737
133,722
428,117
26,534
217,784
651,586
33,524
51
353,974
113,801
150,235
5,340,652
5,340,652
980,348
151,662
1,064,255
1,791,570
1,352,816
7,007,131
480,865
85,296
150,524
82,886
29,577
132,582
757,366
107,839
51
411,619
97,519
140,338
4,925,226
4,925,226
980,349
205,188
972,273
2,378,380
389,036
6,163,457

TPAO and its Subsidiaries Consolidated Income Statement for
the year ended December 31, 2010 and December 31, 2009
Sales Income
Cost of Sales (-)
Gross Profit (Loss)
Marketing and Sales Expenses (-)
General Administrative Expenses (-)
Research and Development Expenses (-)
Other Operating Revenues (-)
Other Operating Expenses (-)
Operating Profit (Loss)
The Investment's Shares in Gains/Losses
Appreciated with Equity Method
Non-operating Financial Revenues
Non-operating Financial Expenses (-)
Continued Operations Before Tax Profit (Loss)
Continued Operation of Tax Profit (Loss)
Tax losses for the period
Deferred tax gains (Losses)
Net Income (Loss)
2010 2009
2,850,823
2,026,284
1,424,624
1,426,198
123,291
257,022
166,395
657,664
86,073
1,451,081
(thousand USD*)
954,172
1,072,112
124,210
248,266
194,892
191,559
92,961
603,341
1,545 -7,928
348,172
320,707
1,516,090
163,274
177,269
13,994
1,352,816
102,259
211,923
485,749
96,713
104,889
8,176
389,036
* The financial statements have been translated from TL to USD with the average rates for the end of 2009 and
2010 are 1.5090 TL and 1.5259 TL.
Financial Ratios Derived From Consolidated
Financial Statements of TPAO for 2010
Current Ratio (Working Capital Ratio) = 2.75
Acid - Test Ratio = 2.45
Liquidity Ratio (Liquid Assets Ratio) = 1.97
Financial Leverage = 0.24
The Ratio of Equity to Total Assets = 0.76
The Ratio of Equity Capital to Liabilities = 3.20
Gross Sales Revenue / Net Sales Revenue = 0.50
Net Profit / Total Assets Ratio = 0.19
74 TPAO 2010 TPAO 2010 75

CONTACT INFORMATION
Headquarters
Turkish Petroleum Corporation
Söğütözü, 2180 th Avenue No: 86,
06100 Çankaya - Ankara / TÜRKİYE
Phone: +90 312 207 20 00
Fax: +90 312 286 90 00 - 286 90 01
e-mail: tpaocc@petrol.tpao.gov.tr
web: www.tpao.gov.tr
TPAO's District Managements
Adıyaman District Management
02040 Adıyaman / TÜRKİYE
Phone: +90 416 227 28 11
Fax: +90 416 227 28 07 - 18
Batman District Management
72100 Batman / TÜRKİYE
Phone: +90 488 213 27 10
Fax: +90 488 213 41 49 - 213 39 14
Trakya District Management
39750 Lüleburgaz
Kırklareli / TÜRKİYE
Phone: +90 288 417 38 90
Fax: +90 288 417 22 03
TPAO's Subsidiary
TPIC, Turkish Petroleum
International Company
Söğütözü Avenue, No: 27,
06520 Ankara / TÜRKİYE
Phone: +90 312 285 44 55
Fax: +90 312 285 38 09
e-mail: tpican@tpic.com.tr
TPAO's International Offices
Azerbaijan TPAO / TPIC / TPBTC Office
340 Nizami Street, 370000 ISR Plaza, 4 th Floor
Baku / AZERBAIJAN
Phone: +99 412 498 95 26 - 493 14 98
Fax: +99 412 498 14 35
e-mail: info@tpao-az.com
TPOC Libya Office
Al Fatah Tower 1, 9 th Floor, No: 91
Tripoli / LIBYA
Phone: +218 21 335 14 94 - 335 14 96 - 97
Fax: +218 21 335 14 95
e-mail: tpoc@tpoclibya.com
TPOC Iraq Office
Baghdad Al – Wazereyah 301 Section 5 th St.
No:6 Baghdad / IRAQ
Phone: +90 312 207 20 00 / 18 58 - 18 59
e-mail: otekeli@tpao.gov.tr
KazakTurkMunai Ltd. Joint Company
Business Center “Okan Inter-Continental”,
Abay Avenue, 113, 473000,
Astana / KAZAKHSTAN
Phone: +7 7172 39 10 25
Fax: +7 7172 39 10 26
e-mail: ktm@aktm.kz

www.tpao.gov.tr