Shell and TPAO Sign Exploration Deal

Royal Dutch Shell plc and Turkey's state oil company have signed a gas exploration deal to search for gas onshore in Turkey and offshore in the Mediterranean Sea.

Sabah daily reports on November 16th that the Turkish Petroleum Corporation (TPAO) and Shell had agreed in principle to a deal.

The deal will be of mutual benefit to Shell and the state-owned and operated TPAO, with both companies sharing in any findings made. Shell will finance the offshore exploration project at a cost of approximately $300 million (USD), as well as the transferring the necessary rigs to the exploration areas.

"Shell and TPAO will share output equally if we find oil or gas," chief executive of TPAO Mehmet Uysal said. "As production increases, the TPAO share will also increase."

The agreement will the companies searching for gas offshore from the Turkish region of Antalya as well as onshore in the southeast of Turkey in the region of Diyarbakir.

"God willing, we will reach important signs and with these signs ... TPAO, will reach gas and oil discoveries," the Associated Press reports Turkish Minister for Energy and Natural Resources Taner Yildiz as saying.

The minister dismissed speculation that the deal was in response to Cyprus's current exploration efforts in the Mediterranean Sea with Noble Energy Inc. Turkey has refused to recognise Cyrus's authority over the exploration area, causing tensions between the two countries.

"This signature is the result of technical work, which has nothing to do with international speculation," Yildiz said.