Turkey State Oil Company Plans IPO in 2017 as Iraq Adds to Value

Turkey’s state oil and gas producer plans an initial public offering in 2017 as it expects current exploration in Iraq and Afghanistan to lift its value by then.

Turkiye Petrolleri AO hired Is Yatirim Menkul Degerler AS, the nation’s biggest investment bank, to help sell as much as 5 percent on Borsa Istanbul and more shares in London or another exchange, acting Chief Executive Officer Besim Sisman said.

The company plans to expand in the Mediterranean as Turkey makes it easier for foreign rivals to explore and drill in local fields. TPAO, as it is known, reported $636 million of profit on $2.5 billion of sales last year without providing 2012 figures. Turkey imports more than 90 percent of its gas and crude needs.

“We’ve almost completed a reorganization plan to transform the company for the next 10 years and help it focus on its core business while it plans to grow both in Turkey and through international operations,” Sisman said in Istanbul yesterday.

The company plans to get globally recognized accreditation for its reserves by June or July to clarify its value, he said. TPAO has set aside almost $3.1 billion this year for exploration and other investments, including $1 billion for Turkey. The total budget may rise to $3.5 billion if needed, Sisman said.

The company, with interests in Iraqi oil and gas production through joint ventures, also plans to start drilling work this year on the country’s Badra and Missan oilfields and Mansuriyya and Siba gas fields with its partners, Sisman said. The partners include Gazprom OAO, Korea Gas Corp., Petroliam Nasional Bhd. of Malaysia, Kuwait Energy and CNOOC Ltd., TPAO’s website shows.

Iraqi Oil

Surface facilities valued at about $1.5 billion at Iraqi sites will be auctioned this year, according to the CEO. The company also plans to start drilling this year in the Mazar-i Sharif field in Afghanistan with partners Dragon Oil Plc and local company Gazanfar and has another field in Sandikli.

TPAO is in talks with Exxon Mobil Corp., OMV AG and MOL Hungarian Oil & Gas Plc on the Yassihoyuk block north of Istanbul, Sisman said, and it plans to drill two wells there.

“We believe we have gas in the western parts of the Black Sea and crude in the eastern regions,” Sisman said. TPAO failed to find hydrocarbons in the region in ventures in recent years with companies such as Petroleo Brasileiro SA and Chevron Corp.

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