SPE Turkey Section


HISTORY OF PETROLEUM

PETROLEUM IN THE WORLD

It is well known today through various sources that human being's knowledge of petroleum and its usage for various purposes is going back to before thousands years. When subject sources were examined it is found out and learned that asphalt had been used as chemical additive for cement at the construction industry, as insulation material in ship-building in the years of 3200 B.C.. It is also observed through historical records that; in the years of 300 B.C., asphalt had been used in mummying processes.

At the end of l3th century, Marco Polo who travelled to the near and far east had described liquid asphalt at Baku and had also indicated that Petroleum was being dealt with as commercial good and even though carried in the bags made of animal skin.

On the other hand, the usage of the petroleum because of its flammable nature is also going back to the historical past. Evidences are available indicating that the crude oi1 had been pretty extensively used as illumination substance B.C. in China and A.C. in the Middle East and European Countries such as Rome, Iran and Greece.

It's easily flammable nature had also caused the usage of Petroleum as arms in the old centuries as well as it is being used today for the same purpose.

As a result of the archaeological studies conducted in todays world. it has been found out that the petroleum had also been known by the inhabitants of the continent of America prior to the discovery of the land. Is also considered as almost certain that the lanterns, alighting in the temples of the Indians were containing a mixture of substances including the petroleum.

However, having the Petroleum born as an Industrial Sector which has stamped its importance to the 20th century had happened in the middle of the l9th century. Canadian Abraham Gesner's refining gas oil out of petroleum, leaking out of the earth in the middle of 1800 years is considered as the symbol of the creation of the petroleum industry. In fact, the production of gas oil had become a real revolution in the field of illumination and a great amount of demand had been raised for gas oil in a very short time period.

Increasing demand for the crude oil, as a result of the stard of the gas oil production had caused in need for the additional petroleum production out side the resources occurring as a result of the petroleum leaking out of the earth and thus a new frontier of the petroleum industry had come out.

The first petroleum exploration activity in the world taken place in the state of Pennsylvania of the United States of America, towards the end of 1850'ies and conducted by a company called "Pennsylvania Rock Oil Company". In those years, the petroleum was coming out of the earth through water springs and salt cells and named as "Rock Oil", was being collected by having it absorbed by the clothes and used as medicine. It was also known that it could be used for illumination. In those dates, besides vegetal fats, oil obtained from cool and manufactured gas which necessitates an expensive production facility were being used for illumination.

Lawyer, George Bissel and his two partners, who considered to expand the usage of rock oil in the illumination and to illuminate all America and thus to make themselves very rich in case of the exploration of rock oil in great amounts, asked Benjamin Silliman jr., professor of chemistry in the Yale University, to analyse the rock oil. The purpose of such requirement was to impress the public with the written report of a very famous Professor in order to raise sufficient financial resources to the company they intended to establish. The analysis were sharing that as a result of the treatment, the gas oil which possesses a very good quality for illumination could be obtained. The partners by publishing this report obtained a great interest and thus provided required financing for the company they established, called "Pensylvania Rock Oil Company". In 1856, Lawyer George Bissel had seen the Salt Exploration Rigs on the label of a rock oi1 bottle which was on sale as a medicine on the window of a drug store in Newyork. Salt exploration had being conducted in China since 1500 and it was possible to go down to 1000 meters. This method had been brought to the Europe and started having been applied in 1830. In 1857, one of the partners, banker James Townsend had met Edwin L.Drake and had talked about rock oil with this person. Drake who was working as conductor in the railways at the time and who had worked in various different jobs previously had thought that he could have managed to explore petroleum through salt exploration method and had bought the shares of the company. Drake had been given the duty of going to Pensylvania and obtaining a licence for a land with a petroleum water spring by the partners. Owners of the company had introduced Drake as Colonel Drake in the introductory letters they had written to the authorities around Titusville in order to present him as an important person and such policy had worked out very successfully. Drake had managed to obtain a licence in a farm in the town of Titusville on the Oil Creek where 6 gallons of petroleum can be obtained per day out of the existing water spring, on its land. Colonel who really believed that significant amount of petroleum could be obtained through drilling, had started to build up a steam machine for exploration after he had explained the case to his partners. By the time he reached an agreement with a blacksmith, named William A.Smith to carry out the drilling. After the drilling had started on 1st May 1858, resources of the company had been finished in a relatively short time period. Banker Townsend had sent the instruction of stopping the drilling to Drake by the end of August 1859. Before Drake had received such instruction on Saturday afternoon, 27th August, while the well had being drilled on 69 feet, the well had encountered a crack hole and the well had slide down for another 15 cm.. Drilling had been stopped for the weekend. Driller William, when he came to control the well, had seen a black liquid when he looked through the pipe. On Monday, when Drake came to the well had seen that all empty barrels around were full of petroleum and William and his assistants were protecting the well and the barrels carefully. Drake had mounted a press vacuum water pump to the well and had started to obtain petroleum by hand. Thus the first time in the world petroleum production out of subsurface had been realized. This success of Drake constitutes the second revolution in the petroleum industry after the discovery of the gas oil.

Having seen the possibility of producing petroleum through drilling had started the "attack to petroleum" in the United States of America in a very short time period. Lots of businessman had participated in the investment activities in this new industrial sector and within a very short time period like 3 years, total petroleum production had reached to the level of 3 million tones.

Till the beginning of 1900'ies United States of America had no competitor in the petroleum industry. However, commencing from such period, new competitors from various parts of the world has started coming out. The most important producer of the period outside the United States of America had become Russia with the production made at Baku.

Though the existence of the petroleum at Baku had been known years ago, the first production in this region had started after 1877. Having Russia as a producer in the loop, first time in the world a serious competitor for the United States of America had come out.

Such production being made in Azerbaijan had shown a very rapid and important development within a very short time period. In 1890'ies, the fields of Russia had become more productive than the fields of Pennsylvania. In 1885, Russia was in the level of 2/3 of the total production of the United States of America.

Wealth of the Middle East in terms of petroleum had been discovered after the Second World War and the extensive production in great magnitudes had been realized after such period. Middle East petroleum had been controlled by the big western petroleum companies just as the petroleum fields in the other parts of the world.

The first and most important movement against the control of the western petroleum companies on the Middle East Petroleum had been realized with the establishment of OPEC (Organisation of Petroleum Exploration Companies). Prior to the establishment of OPEC, the petroleum producing countries of the Middle East had been trying to negotiate with the western companies on their own for the protection of their rights individually, whereas after the establishment of OPEC they had become to establish a unity against those companies.

 

PETROLEUM IN TURKEY

I- PERIOD BEFORE THE REPUBLIC

Petroleum activities were performed in the regions of Iskenderun, Thrace, Mosul, Erzurum and Van during this period.

Iskenderun region

Towards the end of the l9th century, the outskirts of Çengen near Iskenderun was the first place which was the scene of petroleum exploration activities by drilling, within the boundaries of Ottoman Empire. It is understood from a firman (an Imperial Decree) published in 1887 that the petroleum concession of this region was granted to Grand Vizier Kamil Pasha. This concession was later transferred to a person named Ahmet Necati.

It is known that a German-English Company drilled in the same region approximately 10 shallow wells where small quantity of natural gas encountered but the activities were suspended because of the negative result and the concession was cancelled.

Thrace rcgion

The second place, which was the scene of petroleum exploration activities by drilling, was the outskirts of Mürefte and Sarköy in Thrace region.

In the year 1882, a person named Cavit Bey explored for petroleum with a small drilling unit. His activities resulted in failure and his concession was cancelled.

In the year 1897 the concession of this region granted to Halil Rifat Pasha by a firman and in the year 1898, some wells near Ganos were drilled by the crew brought from Romania, but very minor gas oil shows were encountered. In the same region, Ottoman Bank had caused the drilling of some more shallow wells and a 403 meters deep well was considered a deep well at that time, but had not encountered petroleum in economic quantities.

In the year 1914 Standart Oi1 Company performed geological investigation near Mürefte-Hoskoy. In the same year, concession for the same area was granted to a person named Thomas, however he had to stop his activities because of the First World War.

Mosul region

During the Ottoman Empire time, the petroleum resources in Mosul region were operated from the wells drilled by primitive hand drilling methods by the landowners on the basis of "Iltizam", a contract awarded by the government to preferred persons. The petroleum sources inhere were continued to be operated on the same contract basis after the area was owned by Sultan Abdülhamit's own treasury by firmans dated 1898-1899. However, following the proclamation of the Constitution, the petroleum rights in Mosul was transferred and alienated by the Sultan to Constitutional Government.

The right to investigate for petroleum and other minerals within 20 km.s on each side of Istanbul-Bagdat railway was granted to a German Bank called Deutsche Bank in 1903 in relation with the concession regarding Istanbul-Bagdat railway, for a period of two years. At the same time an English citizen named William D'Arcy applied to the Ottoman Government to obtain concession.

The foreign investment companies, with their long histories, have formed in March 9, 1914 a company called "Turkish Petroleum Co.". The share distribution of this company was as follows:

Deutsche Bank

25 %

Royal Dutch

25 %

Anglo Persian

50 %

The First World War was declared, just before the Ottoman Government was going to grant this company permission to explore for petroleum at Mosul region. As a result, the company could not perform any activities.

At the end of the war, the share distribution of this company was as shown below according to the San Remo Agreement concluded by the Allied Countries.

Anglo Persian

23.75 %

Royal Dutch

23.75 %

French Petroleum Co.

23.75 %

Standart Oil Co.

11.875 %

Socony Vacum Oil

11.875 %

Gulbekyan

5.00 %

Erzurum and Van regions

Geological investigation of these regions were performed and an attempt was made at production by way of drilling and opening galleries at Hasankale and Kürzot by the Russians, on behalf of South Caucasia Railroads, during the years of occupation (1916-1917) in the First World War. This attempt failed because no commercial amount of petroleum was encountered and also because of the revolution in Russia.

II- PERIOD OF REPUBLIC

1. Up to the year 1954

During this period, the government preferred as a principle, to conduct the exploration of petroleum possibilities within the boundaries of Turkey by herself.

In the year 1925, an expatriate geologist named Mr.Lucius was hired, and he performed on behalf of the government, the geological investigation of all the areas at various known to have oil shows. These investigations lasted for 2 years.

In accordance with the petroleum law no. 792 enacted on March 26,1926; the right to explore and produce all petroleum and petroleum compound related materials within the boundaries of Republic of Turkey, was given to the Government with the proviso that the conditions stipulated in Mining Law shall be abided by.

In the year 1930, a group of technicians, in which Turkish engineers and geologists took part for the first time, conducted geological investigation of the regions in the country where petroleum possibilities and probabilities existed, for a period of one year. The group, which conducted this investigation, consists of Dr.Lucius, Cevat Eyüp Tasman and Kemal Lokman.

There were no serious activities until the establishment of "Petroleum Exploration and Operation Management" by the Law Number 2189 on May 20,1933. This establishment again conducted geological investigation of all regions where the petroleum possibilities and probabilities were expected, by two American geologists and one Swiss palaeontologist. These investigations continued for 1 year. As the result of these investigations first time in the history, the decision to drill a deep well was taken. This was the well named BASPIRIN-1 exploration well drilled by a cable system drilling unit between the dates of October 13,1934-June 15,1936 near Baspirin location of Midyat township of Mardin province. The well was abandoned as a dry hole at the depth of 1351 meters.

Mineral Research and Exploration Institute (HTA) was established by the Law no. 2804 dated June 20,1935. Petroleum Exploration and Operation Management was attached to this Institute under the name of "Directorate of Petroleum Group" and petroleum exploration activities continued throughout the country, without any intervals.

Iskenderun region

Following the general geological investigation and geophysical studies in the region, in the year 1940, two wells drilled near Ekver village within the boundaries of Arsuz township. In the years of 1944-1945, 3 structural wells were drilled near Çengen. Following the drilling of the wells geological studies were conducted and 3 new walls were drilled but no positive results were achieved.

Thrace region

In the year 1935, around Hoskoy near Mürefte, 4 structural wells with a total depth of 355 meters were drilled. Petroleum shows were encountered in these wells and 9 shallow wells were drilled in the years of 1936-1937 around Mürefte area. There was a strong and continuous gas flow from No.1 well and a gas flow which continued 18 hours at No.3 well which were drilled by Star drilling unit. Oil shows that were not significant were encountered in the other wells. The gas which was encountered at well No.l, was 85 000 cubic meter with 5 atmospheric pressure in the first day but then reduced to 17 000 cubic meter and dried out completely at the end of 2nd month.

In 1938 a well was drilled down to 371 meters near Kabahöyük in Hayrabolu township was abandoned because of lack of shows.

Van region

In the year 1938, petroleum exploration activities were conducted by using drilling and gallery methods and 2 wells were drilled near Kürzot village of Muradiye township in Van province and the wells were abandoned as dry holes with oi1 shows. Although lot of efforts were spent in intervals by using gallery method for petroleum production, but production could not be realized.

Adana region

Near Hoca Ali village, which is 12 km's southeast of Adana, 3 structural wells were drilled following the geological and seismic survey and in the year 1938, a deep well by using rotary system drilling unit, was drilled. Gas shows had been encountered at a11 these wells. This region was evaluated by additional geological and geophysical surveys and up to the year 1954, 5 more deep wells were drilled without any successful results.

Southeast Anatolia region

One each well was drilled by cable system drilling unit brought from Baspirin well at Hermis and Kerbent, and in Hermis and Gercüs one each well was drilled by rotary system drilling unit. None of these wells had petroleum in commercial size, which is more than the oil shows.

The first economic and commercial oil discovery in our country was made in Raman. Geological investigation of this region was first conducted in the summer of 1935 and later continued to these investigations in the years l937 and 1938 and Raman-1 well at Maymune Pass on Raman Mountain was spudded on July 24,1939 by using cable system unit.

On April 20,1940, petroleum was discovered at Raman-1 well at the depth of 1048 meters and the well was completed on June 6,1940 at 1052 and production was started by pump. The daily production was 10 tons with 20.8 API gravity of petroleum.

The drilling unit was moved to another location and 3 more wells were drilled at Maymune Pass, 2 of which with cable and the other one with cable and rotary (combination) system drilling unit, however only well No.5 was a discovery with a production of 1 ton per day.

An experimental refinery was set up with the name "Maymune Pass Refinery" in the year 1942 with 3 tons daily capacity in order to refine the crude oil produced from the wells No.1 and 5 at Maymune Pass for the utilisation of petroleum in drilling rigs and vehicles. The necessary boilers, distillation equipment etc. which were assembled in this experimental refinery were chosen from the parts of the Bogazici Refinery (*) which ware dismantled and stored in Diyarbakir. The first commercial discovery was at Raman-8 well, which was completed at the end of the year 1945. However for a long time there was no production because of the lack of tanking capacity. The capacity of the experimental refinery was expanded to 9 tons per day in the year 1947, and in July 1948 the construction of Batman Refinery with a capacity of 200 tons per day commenced because of the increase in the production. This refinery was in operation on November 1948.

Following the discovery of Garzan field in the year 1951, the construction of modern Batman Refinery with a yearly capacity of 330 000 tons was decided and the refinery was completed in the year 1955.

Up to 1954, 84 million liras were spent for the petroleum exploration activities in Turkey and 37 exploration, 7 appraisal, 13 production and 19 geological investigation wells which totalled to 76 wells, were drilled in this 20 years period and a total of 76 402 meters were drilled in this period, with a total production of 95 881 tons.

(*) The Bogazici Refinery was imported from Romania and was set up in 1930 near Umuryeri in Beykoz, Istanbul, by Yasua Brothers for the company established under the name "Türkiye Neft Sanayii A.S.". The refinery with 40 tons daily capacity, refining crude oil imported from Romania was active between the years 1930 to 1934 and closed down in 1934. MTA bought the refinery for 25 000 Liras in 1940, dismantled and transferred the same to Diyarbakir warehouses.

2. From 1 954 to today

Due to the result of increased need for petroleum and the inadequacy of exploration activities, a new "Petroleum Law" numbered 6326 was enacted in March 7, 1954, and thus a new period was started in the petroleum policy which provided the exploration activities to be handled by local and foreign private investors. In accordance with new Petroleum Law "Türkiye Petrolleri A.O." was established in March 7, 1954 by law no. 6326 and all the related divisions of MTA was transferred to this new enterprise. The administration and control of the application of the Petroleum Law was given to "Petroleum Administration" which was established in accordance with the Petroleum Law no.6326. Later on, some articles of the Petroleum Law no.6326 were amended and new articles were added to the same by laws numbered 6558 on May 13,1955; numbered 6%7 on May 21,1955; numbered 1702 on April 5, 1973 and numbered 2808 on March 28,1%3. According to the law numbered 1702, The Petroleum Administration was changed to "General Directorate of Petroleum Affairs". This is the period when foreign petroleum companies started to come to Turkey and become active.

Between 1954-1993 years, at different time period, totally 148 petroleum companies, 129 foreign and 19 domestic, have carried out exploration activity in Turkey. 14 of the foreign companies were involved in exploration activities twice at different times. At this period, 2035 exploration licences and 49 production leases covering 973 114 km2 have granted. At the end of 1993, companies have 257 exploration licences covering 128 630 km2.

From 1934 to the end of 1993, total number of wells drilled in Turkey are 2676 and total footage is 5 286 700 meters.

At the same time period, a total of 87 petroleum fields were discovered, 2 of these discoveries belong to MTA, 49 to TPAO, 30 to foreign companies, 5 to TPAO+foreign companies joint ventures and 1 to other domestic company and total of 13 natural gas fields discoveries, 8 belong to TPAO and 5 to foreign companies, were made.

 

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