TPAO on the hunt

Acquisition plans: TPAO chief executive Besim Sisman

Turkish Petroleum (TPAO) is actively searching for acquisitions worldwide but with a special emphasis on projects around its own neighborhood in Central Asia and in central Africa as it looks to increase both its production and it technical expertise.

Last month, TPAO picked up an additional 10% stake in the Shah Deniz gas project, making it the second-largest shareholder with 19% behind operator BP and chief executive Besim Sisman said his company plans to continue its shopping spree in the area.

"We are interested in another project in this region - our region," he told Upstream at an exclusive interview during the World Petroleum Congress in Moscow. "You need to focus in your area."

But the company's aggressive growth aspirations are not limited to projects in Central Asia.

"On the other hand, we have some opportunities from Argentina to Malaysia," Sisman said."We are negotiating with some companies and some governments, especially in Africa. Africa is one of our main focus areas."

TPAO currently holds acreage in Libya but development there is on hold indefinitely due to the violence and instability plaguing the country and Sisman said the company would be reticent to take on additional stakes in North Africa.

Instead, TPAO is looking at the heart of the continent.

"The middle of Africa, from the eastern side to the western is so exciting," Sisman said.

"We are searching. We are negotiating with companies, with governments and we will see what we can do in the future. We are very very interested in that region. One area the company is not currently looking is in the US and Canada, where many international companies have taken stakes in shale and tight gas projects."

If want to be an international company (in North America) you have to open an office in Houston," Sisman said.

"I think we have to start at this point and after that we can look around if it is possible to take some project in the US or not."

State-controlled TPAO has a mandate from the government to boost production to meet growing demand in energy-starved Turkey.

Turkey exhibited some of the strongest economic growth coming out of the global recession and its economy is projected to expand by more than 4% this year.

At the same time, the country is paying around $50 billion per year to import energy – relying on imports for 98% of its natural gas and 90% of its oil.

"We need to meet our energy demand or a very important portion of our energy demand," Sisman said.

"It is first turning its attention to meeting oil demand."

Generally, we prefer oil projects but if there is a good natural gas or shale gas project that is possible for us," Sisman said.

While many of the projects it is screening are minority stakes, Sisman said TPAO would have little problem accessing the cash needed to pull off a larger acquisition.

"Economically, Turkey is strong enough so if you have a good project its not hard to find money from different banks and investors," he said.

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