GENERAL DIRECTORATE OF PETROLEUM AFFAIRS

 

 
 
 

 

PETROLEUM REGULATIONS

 

PART ONE

 

General Provisions

 

Scope

 

Article 1- The principles relating to the maintenance, correction, amendment, cancellation of the petroleum register and records, and to the designation and announcement of the petroleum districts and open areas; the transactions relating to the method of application for acquiring petroleum rights, the documents to be attached to the petition containing the shapes thereof, the contiguity of the petroleum areas, the marking of the boundary points, the appeals from the actions taken with respect to permit, exploration license, lease, certificate, transfer and limitation, the awarding of leases through competitive bidding, the obligations of the petroleum right holder, taxation, imported economic assets, revenues and transfers arising from the sale of petroleum, the transactions in connection with imports and exports and other principles and procedures relating to the application of the Petroleum Law are set forth in these Regulations.

 

Definitions

Article 2- The terms used in these Regulations have the following meanings:

 

  • Refinery means installations for the manufacture of petroleum products from crude petroleum or the installations used for processing the same, together with their power plants, machine shops, storage tanks and similar installations,
  • Pipeline means crude petroleum lines, product lines or gas lines and the related installations, exclusive of the gathering lines serving for gathering of petroleum between producing wells, and fuel lines serving for the distribution of the fuel necessary for the petroleum field,
  • Taxation Period means a calendar year or a twelve month particular period designated, upon request, by the commencement or abandonment of operations, a period of activity less than one year,
  • Depletion Allowance means the total of exploration expenditures, intangible drilling expenses and the cost of drilling non-economic wells which are activated by the petroleum right holder by being charged to the capital account,
  • Minister means the Minister of Energy and Natural Resources,
  • Law means the Petroleum Law No. 6326,
  • Deputy Ministry means the Deputy Ministry of Treasury and Foreign Trade,
  • General Directorate means the General Directorate of Petroleum Affairs,
  • General Director means The General Director of Petroleum Affairs.

 

Ownership

 

Article 3- The portion of the oil produced from the license or lease area remaining after the amount decided by the General Directorate to be taken as Royalty in kind is considered the property of the petroleum right holder.

 

General Authorities

Article 4- The General Director, obtaining the approval of Minister also, if necessary,

  • Determines the procedures and principles relating to permits, exploration licenses, leases and certificates,
  • Is responsible for the actions relating to notifications, announcements and registrations required by the Law and the Regulations. Determines which transactions, outside of those, which are required by the Law and the Regulations to be published in the Official Gazette, should means of notification. Collaborating with the proper authorities, helps in accelerating the transactions which accelerating the transactions which are assigned by the Law and the Regulations to other authorities and administrations,
  • May take initiatives, when requested by those concerned, with the other departments for expediting and finalizing the applications filed with the said departments for purposes which are related to petroleum rights or activities, but are beyond the scope of the authority of the General Directorate,
  • Makes arrangements to display in detail the form and the contents of such documents as the applications, reports, maps, samples, declarations, forms and their enclosures submitted by the petroleum right holders and applicants.
  • Serves notices, in the cases when there is no clear stipulation in the Law or in these Regulations, in writing and in accordance with the Law on Notifications, regarding the requests, warnings, announcements and decisions which he wants to transmit to the applicants or to the petroleum right holders. My determine, in accordance with the nature of the subject, the suitable amount of time and require those concerned to observe it, in cases when no particular time is specified in the Law or in the Regulations for serving notices.

 

Authority for Inspection

 

Article 5- The General Director is authorized to, personally or through technical, administrative or Inspection Department personnel whom he shall designate, inspect or have inspected all transactions of the petroleum right holder relating to petroleum rights and activities, audit or have audited the documents and records of incidents involving petroleum activities, and or to take or have taken copies of the records, accounts, reports, or other documents, to request samples, to conduct examinations and tests.

 

The inspection of the operations, samples, documents, records, and reports shall be carried out during working hours. The petroleum right holder is obligated to cooperate in all respects with the functionaries during inspection. In case of request by those concerned, the inspection personnel shall show their documents of authorization.

 

The above authorities may be exercised by the Minister also, if necessary.

 

Authority Relating to Protective Measures

 

Article 6- The General Director may demand from the petroleum right holders;

 

To take more extensive or new measures if he finds in sufficient the measures relating to the preservation of the petroleum resources, prevention of waste, operation of the petroleum fields, with diligence, safety of the personnel at the site or damage to the environment,

 

To take all precautions to prevent flow of fluids from the well to the surface or from the surface into the well and from one formation into another during the drilling, completion, production and development operations at the wells,

 

To take more extensive or new measures if he finds insufficient the measures for preventing over-production from the wells and reducing it to an acceptable level.

 

These authorities may be exercised by the Minister also, if necessary.

 

Representing the Minister

 

Article 7- In the lawsuits initiated before the Council of State against the decisions of the Minister the Legal Advisor of the General Directorate shall represent the Minister individually or together with those appointed by the Minister.

 

PART TWO

Petroleum Register and Petroleum Districts

 

SECTION ONE

Petroleum Register and Registration

The Petroleum Register

 

Article 8- The Petroleum Register shall consist of a Main Register and the plans, projects, along with a book of Applications and Transactions, which provide the support for the records to be entered into the Register and a Book of Permits.

 

In addition, petroleum right holders register, register for limitations imposed on the petroleum rights, a register for corrections and a daily register shall be kept.

 

Main Register

Article 9- The Main Register shall be kept on basis of plans, projects and documents and shall consist of three parts covering exploration licenses, leases and certificates.

 

The following shall be recorded in the Main Register:

 

  • Identity of the right holder,
  • Nature of the right, manner of acquisition, commencement date thereof.
  • Petroleum district, province, township within which the land relating to the right is located, the surface area and the boundaries thereof,
  • Term of the right and extensions,
  • Date of termination of the right and the causes of termination such as expiry, relinquishment, cancellation, legal lapsing,
  • Modifications of the right,
  • Other rights and limitations, imposed on the right, the types thereof and whose favor they are entered and the dates,
  • The transfer of the right, the transferee and the date of transfer,
  • Installations of the lessee which are annotated in the lease section and which fall within the scope of the certificate, recorded in the certificate section,
  • Special conditions, if any, entered in the document granting the right,
  • Surface rights.

Book of Applications and Transactions

 

Article 10- In the Book of Applications and Transactions shall be recorded: the nature of application filed for the acquisition of exploration license, lease, certificate and the petroleum rights arising there from, the identity of the applicant, the recordation date and the number of the application in the book of incoming correspondence, actions taken regarding applications, objections to these actions, actions taken on the objections and the dates thereof, and other data as deemed necessary by the General Director.

 

Book of Permits

 

Article 11- In the book of permits the following shall be recorded: The number given to the permit, the district, commencement date and the duration, dates of extensions and expirations, the identity of the legal person as the permit tee, its had office, the name and address of its representative, special terms and conditions, along with the date and number of the application.

 

Book of Registration of Petroleum Right Holders

 

Article 12- The identity of the petroleum right holder, citizenship, address of the head office, the name and domicile of its representative in Turkey, the date and the number of its registration in Turkey shall be recorded in this Book.

 

Daily Book

 

Article 13- The Daily book consists of two sections : the book for recording applications and the book of case numbers.

 

In the section of the book for recording applications, the title of the applicant, the subject of the application, the date and the number in the book of incoming correspondence, area designations and the surface areas shall be recorded.

In the section of the book for the case numbers, the page number of the book of applications and transactions, the case number, district and area designation, the subject of the application, the date and the surface area shall be recorded.

 

Register of Limitations

 

Article 14- In the register of limitations, the nature and the owner of the petroleum right on which limitation is imposed, the nature and the duration of the limitation, the person in whose favor and by the order of which authority the limitation is imposed shall be recorded.

 

Register for Corrections

 

Article 15- In the register of corrections, in which register and item number under which the correction has been made, the nature, the reason and the date of correction shall be recorded.

 

Method of Recording in the Petroleum Register and Corrections

 

Article 16- All entries in the petroleum register shall be carefully printed in black China ink. Scrapings, erasures and marginal notes are not allowed.

 

If the entry is erroneously recorded in a section of the Petroleum Register and the Registrar detects it at the moment of recording or if the correction to be made does not effect the nature and the value of the right, he shall make the corrections himself.

 

In case the terror is detected after interested parties or the third persons have learned about it, the Registrar shall notify the concerned parties and ask for their written consent for correction. If all parties approve, he shall make the correction. In the event that one of the parties does not approve, he shall ask the General Director to establish a commission and the action shall be taken in accordance with the decision of the commission.

 

The corrections shall be made by crossing out legibly with red ink and re-writing in the same column of the page. Scrapings, erasures, marginal notes, between-lines insertions or footnotes are not allowed. If the correction is based on a written document, this document shall be preserved in the file related to the right.

 

Modification and Deletion of the Entries

 

Article 17- Modification and deletion of the entries in the Register shall be made with the approval of the General Director. Cancellation of the limitations imposed on the petroleum rights for specific periods shall be made, upon expiration of that period, by the registrar in charge of keeping the petroleum register. The document that constitutes the basis of such deletion and modification shall be preserved in the file of the right.

 

Modification of an entry in the register shall be made by crossing-out legibly with red ink and writing the new status in the same section of the page. The date of the modification and the number of the supporting document shall also be recorded.

 

Deletion of an entry shall be made by crossing-out legibly with red ink, showing the date of deletion and the number of the supporting document, noting the reason of deletion in the same section of the page and having it signed by the registrar in charge of keeping the petroleum register.

 

Validity of the Petroleum Register

 

Article 18- The entries into the petroleum register shall be considered valid unless there is proof to the contrary.

 

Public Access to the Petroleum Register

 

Article 19- The books of petroleum registry shall be open to the scrutiny of the public within working hours.

 

Duties of the Registrar

 

Article 20- The petroleum registrar shall perform the following duties in accordance with the instructions he receives from the General Director:

 

  • Maintains the petroleum register. Is responsible for accuracy and completeness of the records,
  • Enters into the Daily book the date and the number assigned by the incoming correspondence section to the applications relating to petroleum rights as well as the filing number in the book,
  • Assigns case numbers to the files relating to petroleum rights and records these in proper places,
  • Keeps the personal Registers in accordance with Article 39 of the Law,
  • Serves notices, publishing same in the Official Gazette, if necessary.
  • Is responsible for the recording, registering and notifying of concerned parties regarding other matters as specified by the General Director,
  • Examines the conformity to the Regulations of the applications and the enclosures thereto relating to petroleum rights which are filed with the office in charge of keeping the petroleum register,
  • Prepares the documents of the permits, exploration licenses and leases, and certificates,
  • Ensures the execution of the title-deed registration formalities by the petroleum right holders as stipulated in article 21 of the Regulations,
  • Informs the Ministry of Industries and Commerce about the petroleum right holders, which are expatriate companies.

 

Registration in the Land Register as Relating to Refineries and Pipe Lines

 

Article 21- According to the second sub-article of Article 37 of the Law, a notation shall be entered and registered in the records, at the land registration office, of the land on which the refinery and the pipelines have been erected, on basis of the documents submitted by the right-holder, to the effect that “such lands may not be subjected to any disposition without the permission of the General Directorate” and the document evidencing that such a notation has been made shall be given by the petroleum right holder to the General Directorate.

 

Surface Right on Treasury-Owned Lands Belonging to Individuals

 

Article 22- In order to establish surface lease on the land, which is owned by or is under the jurisdiction of the Treasury, the petroleum right holder shall apply to the General Directorate with the existing or newly made cadastral map of the land subject to use. The General Directorate, with the approval of Ministry of Finance and customs, shall record the surface right in the exploration license, lease or certificate.

 

To establish surface right on land owned by individuals, the existing or newly made cadastral map of the land to be leased, together with a certified copy of agreement executed with the owner of the land, shall be submitted to the General Directorate and recorded in the petroleum register.

 

Items, which are Mandatory to be recorded on the Licenses, Leases and Certificates

 

Article 23- Extensions, additions to the areas and transfers thereof, limitations, modifications of the rights and other transactions shall be recorded on the permits, exploration licenses, leases and the certificates.

Case Numbers

 

Article 24- A case number is assigned to the applications, filed and recorded in the proper book of registration, for permit, exploration license, lease and certificate and for acquiring one or more petroleum rights arising there from. The case number indicates the kind of the right, the owner thereof and the sequence of the documents. The General Directorate shall ensure the sequence numbers remain unchanged and shall determine the manner of recording them.

 

Source File

 

Article 25- If the applicant contemplates to refer, in connection with another transaction later, to the information in the file of its application, it must submit an additional copy of the application documents, with the exception of the maps of license areas. This copy, shall be given together with the first application, is called the source file. This file shall contain all the information stipulated by Article 29 of the Regulations.

 

All information in the source files and referred to in the subsequent application shall be kept, at all times, current by recording the changes made by the applicant. Applicant must inform the General Directorate of the changes made by the applicant. Applicant must inform the General Directorate of the changes within 30 days following their occurrence. The documents showing the changes shall be prepared in the same manner as in their original form.

 

On applications filed by making reference to the changes not reported by the applicant within 30 days, action shall be taken in accordance with Article 15 of the Law.

 

In connection with the information in the source file to which reference is made in the subsequent applications, the applicant shall enter clarification by stating in the application: “We declare that, on the day we submit this application, all information which is stipulated by Article 29 of the Regulations and to which we refer is current in our source file dated...............................................................”

 

SECTION TWO

 

Petroleum Districts and Open Areas

 

Districts and Open Areas

 

Article 26- In designating the districts in accordance with Article 45 of the Law, national security and, so far as possible, geological structures and common geological characteristics shall be taken into consideration. Other than areas decided to be offered for competitive bidding in accordance with article 64 of the Law or closed by the decision of the Council of Ministers for reasons of national security, all parts of turkey may be declared open areas. In awarding offshore licenses or leases beyond the territorial waters, the rules regarding the number of licenses, areas to be covered, the durations and the obligations shall be designated by the Council of Ministers. For the cases not determined clearly by the Council of Ministers, the provisions of the Law and the Regulations relating to the territorial waters shall be applied. The licenses and leases granted beyond the territorial waters shall be considered being beyond of the existing petroleum districts.

 

The decisions pertaining to the designation of a district, modification thereof or re-arrangement of district separation, opening of a district partially or totally or modification of the boundaries of an open area, closing it partially or wholly shall take effect on the date they are published in the Official Gazette. These decisions do not alter the acquired rights.

 

Announcement in the Official Gazette

 

Article 27- Apart from those stated in Article 38 of the Law, the following also shall be published in the Official Gazette.

  • The subject, location an d the date of examination and investigations which the Minister or the General Director considers it necessary that they be conducted openly,
  • The nature and the dates of the applications relating to the exploration licenses and the leases, certificates, surface rights, expropriation of the land, additions to the areas of exploration licenses and leases and to the partial relinquishment of those areas,
  • The nature and the dates of applications relating to requests for the relinquishment and for the extension of exploration licenses, leases and certificates,
  • The matters relating to the Lease areas to be offered for competitive bidding and to the appeals,
  • Other matters which the Genera Director considers suitable for publishing.

 

 

PART TWO

 

Method of Applying for Acquisition of Petroleum Right

 

SECTION ONE

 

Applications and Attachments thereto

 

Documents

 

Article 28- The documents accompanying the applications filed with the General Directorate shall conform to the designated forms and shall be submitted in duplicates. If there are documents among the filings, executed in foreign languages, their notarized Turkish translations must also be enclosed.

 

Initial Application

 

Article 29- For the acquisition of a right envisioned under the Law an application shall be filed with the General Directorate. The nature of the application and the article, sub-article and paragraph on which it is based shall be specified in the application and the applications shall be signed by the applicant.

 

Documents to be attached to the application are cited below:

 

      • For domestic companies, an approved copy of the registration obtained from the chamber of commerce or from the concerned office of trade registry; for foreign companies, a document showing that the company is established in accordance with the laws of the country to which it is subject and that it is currently active, as received from the officials of the state to which the company belongs and, as head office of the company is situated, that he said official is an authorized official,
      • A statement indicating the address of the head office of the company and the address in Turkey to which notices are to be served,
      • A statement showing the name, the surname and the domicile of the representative to be filed together with application if the company already has a representative or within 30 days following the acquisition of the right if it does not, to which the company’s decision relating to the appointment of the representative of the foreign company in Turkey and the notarized power of attorney shall be attached,
      • Definition and description of the land relating to the right requested along with its map prepared in accordance with these Regulations (until the procurement of the map, scaled plans copied from the map bearing details suitable for the purpose may be submitted),
      • Notarized company decision or power of attorney signed by the authorized official of the company, showing the names, titles and facsimile signatures of the persons authorized to conduct the activities of the company in Turkey and to act and sign on behalf of the company.
      • Articles of Association of the company pertaining to its incorporation and registration or the charter or bye-laws which are, according to the legislation of the country to which it is subject, considered to be of the nature of Articles of Association. (These documents must be confirmed by the authorities whose authorizations must be certified by the Turkish Consulate in the country where the company is registered or where its head office is situated.)
      • Names, surnames and business addresses of the president of the company and of the members of the board of directors,
      • The amount of the company’s capital, its composition (shares, bonds and types thereof and the exchanges where they are quoted)
      • Document showing, the percent holdings of those who hold more than 25% of the shares of the company and who are entitled to a significant portion of the profits, and the nature of the profits, and the nature of the power vested in those who are authorized to make decisions in the administration of the company, to exercise controls and to appoint the directors of the company and the names, surnames and the domiciles thereof,
      • Name and address of any company, which conducts petroleum operations in Turkey or has filed an application in the manner of one owning 90% or more of other’s stock,
      • Document showing the names of the foreign states or persons acting on behalf of a foreign state, if any, having financial or other interests to such an extent and in such manner as to be influential, directly or indirectly, in the actions of the company, and if so, the nature and extent of such interest,
      • The company’s balance sheet for the last year and if such does not exist, the balance sheet of the previous year, giving the reasons, or the balance sheet of another company which declares to assume the financial obligations relating to the activities of this company in Turkey and which owns 75% or more of the capital of the said company,
      • Document received from the bank or a financial institution which handles the majority of company’s financial affairs, showing the financial strength of the company and the name and address of the bank/institution which issues such document,
      • Document containing information as to similar past activities of the company and its experience, which may influence the decision regarding the application,
      • A written statement confirming the deposition of the guaranty as stipulated by Article 9 of the Law,
      • Receipt confirming the payment of the required fee,
      • Information which must be given in accordance with Article 30 of these Regulations,
      • A signed statement by a person authorized to act and sign on behalf of the company to the following effect: “We declare that the information in this application and in the documents thereto prepared by us is true and complete, that it shall be binding on us, and that when our request is granted, we shall comply with the laws and regulations of the Republic of Turkey and with the terms and conditions of the right we shall have acquired”.
 

Information and Documents to be Included in the Initial Application

 

Article 30- In addition to the information to be given in accordance with Article 29 of these Regulations, the following information and documents must be attached to the applications filed for the acquisition of the rights cited below:

A) For permits,

 

  1. The term requested,
  2. The geological investigations planned for the first year,

 

B) For the exploration license,

 

  1. Whether the applicant is a permittee or not,
  2. If the applicant has acquired or applied for acquisition of other exploration licences in the same district, the case numbers assigned thereto by the General Directorate,
  3. Nature, scope and the minimum approximate cost of the exploration planned for the first year,

C) For the lease to be applied for as a result of exploration license,

 

  1. The nature, scope, results and cost of reconnaissance (exploration) and development conducted within or outside the license area or within the requested lease area, for the purpose of evaluating this area,
  2. The scope of each petroleum field as therefore determined which has been discovered in the area subject to lease application, approximate daily rate of petroleum production, approximate recoverable reserves, name of the producing formation, its geological age and depth,
  3. Areas and the case numbers assigned by the General Directorate of other leases in the same district either acquired as the result of the exploration license or acquired or applied for acquisition through competitive bidding,
  4. Program relating to the development and exploitation of the lease area,

D) For the pipe line certificate,

  • The source, volume, nature and designation of the petroleum planned for transportation,
  • The diameter, weight per meter, wall thickness, nature and the maximum safe pressure of the pipe to used,
  • Maximum pressure contemplated to be applied,
  • Daily throughput capacity under the contemplated maximum pressure and planned maximum daily throughput,
  • Maximum and average daily throughput contemplated to be attained for the first year of operation,
  • Description, technical drawings, location, equipment and the layout plans of the proposed pump stations and other installations,
  • Estimated cost of the principal units,
  • Name and route of any other pipeline, with a conflicting route, or performing the same service as the proposed pipe line, of which the certificate has been acquired or applied for,

E. For the certificate or transportation by other means

 

  1. Source, volume, nature and properties of petroleum planned to be transported and purpose of transporting the same,
  2. Points of origin and destination of the petroleum,
  3. Means of transportation, equipment to be used, and unit prices approximate costs thereof,

F. For the refinery certificate

 

  1. Source, volume and properties of the petroleum to be refined,
  2. Manner of marketing the products
  3. Refining processes to be applied and the types, maximum safe temperature and pressure ratings of the units to be used in each process,
  4. Temperature and pressure to be maintained,
  5. Layout plan of the installations and their description,
  6. Approximate daily capacities of the units and installations to be used in refining,
  7. Layout plans and descriptions of the auxiliary installations and facilities such as power plants, storage tanks, loading facilities and housing,
  8. Approximate cost of each unit,

(The information mentioned in paragraphs 5 and 6 may be submitted later, within the period specified by the General Directorate),

 

G. For the other certificates,

 

  1. Equipment to be used,
  2. Installations to be set up, equipment to be used and the approximate costs thereof,
  3. Other information relating to the clarification, safety and soundness of the operation to be conducted,

 

H. For the surface rights,

 

1. Purpose for which it will be used,

2. Exploration license, lease or certificate, existing or applied for, to which it is related,

 

I. For expropriating the land subject to surface rights,

 

  • Purpose of expropriation
  • Boundaries, map, and ownership of the real properties to be expropriated,
  • Efforts made for acquisition through negotiations and the causes of failure thereof,
  • Case number of the exploration license, lease and certificate to which the property to be expropriated is related,

 

J. For the employment of expatriates,

 

  1. Number of expatriates to be employed and the nature of their duties,
  2. Reasons for the employment of expatriates must be stated.

 

In the applications for the acquisition of exploration license, lease and certificate, the precautions in accordance with the legislation concerning pollution to the environment must also be described.

 

Applications Subsequent to the initial Application

 

Article 31 – The information to be included in the subsequent applications by the same person are shown below:

 

  • Case number,
  • Subject of application,
  • Name of applicant and the address thereof in Turkey,
  • Paragraph, sub-article and article of the Law on which the application is based,
  • Date and filing number of the prior application or documents to which the application is related,
  • Description, definition and map, of the land related to the application, conformant to the Regulations,
  • Information to be submitted in accordance with Article 32 of the Regulations,
  • Receipt confirming the payment of the fee,
  • Written declaration of a person authorized to act and sign on behalf of the applicant company to the following effect: “We declare that the information in this application and in this application and in the documents prepared by us is true and complete, that it shall be binding on us and that when our request is granted, we shall comply with the laws and regulation s of the Republic of Turkey and with the terms and conditions of the right we shall have acquired”

 

Special Conditions to be sought in the Applications Subsequent to Initial Application

 

Article 32 – In addition to the information to be given in accordance with Article 31 of the Regulations, the following information shall be provided in the applications subsequent to the initial application:

 

A) For the localities where petroleum operations are to be conducted with the special permission of the Minister,

 

  1. Reason for the operation,
  2. Nature of the operation to be conducted

B) For the extension, in accordance with Article 33 of the Law, of the legal term of the petroleum operations stipulated in the permit, exploration licenses, lease and certificate,

 

  1. Nature of the operation,
  2. Date on which the operation shall commence,

C) In the applications, to be submitted separately by the transferor and the transferee, relating to each right to be transferred or to be limited, filed for the approval and registration of the transactions regarding partial or total transfer of or limitation on the exploration license, lease or certificate or the rights arising there from, as per Articles35 and 36 of the Law:

 

  1. Case number assigned by the General Directorate to the petroleum right to be transferred or on which limitation is to be imposed,
  2. Nature of the right and of the request,
  3. Detailed information relating to the action to be taken,
  4. Name, number and designation of the file stipulated in Article 29 of the Regulations, as well as, of the source file which contain information about the transferor, and transferee,
  5. Whether the request is made for the purpose of more rapid and more efficient conduct of the operation or for acquisition of sufficient or additional resources,

D) In order to record the refinery and pipeline in the petroleum and in the land registers, the documents relating to the annotation on the land title to the effect that the land on which refinery and the pipelines are installed cannot be subject to any disposition without the permission of the General Directorate,

E) For the extension of the term of the permit,

1. Term of the extension requested,

2. Reasons necessitating the extension,

3. Nature of the geological exploration to be conducted during extension period,

F. Extension of the exploration license prior to discovery,

1. Term of the extension requested,

2. Reasons necessitating the extension,

3. Description of the exploration activities conducted by the petroleum right holder in license areas within the same distinct,

G) Extension of the exploration license following discovery,

1. Additional information regarding discovery, if available,

2. Extension requested for defining the petroleum field,

H) For the extension of the commencement of exploratory drilling,

1. Extension requested,

2. Reasons necessitating the extension,

3. Program for the operation to be conducted,

I) For the extension of the term of the lease, in accordance with sub-article 3 of Article 65 of the Law one year prior to termination,

1. Requested term of extension,

2. Reasons necessitating the extension,

J) For the unitization of the leases,

1. The lease areas or parts thereof to be unitized, names of the right holders and case numbers,

2. Detailed program of unitization showing the operator of the unitized field, whether the produced petroleum shall be put into a joint storage or not and, if so the proportions thereof and in what ratios each of the right holder companies shall participate in the cost of the operation and will benefit from the petroleum produced or the income received therefrom,

 

  1. How and to what extent the unitization of the operations can prevent waste, how it can increase production and efficiency or decrease the cost of production,

K) For transporting petroleum through another’s pipeline,

1. Owner of the pipeline to be used,

2. Point of delivery to pipeline and point of destination,

3. Daily and cumulative amount of the petroleum to be transported,

4. Analysis report and specific gravity of the petroleum,

5. Applicable transportation tariff, if available,

6. In case the tariff is found to be too high, the reason for the request to review it.

L) For the purchase by the General Directorate of fixed installations and buildings, on land relating to the expired surface rights,

      • Descriptions and nature of the assets to be sold,
      • Depreciated portion, according to the books of petroleum right holder, of the values of the installations and assets,
      • In case a price higher than that specified by the General Directorate is demanded, the reason for it,
    • For additions to refineries and pipe lines,
      • Nature of the unit to be added to refinery, approximate capacity and the benefits to be derived there from,
      • Beginning and terminal points of the pipeline, capacity of additional unit, purpose and benefits to be derived there from,
    • For determination of transportation tariff,
      • Means of transportation,
      • Charge for transportation,
      • Draft tariff prepared on basis of the third sub-article of Article 84 of the Law and showing: name of the company, effective date of the tariff, signs and symbols to be used, nature of the petroleum, physical properties thereof, minimum amount to be transported, maximum daily amount to e transported, points of intake and destination, terms of payment, obligations of the parties, transportation losses and other conditions,
    • In the written applications to be filed with the General Directorate, at least six months prior to the expiry of the term of a license and at least two months prior to the beginning of the drilling obligation, requesting extension thereof by the council of Ministers, against a guaranty, on basis of Article 55 and 58 of the Law, the reasons necessitating extension of the term (In case extension of the term is approved, the guaranty in the amount specified must be deposited within 15 days following notification)
 

Form of Definition and Description of the Land

Article 33 – In the applications for the acquisition of permits, the area involved shall be described by specifying the districts or open parts thereof.

 

Boundaries of the land on which petroleum operations are to be conducted with the special permission of the Minister in accordance with Article 7 of Law, shall be shown on a properly-scaled map and the nature of operation to be conducted shall be described, The 5 – kilometer distance from the State boundaries and the 60-meter distances from the sites shown in second sub-article of Article 7 of the Law shall be measured horizontally.

 

In the applications for laying pipe lines, the coordinates of the beginning, end and turning points of the line, their directions with respect to the north and horizontal distances from the triangulation point shall be shown. The course of the line, horizontal angle at the turning points, width required on both sides of the centerline and the areas where pumping stations, tankage and loading stations will be installed shall be shown on properly-scaled maps, described and identified.

 

In the applications relating to requests, not covered in the above sub-articles, in connection with exploration licenses and leases, surface rights, reduction of and addition to license or lease areas, as stipulated by Articles 89 and 90 of the Law, expropriation under Article87 of the Law, proposals for the acquisition of lease through competitive bidding and unification of leases, the land shall be described and identified by indicating the province and the town, as well as, the boundaries for easy identification along with the coordinates of the license corners.

 

Tie-in with Reference Points

 

Article 34-

      • Of the exploration licenses or the leases or unitized petroleum fields, two or more corners, preferably opposite,
      • Of the land subjected to rights other than a permit, at least one corner,
      • Of the pipeline, survey stations on the centerline not ore than 20 kilometers apart,
 

Shall be tied to triangulation point by showing the direction with respect to north and the distances thereto. If there is no benchmark of known coordinates within 20 kilometers, a fixed and known landmark shall be used for the tie-in.

 

Unit of Surface Area

Article 35- Except those relating to permit, the area of all land and portions thereof shall be expressed in hectares.

Nature and sale of maps

 

Article 36

 

      • To the application for permit, a sketch map of the area shall be attached. On the sketch map, the boundaries of the area shall be shown in north - south and east – west directions. For reconnaissance (exploration) to be conducted with the special permission of the Minister in the areas covered by Article 7 of the Law, the land and sea frontiers of the country may be taken as boundaries.
      • To the applications, other than request for permit, for acquisition of special permission of the Minister, a sketch, of proper nature and scale, which will provide for easy recognition of the land, shall be attached.
      • 1. Exploration licenses and leases shall be drawn on 1:25.000 scale topographic map by writing the length of each of the boundary lines and showing the corners described in drawing the boundaries of license or lease areas from the degree or grade division points. If the boundaries of exploration or lease areas are to be drawn from other points, they must be drawn from a minimum distance of five seconds. Common boundaries shall be taken as they are.
 

2. In the applications for more than one exploration license, filed simultaneously or subsequently by a person, one map shall be submitted if the areas fall on the same sheets,

  1. 1:25000 scale maps shall be used in exploration license explorations. If the map of the part for which applicant request exploration license is not available from its own archives, action shall be taken in accordance with sub-article G of this Article.
  2. In the applications for the acquisition of offshore licenses or leases, 1:250.000 scale maps shall be used. The length of the boundary lines and the geographic values of the opposite corners shall be drawn on the sheets and these values shall be specified in the definition and description thereof.

D.) To the request for pipe line

  1. 1:250.000 scale sketch of the right-of-way and profile thereof of the same scale.
  2. Separate plans of proper scale showing the locations of pump stations, tanks and other installations,
  3. Plans and profiles, properly scaled, of the intersections and crossings of the pipeline with rail roads, highways, rivers and canals

 

shall be attached.

 

E) To the applications relating to or in connection with refinery and other certificates or other rights. 1:2.000 to 1:10.000 scale plans and information pertaining to the description and definition of the land shall be attached,

  • In the applications relating to partial relinquishments from license or lease areas or for the new areas resulting from additions of tracts of land to those areas, the sub-article C above and Articles 38 and 40 of the Regulations shall be applied in specifying the nature and scale of the map to be used and the boundary lines. In partial relinquishments and additions, the width/length ratio shall not be sought. However, action shall be taken in accordance with Article 40 of the Regulations with respect to the final status after addition and, if no addition is to be made within the certain period after relinquishment, to the final status after relinquishment,
  • In place of the 1:250.000 scale maps to be attached to the applications by the companies which are not petroleum right holders, 1:250.000 scale sketches made on basis of the 1:250.000-scale maps existing in the technical archives of the General Directorate may be used. However, within 30 days after becoming a petroleum right holder and receiving the 1:25.000 scale maps, the descriptions and definitions shall be transferred to the 1:25.000 scale map and submitted to the General Directorate.

 

Scale of Sketches

Article 37 – The sketches to be given in accordance with Article 36 of the Regulations shall be submitted to the General Directorate in 1: 250.000 scale and other sketches in suitable scales.

 

SECTION TWO

 

Contiguity, Shape of the Areas and Marking of the Boundaries

 

Boundaries

 

Article 38 – License or lease areas shall be bounded by straight lines in the north-south and east-west directions. Land and sea frontiers and such natural boundaries as rivers and lakes shall be defined with area boundaries which are assumed to have been formed by infinitely small lines in north-south and east-west directions, bearing in mind the limitations in Article 7 of the Law.

The shape of a lease arising from a license area shall not be required to conform with the shape of the license area.

 

Contiguity to Other Areas

Article 39 – License, lease and certificate areas belonging to the same petroleum right holder or to the others are not required to be contiguous with each other.

Continuity of the Areas

Article 40 - License and lease areas shall be of the size compatible with the purpose and compact, and the length shall not exceed seven times the width in the license area and ten times the width in the lease area.

The length of the areas is the straight line between the two farthest corners and the width is obtained by dividing the surface area of the license by the length.

 

Areas Containing More Than One Petroleum Field

 

Article 41- If the explorer has discovered more than one petroleum field within a license area it shall make up a lease by selecting several of them.

This lease area need not conform to the provision of Article 40 of the Regulations. However, each of the selected petroleum fields shall conform to Article 40 and the total area shall not exceed one half of the license area.

 

Boundary Markers

 

Article 42 – Boundary marker points of the lease shall be indicated by vertical stone, concrete or wooden posts, or metallic pipe with square cross-sections of 10 centimeter sides or circle of 10 centimeters in radius. These shall be set on solid foundations with one meter portion above ground, painted white and the case numbers written in black on the body or on the plagues securely attached.

 

The markers shall be placed, at intervals not exceeding 7.5 kilometers, along the boundary lines, at boundary corners, intersections of State roads with the boundary lines and the point the boundary meets the boundary of a neighboring field.

 

Markers shall be placed so as not to impede the use of the land surface and by occupying the least amount of space.

Petroleum right holder shall submit to the General Directorate within 30 days following the marking of the field, the map showing the location of the markers, spacing, nature and the status thereof with respect to the natural and artificial reference points in the vicinity.

 

The above provisions shall also apply in the event of modification of the lease area.

 

Marking of Wells

 

Article 43 – Every drilling or producing well shall be identified by a sign showing the number of the license, the name or number of the well. Such signs shall be maintained until the well is abandoned.

On abandoning a well, the location of the well shall be marked of the same type as those used in marking boundary points. In addition to the information specified above, the date of abandonment shall be written on the marker. If the owner of the land does not consent to such a sign, a marker stake 50 centimeters long shall be driven in a manner to leave the wellhead below the plowing level.

 

SECTION THREE

 

Transactions Relating to Permit, Exploration Licenses, Certificates, Transfers, Limitations and Appeals

 

Extension of the Term of Permit

 

Article 44 – The term of the permit may be extended for a period deemed suitable by the General Directorate upon written request at least 30 days prior to expiration.

 

Applications for Exploration License

 

Article 45 – Unless the right for exploration in a license area has decisively expired, the applications for this area or a part thereof shall not be valid and application documents shall be returned.

 

All applications for acquiring exploration license shall be kept confidential for four business days shall thereafter be punished. In case more than one application is filed for the same area or any part thereof during this period, they shall be finalized in accordance with Articles 4 and 51 of the law. However, in order to benefit from the provisions of Article 51, the permit holder must document that has conducted investigations with diligence.

Applications filed for exploration license for the same area or a part thereof after four business days shall not be considered and shall be returned attached to a letter.

Together with the extensions other than those cited in sub-articles 4 and 5 of article 55 of the Law, the term of an exploration license may not exceed eight years.

An explorer who makes a discovery in one of the license areas granted during the same year must begin exploration drilling within one year after discovery in another of these areas within 3 years after discovery in the remaining areas.

 

Obligation to Acquire Certificate

 

Article 46 – Refining and transportation operations may not be conducted without certificate.

Submitting the Pipeline Tariff

 

Article 47 – A) The transporter undertaking the transportation pipeline or other means, of petroleum belonging to himself, to other persons or both to himself and other persons, shall apply, prior to commencing transportation, to the General Directorate for approval of the tariff prepared in accordance with sub-article (N) of Article 32 of the Regulations.

B) The General Directorate may send copies of this tariff to persons who may request transportation of their petroleum and shall maintain such tariff open to examination during business hours.

C) Tariff relating to transactions at the beginning and end points may be different from the tariff relating to other stages transportation.

      • The General Directorate shall, within a maximum of 60 days after its receipt, accept or reject the tariff submitted for approval. The General Directorate shall also take into consideration the request of the transporter for approval in a shorter time.
      • In the case of request for modification of a tariff or for raising the prices thereof starting from a certain period, the General Directorate shall put into application the proposed new provisions and price changes retroactively so as to be effective from the beginning of the period in question.
 

 

 

Beginning of Transportation

 

Article 48 – In addition to giving permission for transportation before approving the tariff, the General Directorate may order also the transportation of another person’s petroleum not mentioned in the tariff. Until the approval, the proposed tariff shall be applied.

Transporter may begin transporting its own petroleum as soon as it submits the tariff to the General Directorate.

Transfer of Licenses and Certificates

 

Article 49 – A) Exploration licenses, leases and certificates may be subject, under Article 36 of the Law to agreements, which may be made relevant to immovable and to the establishment of such rights as will entail the use of petroleum rights and may be divided into shares. Production right arising from exploration license, exploration right arising from lease and those among such rights relating to any part of a license or lease area, the right to conduct any of the operations which may be subject to certificate and the right to buy and sell petroleum, provided it is connected with these operations, excluding retail sales direct to the consumer, may be subject to the same actions and may be divided into shares.

B) If the above enumerated petroleum rights are held by more than one legal person or if the right pertaining to the use of one of these rights is held by a separate holder, in case of violation by any one of those persons of the articles 9, 10, 56, 57, 58, 59, 66, 67, 68, 69, 77, 78, 79, 85 of the Law or the provisions of sub-article (D) below, the consequences and sanctions, arising from the Law, of the violation shall be applied to the owners of the above-cited rights irrespective of the agreements among them and whether they are involved in such violation or not.

The consequences and sanctions which result from non-fulfillment of obligations and liabilities arising from the Law and from Regulations, other than those in the above sub-article, shall be incumbent upon the petroleum right holdrs in proportion with the extent of their rights.

C) Restrictions stipulated in Article 53/3, 61/3, 74, 75 and 90 of the Law with respect to the number of licenses that may be held by one person in a given district and areas extent in hectares, of the licenses shall be computed by adding the net shares owned directly or indirectly by that person in the petroleum rights. If the number of licenses and the surface area in hectares thus computed are within the limits stipulated by the Law, the approval and registration of any sale, transfer, establishment of interest and rights or restriction will not be hindered. However, this provision shall not lift the obligation for drilling in the licenses owned individually and, in the case of having interest, through shares, in more than 8 (12 for Turkish Petroleum) exploration licenses in a district, the obligation to drill one exploratory well for every 8 licenses and also another exploratory well for the remaining areas.

D) In order for more than one person to hold exploration license, lease, certificate, petroleum rights arising from the same license, lease or certificate, or a right established on those rights, they must designate the same person as the representative and submit the power of attorney describing the authority granted to such representative. If this status discontinued for any reason, the General Directorate shall apply the provisions of sub article (B) to the owners and shareholders of petroleum rights arising from the license, lease or certificate or to the holders of the right established on the petroleum rights.

 

The single person appointed as the representative may be placed in accordance with the Law and the Regulations and by the unanimous decision of those represented by informing the General Directorate in writing.

 

Notice served in accordance with Article 40 of the Law and the provisions of the Regulations upon the representative by the General Directorate and administrative authorities, by other petroleum right holders in Turkey and landowners, shall be deemed to have been served to the holders of petroleum rights and to such others as represented.

 

E) For the transfer exploration licenses, leases and certificates and the rights and restrictions thereon and the shares thereof, and for making them subject to agreements which may be made for sale, mortgage and the like regarding immovable, the case must be approved and registered in advance by the General Directorate. Distraints and precautionary measures are beyond these provisions.

 

F) Petroleum right holders who unitize their operations in accordance with articles 70, 71 and 73 of the Law, shall be individually responsible for the financial and other obligations under these provisions.

 

Discretion of The General Directorate

 

Article 50 – The General Directorate may refuse, in consideration of the provisions of Article 4 of the Law, the execution of the transactions regarding the transfer or limitation of a right, requested in the name of persons whose technical and financial strength, capability and diligence it does not find convincing.

 

Method of Appeal

 

Article 51 – Against the decision of the General Directorate in connection with the application of the Law, which affect the request of the applicant or of the petroleum right holder or the rights arising from the permit, exploration license, lease or certificate the applicant or the petroleum right holder may appeal to the Minister within 20 days following the notification of the decision.

 

In this appeal:

 

      • Identity of the appellant and its interest in the case,
      • The nature of the application or of the right relating to the appeal and the case number assigned by the General Directorate,
      • Summary of the decision subject to appeal,
      • How and to what extent will the decision subject to appeal adversely affect to the appellant,
      • Material and legal reasons necessitating the correction or abrogation of the decision giving rise the appeal, must be described.
 

 

Appeal not containing the above information shall not be considered valid. However, permission shall be given for the correction and completion of the errors and deficiencies.

 

SECTION FOUR

Granting of Lease by Competitive Bidding

 

Announcement

 

Article 52 – Notice that a lease area is offered to competitive bidding shall be published by the General Directorate, at least 90 days prior to the last day on which the bids shall be accepted, in the Official Gazette, in one daily newspaper published in Ankara and Ýstanbul and, if deemed necessary, in a newspaper abroad.

 

Information to be Included in Announcement

 

Article 53 - In the announcement, shall be included information regarding the last day, hour and the location at which bids shall be submitted, percentage of guaranty to be deposited, designation of the area, its map, geological and other information, and the facts that the specifications may be examined at the General Directorate and copies thereof may be made, that the General Directorate shall not be responsible for postal delays and losses and that the adjudication committee is free to decide whether or not the tender should be adjudicated.

 

Bids

 

Article 54 – Bidding shall be made by sealed bids. The bid shall be put in an envelope, the envelope shall be sealed and the name and address of the bidder shall be written on it.

The designation assigned to the lease area by the General Directorate, a declaration to the effect that the specifications have been accepted and the benefits which may be realized by the Government shall be written in the bid letters and the information in sub-articles 2, 5,6,7,8,9,10,11,12,13,14,18 of Article 29 of the regulations along with, if necessary those in Article 31 thereof, shall be submitted and the receipt for guaranty as specified in the specifications shall be attached. Bids may be hand-filed with The General Directorate or may also be sent, enclosed in a second envelope, by return-receipt registered mail.

 

Second Bid

 

Article 55 – A bidder may be file a bid more favorable than its previous one until the last hour at which bids must be submitted. However, then the previous guaranty shall be brought up to the amount required for the second bid.

 

Procedure for Filing the Bids Following Termination of the Period

 

Article 56 – The bids which are numbered in accordance with their sequence of filing shall be given to the chairman of the adjudication committee against a receipt. The bids received after the announced period shall be recorded in a protocol.

 

The Opening of Bids

 

Article 57 – On the day and at the hour designated or opening of the bids, the protocols on the receipt thereof shall be read out and signed by the members of the adjudication committee prior to opening the bids and the envelopes shall be opened per numerical order and the contents thereof shall be studied.

Procedure after Opening the Bids

 

Article 58 – The adjudication committee shall evaluate the bids taking into consideration the conformity of the bid to legislation; the compliance of the bidder with legislation during its past activities, its experience, financial strength, sequence number of application and the economic benefits to be realized. The results shall be recorded in the minutes which shall be submitted to the General Directorate together with the bids. The General Director, having made necessary studies, shall submit his decision to the Minister proper from the General Director is found by the Minister proper from the standpoint of national interest; the bidder shall be notified to deposit the guaranty stipulated in Article 68 of the Regulations within the specified period. The guaranty deposited for the participation in the bidding shall be credited against the lease guaranty and the lease shall be awarded.

 

Total Surface Area of the Leases

 

Article 59 - If the total of the surface area of the lease which will have been acquired through competitive bidding together with the surface areas of leases already owned by the same person exceeds 150 thousand hectares in one district, it shall inform the General Directorate within 7 days after having been notified that the ease will be granted, that it has surrendered the acreage in excess of 150.000 hectares. If it fails to do so, the General Director shall delineate the boundaries of the excess portion and shall direct the person to surrender this area. The guaranty relating to the area decided to be surrendered shall be returned.

 

Adjudication Committee

 

Article 60 – The adjudication committee shall be comprised of assistant General Directors, the Legal Adviser and the Head of the Budget Division, under the chairmanship of one of the assistant general directors.

 

Decisions of the committee shall be taken by a majority vote. Those in the minority shall write reasons thereon and sign.

 

PART FOUR

Obligations of the Petroleum Right Holders

 

SECTION ONE

 

Obligation to Notify, Reports and Samples

 

Cases to be reported on a Mandatory Bases

 

Article 61 – The petroleum right holders shall report to the General Directorate:

      • The events endangering or preventing the operations, immediately,
      • The well program at least 15 days prior to the starting the operation, the decision to drill at least 7 days in advance,
      • The other operations relating to lease or certificate, at least 7 days in advance,
      • Discovery of a petroleum field or discovery of a new reservoir in an already discovered field, by the fastest means of communication and in the shortest time,
      • Information pertaining to termination of the obligations under the Law, without delay,
      • The reasons for delays in fulfilling in time requirements of the right and of the stipulations of the Law or of Regulations and how much longer the delay will continue, immediately.
 

The reporting shall be made, depending on its nature, by the most suitable means of communication. Reports not given in writing within 24 hours.

 

Conduct of Operations through Contractor

 

Article 62 – The petroleum right holder wishing to conduct one of the operations through a contractor must submit to the General Directorate

 

      • Document relating to the identity of the contractor and the date on which he will commence the operations,
      • The original or notarized copy of the agreement made with contractor, and if the agreements are made in a foreign language, the translation thereof which it certifies as confirming to the original.
      • Warranty pertaining to its acceptance of responsibility arising from non-compliance of the contractor with the provisions of the Law and the Regulations.
      • Document, notarized or certified by competent authorities, confirming that there are no states or persons acting for or on behalf of a state which have financial relations or interests in such manner and extent, of being able to influence, directly or indirectly, the operations of the contractor.
 

 

The date of termination of the agreement and the completion of the operation shall be reported to the General Directorate 15 days in advance.

 

The petroleum right holder desiring a contractor of Turkish citizenship to conduct one of the operations shall not be required to furnish the documents in sub-article (D)

 

Reports

 

Article 63 – petroleum right holders shall submit the following to the General Directorate in duplicates:

 

  • Monthly an annual reports relating to geological studies and exploration conducted by the permit tee or the license,
  • Monthly and annual reports to be given by the licensee following discovery, containing the information covered by the monthly and annual reports to be given by the lessee in accordance with sub-articles (D) and (E) of the present Article.
  • Final report to be given by the licensee at the surrender or expiration of the term, covering surveys conducted within the exploration license which has expired because of, relinquishment or expiration of its term rather than the granting of lease, or investigations conducted beyond his area for the purpose of contributing to this area, along with the nature, locations, scope and the results of all exploration activities conducted within the license area,
  • Monthly report containing the information on the crude petroleum produced from the lease, stored on the surface or underground on or in the vicinity of the lease at the beginning and at the end of the monthly period, used in operations in the lease area, injected under or without pressure into the reservoir for the purpose or quicker and more efficient, hence more prolific, recovery, re-drawn fro the reservoir, sold, documenting the sales price per unit, lost, not entered into the accounting books, as well as the amount of gas evaporated and the analyses of the samples of all the crude petroleum, gas and water produced,
  • Annual report showing the shut-in wellhead pressure and the bottom hole pressure of each producing well at the beginning and at the end of the year, gas/oil and oil/water ratios at the end of the year, the amount of water showing in or produced with the gas from each gas well at the end of the year and the effect of this water on the performance of the well as at year’s end, the results of flow, back pressure and other tests made during the year and, the nature of the permanent or temporary installations set up during the year,
  • Partial relinquishment report for the relinquished parts of the exploration licenses and leases showing the nature, scope and results of exploration and development conducted in these areas prior to relinquishment (if the license requests, under Article 90 of the Petroleum Law, to add the relinquished part to an adjacent exploration license which it owns, it shall inform the General Directorate regarding this request within 4 days following the relinquishment and, if the request is granted, it may not be required to submit the partial relinquishment report. If the request is rejected, it shall submit the partial relinquishment report within 30 days from the day it has been notified of such decision.
  • Well completion report to be given in within 60 days after the completion of the well, whether productive or not, drilled for the purpose of petroleum exploration, showing the final depth, records of coring, casing, cementing, and similar drillers records
  • Supplementary report to be given within 15 days following the completion of the operations, containing the operations logs which should have been included in the well completion report but were delayed due to studies and preparation, and information covering plug-back and completion operations which were not yet finalized at the time of filing of the well completion report,
  • Report to be given prior to start of construction and containing the information, as stipulated in sub-articles D,E,F and G of Article 30 of the Regulations, which must be included with the applications requesting the approval of a project of a planned operation which is subject to certificate or approval of the modifications thereof, the project itself and the written description thereof, as well as all the information which must be submitted with the certificate application,
  • Report to be given within 30 days following the completion of the execution of a project covered by the certificate, regarding the completion of the construction,
  • Annual report to be given within 30 days, covering the maximum daily, and the total yearly amount of the petroleum processed in installations subject to certificate, details of the funds paid for petroleum and received from the sale of products and average prices,
  • Annual report for each calendar year, covering the duration of employment during the year of each of the expatriate personnel employed in Turkey, their duties, the date and the number of the work permits; and as regarding the Turkish personnel who were sent for education and training under Article 120 of the Law, on what date each was sent to where, for what length of period and the institution attended, the operation studied, the nature of education or training undertaken and the expenses incurred,
  • Report which must be given prior to the modifications envisaged to be made in the installations registered in the petroleum register.

 

Monthly reports shall be submitted within 15 days from the end of the month which they cover.

The reports cited above shall be signed by the person authorized to act and sign on behalf of the legal person submitting the report.

 

Samples

 

Article 64 – All samples of petroleum, drill cuttings, cores and vertically cut portions thereof, tapes of geophysics or similar methods, and other data shall be kept in Turkey, ready for inspection and examination. However, the General Directorate may grant permission for sending them abroad temporarily for the purpose of analysis and examination, on condition that a copy of the analysis and examination, on condition that a copy analysis and examination. However, the General Directorate may grant permission for sending them abroad temporarily for the purpose of analysis and examination reports is submitted.

Stored and preserved samples, cuttings, and cores shall be marked by attaching labels on which the well numbers, depths and other necessary data shall be written.

 

SECTION TWO

 

Employment of Expatriate Personnel and Training of Turkish Citizens

 

Bringing expatriate personnel

 

Article 65 – In bringing to Turkey expatriate personnel whom the petroleum right holder wishes to employ in petroleum operations, the principles of the protocol agreement prepared together with the agencies concerned shall be applied.

 

Obligation for Educating and Training

 

Article 66 – The holder of lease or certificate rights shall provide education and training at its expense, Turkish citizens in the ratio of 25 % of the number of expatriate personnel it has employed, directly or through its contractor, during the previous calendar year. The localities, within the country or abroad, where the training and education shall be conducted, duration thereof, and the selection of the candidates shall be determined jointly by the petroleum right holder and the General Directorate.

The

 

The number of the expatriate personnel employed during a given year shall be multiplied by the number of months they worked, and divided by 12. The figure thus obtained signifies the number of expatriates employed during that year. In this calculation the personnel who worked less than two months shall not taken into account.

 

By decreasing the number of Turkish citizens to be sent abroad, in proportion to the expatriate personnel who have worked during a given year, the duration of training and education that they will undergo may be extended in the same proportion.

 

Recalling Of Trainees and Students

 

Article 67 – The students and trainees whose work abroad is not found satisfactory by the General Directorate or the petroleum right holder shall be recalled upon the proposal, with justification thereof, of the petroleum right holder and the approval of the General Directorate.

The procedures and the principles regarding the fulfillments of the remainder of petroleum right holder shall be further decided between the General Directorate and the petroleum right holder.

 

SECTION THREE

 

Guarantees

 

Guarantees and Amounts

 

Article 68 – Applicant is obliged to deposit a guarantee, determined by the General Directorate, to meet the losses and damages which may occur during the course of operations and the payments it may have to make under the Law. The guarantee shall be proportional to the right requested or with the responsibility which may arise therefrom.

 

This guarantee shall be in an amount not exceeding:

 

For permits, four million Turkish Liras for or more permits, irrespective of the number of licenses,

 

For leases, eighty liras per hectare or 40 million liras for the lease holder, irrespective of the number of leases,

So far as certificates are concerned, based on the estimated cost of installation cited in the proposal or request, or considered suitable by the General Directorate:

 

  • For crude oil or product pipelines and storage installations, in the ratio of five per thousand (0.5 %)
  • For the gas lines and storage installations, in the ratio of one percent (1%)
  • For the process unit installations in the refineries, in the ratio of one percent (1%)
  • For the other installations covered by certificate, in the ratio of five per thousand (0.5%)

 

shall be collected.

A person conducting various operations on basis of permit, exploration license, lease and certificate may deposit a single guarantee in the amount of 60 million liras to cover all of these rights and to meet the requirements cited in the sub-articles above. In such case, the petroleum right holder shall not be required to deposit another guarantee for the rights which it will be acquired subsequently.

 

From the petroleum right holders which are public establishments, one quarter (1/4) of the guarantees in the paragraph above shall be collected.

 

If the damage to arise from an operation or the financial obligations to be fulfilled toward the State is found to be higher than estimated, the right holder may be requested, with the approval of the Minister, to increase the guarantee he has previously given, provided that the increase is not characterized as punitive and that it does not reach excessive amounts.

 

Compensation of Damage through Guarantee

 

Article 69 - In case of damage to third parties or to the properties thereof, a court ruling shall be required in order to meet the damage through the guarantee placed at the disposal of the General Directorate.

 

Form and Time of Deposition of the Guarantee

 

Article 70 – A) One of the following, as seen suitable by the General Director, shall be accepted as guarantee:

  • Cash
  • Performance bonds to be given by the banks acceptable to the Government,
  • Treasury bonds or other bills issued under the guaranty of the Treasury,
  • Other assets which may readily be converted into cash when desired,

B) An additional 90 days time shall be allowed to the petroleum right holder who does not comply with the stipulations of the notification, within a period of not less than 30 days, specified by the Minister for the purpose of the modification or augmentation of the guaranty at an acceptable rate. Notification shall also be given that the permit, exploration license, lease and certificate owned shall be invalidated if the request is not complied with during this additional time either.

C) In case of invalidation, cancellation, relinquishment, total transfer or expiration of the petroleum right, 10 % of the guarantee shall be retained and the remainder shall be returned to the right holder immediately following the announcement of such cases in the Official Gazette. Depending on the character of the operation, the proportion of the operation to be retained may be increased or decreased by the General Directorate with the approval of Minister.

The guarantee retained shall be returned one year after the announcement has been made.

Unless the petroleum right holder submits sufficient information and reports relating to the activities it has conducted, the guarantee shall not be returned.

The sums stipulated in the court rulings given prior to or within one year following the announcement, on claims filed against the petroleum right holder in connection with operations, as well as the unpaid royalties and rentals, shall be deducted from the guarantee to be returned.
 

SECTION FOUR

Period Covered

Article 71- Rentals shall be assessed on the total of the exploration license or lease areas in accordance with taxation periods.

Emergence and Expiry of the Rentals

Article 72- Rentals shall be paid from the date of acquisition of exploration license or lease until the date of expiration or the relinquishment thereof for whatever reason.

Limited Rental

Article 73- In case any taxation period for a petroleum right holder does not cover one full year, the rental to be collected on the exploration license or lease area shall be calculated on basis of the number of days covered.

Should the date of granting of the license or lease not coincide with the beginning of the holders taxation period, the rental payable for the license or lease area for such period shall be assessed in proportion to the ratio obtained by dividing the number of days between the date of the granting of the license or lease and the end of the taxation period by the three hundred and sixty five.

Should the date of expiration or relinquishment, for whatever reason, of the license or lease not coincide with the end of the taxation period, the rental payable for license or lease area for such period shall be assessed in proportion to the ratio obtained by dividing the number of days between the beginning of the taxation period and date of expiration or relinquishment of the license or lease by the three hundred and sixty five.

Deductions from the rentals

Article 74- The expenditures undertaken by the licensee for geological investigations within its area or outside thereof, for determining petroleum prospects of its license area, shall be deducted from the total of the rental payable fort he period. The amount to be deducted may not exceed 50% of the rental.
 

Rental Declaration

Article 75- The holder of petroleum right shall file with the General Directorate, within two months following the taxation period, the rental declaration showing the license or lease areas on which it hold rights, the beginning and expiration dates of the licensee or lease rights pertaining to these areas, surface areas thereof, total of expenditures undertaken during the period which are deducted under Article 74 of the Regulations and other information relating thereto. The form of this declaration shall be determined jointly by the Ministry of Finance and Customs and the General Directorate. Fort he deductions from the rental, a certified list, which will be taken as the basis for audit, showing the details of the exploration expenditures actually made shall be attached to the rental declaration.

Supplementary Rental Assessment

Article 76 – Following the assessment of the rental on basis of declaration, supplementary rental shall be assessed by the General Directorate on the differences determined on basis of material evidence or legal criteria. Upon being notified of the assessment, those concerned may appeal to the Minister, this appeal suspends the collection of the amount subject to dispute.

Voucher for Rental Assessment

Article 77 – A) Upon filing of the rental declaration with the General Directorate, a rental assessment voucher shall be prepared. A copy of this voucher shall be given to the petroleum right holder or to the person who submits the declaration to the General Directorate on its behalf and the rental shall thus be assessed and levied. The copy of the rental assessment given to the petroleum right holder shall also serve as receipt for the declaration.

B) The following information shall be included in the rental assessment.

1. Sequence number of the voucher

2. Date thereof

3. Date of rental declaration

4. Taxation period to which the declaration relates

5. Declaration Number

6. Name of the petroleum right holder

7. Address of the petroleum right holder

8. Rental assessed

9. Total of deductions

10. Rental payable

11. Provisions relating to the appeals

12. Other information

C) Failure to receive the rental assessment voucher shall not preclude the assessment of the rental indicated in the declaration. In case the rental declaration is sent by mail or the rental assessment voucher is not collected by the right holder in person, the copy of the voucher to be given to the petroleum right holder shall be sent to the address given by the right holder in the rental declaration. The date and the number recorded in the postal registration book shall be recorded on the copy of the voucher retained by the General Directorate.

Manner and Time of Payment of the Rental

Article 78 – The rental shall be paid in one lump, within the two-month period for filing the declaration, to the tax office designated in the locality where the General Directorate is situated or to the tax office, in the same locality to which the right holder is attached.

Method of Collecting Rentals

Article 79 – In the collection of rentals the “Law on the Procedure for Collection of Public Claims” shall be applied.

Appeals and Suits

Article 80 – For the disputes arising in connection with rentals, appeals shall be made to the Minister. If the Minister finds the appeal justified, he shall have the action corrected. Appeal may be made to the Council of State against the decision of the Minister.

 

 

SECTION FIVE

Royalty

Petroleum Subject to Royalty Payment

Article 81 – Royalty at the rate of one eight shall be collected on the petroleum produced and stored by the petroleum right holder.

No royalty shall be collected from the petroleum right holder on the petroleum injected into the reservoir for the purpose of improving recovery, and which is recovered but, of necessity, released into the air through vaporization, or flared during the exploration, development and production operations in the license or lease area, or from the petroleum having no sales potential in the economic sense.

Petroleum right holder must take the precautions, current in the petroleum industry, for diligent and most efficient exploitation of the natural resources of the State. Royalty shall be collected from the petroleum lost because of failure to take these precautions.

Methods f Measurement

Article 82 – Measurement of petroleum subject to royalty shall be made in accordance with established petroleum industry practices and shall be expressed in petroleum units defined in Article 3 of the Law.

If the petroleum subject to royalty has not been or cannot be measured for reasons beyond the control of the right holder as approved by the General Directorate, the quantity shall be estimated on the basis of pressure decline, production decline, or oil-gas-water equilibrium or one of the other sound and acceptable methods or combination of such methods.

Collection Of Royalty Ones Only

Article 83 – Once the royalty is paid, no royalty shall be payable on the petroleum which the holder of petroleum right has injected into another reservoir in the exploration license or area and re-produced there from.
Period of Royalty Assessment

Article 84 – The assessment period for royalty is one month. Royalty shall be assessed for each license or lease area separately. The assessment period may be extended by the Ministry of Finance and Customs and the General Directorate for a period not exceeding three months, provided that it applies to all licensees and lessees.

Calculation of Royalty

Article 85 – The amount of royalty to be assessed shall be calculated by multiplying the total of the units of each type of petroleum produced and stored during the assessment period from the license or lease area by the well head prices at the time of production, adding from the results for each type of petroleum and taking one eighth of this total.

Royalty Declaration

Article 86 – Licenses and lessees must submit to the General Directorate, within the first fifteen days of the month following the assessment period, the royalty declaration containing the amounts with respect to the type and category of petroleum produced and stored during the period of assessment, the well head price, the amount of royalty payable thereon and other information. The form of the declaration shall be determined jointly by the Ministry of Finance and Customs and the General Directorate.

Royalty Assessment Voucher

Article 87 – Upon filing by the petroleum right holder, of the royalty declaration to the General Directorate, a royalty assessment voucher shall be prepared.

A copy of the voucher shall be delivered to the petroleum right holder or to the person filing the declaration with the General Directorate on its behalf and the royalty shall be assessed and levied.

The provisions of the Regulations relating to the rental assessment voucher and to the supplementary rental assessment shall also be applied, with due consideration of the special futures of the royalty, for the royalty assessment voucher and for the supplementary royalty assessment.

Payment of Royalty

Article 88 – Royalty that the right holder is not notified to pay in kind shall be paid in cash.

Method of Collection of the Royalty

Article 89 – In the collection of the royalty, the provisions of the “Law on the Procedure of Collection of Public Claims” shall be applied.

Appeals and Suit

Article 90 – The appeals relating to the disputes arising from royalties shall be made to the Minister. If the Minister finds the appeal justified, he shall have the action corrected. Against the decision of the Minister appeal may be made to the Council of State.

Collection of Royalty in Kind

Article 91 – The General Directorate may collect all or a portion of the royalty in kind for one, several or all of the assessment periods and may also collect it part in kind and part in cash, on basis of the types and categories of petroleum subject to royalty. However, the royalty, which the producer of petroleum is, required to pay in kind on basis of type and category of the petroleum produced from a license or lease area during any one period shall not exceed one eighth of that type and category.

 

Duration of Free Storage

Article 92 – Liquid petroleum to be delivered to the credit of the Government in the producer’s tankage shall be stored in these tanks free of charge for a period of 30 days. For petroleum stored longer than this period, the producer may demand a charge or requests removal or use it or its own purposes by paying the wellhead price. The 30-day period for free storage shall commence from the date of receipt by the General Directorate of the notice from the Petroleum right holder that the petroleum is available for the delivery.

Time of Payment of Royalty in Kind

Article 93 – The royalty to be paid in kind shall be paid following the completion of the assessment longer than one month has been approved, the General Directorate may, on his own or by agreement with the producer, also request the delivery to be made during the assessment period and credited to the royalty which will be assessed for that period.

Form and Time of Payment of Royalty in Cash

Article 94 – The royalty shall be paid, within the period of two months (*) allowed for filing declaration, in one lump to the tax office designated at the locality where the General Directorate is situated or to the tax office, in the same locality, to which the petroleum right holder is attached. A copy of the receipt evidencing the payment shall be given to the General Directorate.

(*) Deleted as; reportedly, erroneous. The General Directorate has initiated procedure for formal correction.

PART FIVE

Taxation

SECTION ONE

General Principles

Applicable Provisions

Article 95 – Provided that the provisions of the Law relating to taxation are reserved, the provisions of the Income Tax and Corporation Tax Laws and other Laws relating to taxes, duties and fees, the Tax Procedure Law and the Law on the Procedure for Collecting Public Claims, attachments and modifications thereof shall also be applied to the petroleum right holders.

Differentiation of Operations

Article 96 – Provisions of Regulations relating to taxation shall be applied only to the transactions of the petroleum right holder relating to the operations and consequences thereof. General provisions shall be applied to activities of the petroleum right holder, which remain outside of its operations.

If the petroleum right holder is conducting the operations together with the activities, which are outside thereof, the holder must allocate separate capital for the operations, must maintain separate records of accounting thereof and file separate tax returns.

Unification of Operations

Article 97 – In case of two or more producers combining, with the approval of the General Directorate, their operations, they shall be separately subject to taxation as if they are conducting operations independently and in their own name and behalf.

Accounting Liberty

Article 98- The provisions of the Law and of the Regulations relating to taxation, together with tax laws and the “Tax Procedure Law”, shall be applied in only the determination of the financial income of the petroleum right holder and the calculation of the taxes payable on such income. They shall not constitute the basis for entries to be made into the legal accounting books. Provided that the records and the accounts are not in contrast with the provisions of the “Tax Procedure Law” and comply with sub-article two of Article 96 of the Regulations, they may be freely arranged in the preferred manner and method in accordance with the character of business. However, if there is a difference between the income recorded in the legal books and the financial income taken as base for calculation of the tax, the difference shall be reported to the tax office by means of a list attached to the tax return.

SECTION TWO

Taxes to be Levied on Incomes

Taxation of the Incomes Arising from Operations

Article 99 – Incomes realized from the operations are subject to Corporation Tax. The petroleum right holder shall, further, be obliged to withhold and declare the taxes stipulated by the Income Tax Law and the Corporation Tax Law.

In determining the Corporation Tax to be paid and the income and Corporation Taxes to be withheld, the principles in Articles 100 to 103 of these Regulations shall be observed.

Calculation of Net Income

Article 100 – Net income subject to taxation shall be calculated in accordance with the “Corporation Tax Law”, taking also account the deductions under Article 97 of the Law and the principles set forth in these Regulations.

Rate of Tax

Article 101 – The Corporation Tax shall be calculated by applying the tax rate stipulated in the Corporation Tax Law to the net income established in accordance with Article 100.

In the withholding of the tax stipulated in the Income Tax Law number 193 and the Corporation Tax Law Number 5422, the relevant provisions of these Laws shall be applied.

Limitation of Liability

Article 102 – The sum, which the petroleum right holder is obliged to pay, of the corporation tax and the tax to be withheld under the Income and Corporation Tax Laws shall not exceed 55 % of the net income established in accordance with Article 100 of the Regulations.

Deductions from the Amount of Tax

Article 103 – Should the total of the taxes calculated in accordance with Article 101 of the Regulations exceed the limit of liability, deductions equal to the excess amount shall be made in the following sequence:

A) The amount of tax in excess of the limit shall first be deducted from the tax to be withheld under the Income and Corporation Tax Laws.

B) In case the income and corporation taxes to be withheld do not offset the deduction to be made, the remaining amount shall be deducted from the corporation tax established on basis of the net income under Article 100 or these Regulations.

In case a deduction is made, a table showing the manner of calculation of the amount of tax to be paid under the Petroleum Law shall further be attached to the relevant tax return to be filed by the petroleum right holder.
 

SECTION THREE

Deductions and Valuation

General Principles Regarding Deductions

Article 104 – Petroleum right holder may deduct from its gross income the expenses allowed under the Petroleum Law and the Income and Corporation Tax Laws, provided that such expenses are related to the taxation period and have been incurred.

The amounts to be set aside from the expenses charged to the capital account at the rate jointly determined by the Ministry of Finance and Customs and the General Directorate under the Tax Procedure Law, the Petroleum Law and the Regulations, as well as, those optional expenditures which the petroleum right holder elected to deduct as expense, on basis of its optional right under the Law, shall be accepted as deductions accrued during the period of taxation.
 

 

Rental to be Entered as Expense

Article 105 – Rental to be entered as expense during a taxation period under Article 77 of the Regulations after having made the deductions described in Article 74 of the Regulations for such period.

Residual Values to be Entered as Expense in Case of Transfer or Abandonment

Article 106 – Deduction, as expense, of the unrecovered remainder of the economic asset abandoned because of the expiration of the exploration license and other petroleum rights held by the petroleum rights held by the petroleum right holder is conditional to the abandonment being final.

In case of transfer of the economic asset to others, the petroleum right holder may enter as expense the unrecovered residual value on condition that the total value of the transfer is entered as income.

Depletion Allowance

Article 107 – Depletion allowance consists of the sum of the exploration expenses, intangible drilling costs and the cost of drilling wells which are not commercial producers, activated by the petroleum right holder by charging to the capital account.

Depletion allowance, for each license area and individual lease area, shall be written off separately at rates to be specified by the Ministry of Finance and Customs and the General Directorate. From the amount thus established, shall be deducted the cost and the value of the portion of the area assigned for a purpose other than petroleum production, as well as, the residual value to the petroleum right holder, of the area on the date of termination of the operation.

Expenditures the Capitalization of which is Optional

Article 108 – Under the Law, expenditures which the petroleum right holder is free to enter as expense or to capitalize consisting of exploration expenses, intangible drilling expenses and the cost of drilling uneconomical wells constitute the expenses the capitalization of which is optional.

Whether these expenses are made directly by the petroleum right holder or, by others on its behalf as per an agreement shall not affect the use of the optional right.

Exercising of the Option

Article 109 – The petroleum right holder shall exercise the option, granted under the Law, as to whether the exploration costs, intangible drilling costs and the costs of non-economical wells, shall be capitalized or shown as expense, for the whole of the expense groups defined in the Law and the Regulations and described above, and separately for each license area, at the time of filing the tax return relating to the first taxation period during which those expenses incurred.

If these expenses are not entered as expenses in the taxation period during which they are incurred, they shall be considered as having been capitalized.
 

Exploration Expenses

Article 110 – Excepting the expenditures for the materials and installations with a useful life of more than one year and for general administrative expenses, all expenses which are incurred in the search of petroleum-bearing tracts and defining the extension thereof are exploration expenses.
Other expenditures incurred in connection with studies and surveys of preliminary nature and with the geological and geophysical operations shall be deemed as exploration expenses.

Intangible Drilling Costs

Article 111 - The costs incurred for all labor, fuel, repairs, maintenance, transportation, materials and supplies for drilling, cleaning, deepening, and completion of the wells or in preparation for operations or in connection therewith other than the cost of the materials and installations with a useful life of more one year but which are not installed or used, or are still useful one year after installation or the beginning of use, or having a scrap value, are intangible drilling costs.

All costs of labor, fuel, repairs, transportation and supplies and the like which are incurred in the preparation stage preceding the drilling of wells, in clearing and leveling the land, providing water, building roads, survey of the land, geological measurements, and in erection of drilling rigs necessary for drilling or preparing the wells to produce petroleum or gas, or in the construction of tankage, shall be considered intangible drilling costs.

Costs of Drilling Non-economical Wells

Article 112 – Drilling costs of the non-economical wells consist of intangible drilling costs, other than drilling tools and similar equipment, and the expenditures for any tangible or economic value used in or required for the drilling of non-economical wells.

 

Expenditures not Electively Chargeable to Capital Account

Article 113 – Although incurred in the form of exploration or intangible drilling costs the expenditures, which shall not be accepted as expense selective for capitalization, are shown below:
A) The cost of materials and installations which have a useful life of more than one year and general administrative expenses,

B) The cost materials and installations which have a useful life of longer than one year but which have not been installed or used or which are still useful one year after installation or after the beginning of use or, having a scrap value.

The materials used in petroleum wells or in the construction work done in the petroleum field, and the drilling equipment, the gathering and production piping and casing, tanks, motors, boilers, machinery and the like shall not be considered as expenses electively chargeable to capital amount.

The cost of labor, fuel, repairs, maintenance, transportation, supplies and materials relating to the equipment, utilities, construction and installations used for treating the petroleum and the gas but not used in or required for drilling of wells shall not be accepted as expenses electively chargeable to capital account.

Values Subject to Depreciation

Article 114 – Outside of the exploration expenses, intangible-drilling costs and the expenses incurred in drilling non-economical wells, which have been capitalized by the petroleum right holder, the cost of the economic values and the expenses relating to the acquisition of those values and the erection of installations thereon shall be written off through depreciation.

In the allocation of depreciation for these expenses, the rates in the depreciation tables prepared and announced by the Ministry of Finance and Customs in accordance with the provisions of the Tax Procedure Law, No.213, shall be applied.

Economic values to be written of through depreciation are indicated below:

A) Buildings, equipment, machinery and other physical assets with useful economic lives exceeding one year,

B) Intangible rights and assets such as patents, trade marks, rights arising from agreements, capitalized expenses incurred for initial establishment and organizations, service fees,

C) Costs of surface leases exceeding one year (the land is not subject to depreciation).

Valuation of Economic Assets

Article 115 – Economic assets of the petroleum right holder companies shall be evaluated in accordance with the provisions of the Tax Procedure Law relating to valuation. Capitalized exploration expenses, intangible drilling costs and the cost of drilling uneconomic wells shall be evaluated on basis of the values as recorded.

Such values may not exceed the actual expenses made for these purposes.

 

PART SIX

Imported Economic Assets, Proceeds from the Sale of Petroleum and Transfers

SECTION ONE

Imported Economic Assets

Imported Capital and the Determination of the Values Imported Economic Assets
 

Article 116 – In order to provide for the determination of the kinds and the rates of exchange of the kinds and the rates of exchange of foreign currency for the assets to be transferred abroad under sub-articles two and three of Article1116 of the Law and Article 124 of the Regulations, the values of all cash funds and rights arising there from and of materials and other assets forming part of capital assets base, imported into Turkey by the petroleum right holder for use in the operations, shall be designated jointly by the Deputy Ministry and General Directorate on the basis of the kind, amount and rate of exchange, Turkish Lira counter values, and the dates of importation, in accordance with the following principles :

A) Determination of the kind of foreign currency,

1. The kind of foreign currency for the imported cash funds and rights thereto and
other assets shall be registered in the foreign currency in which they are imported.

2. The kind of foreign currency for the imports to be made with foreign exchange
allocated from Turkey against the imported cash funds and the rights thereto shall be determined according to the kind of foreign currency of the cash funds and the rights thereto, set forth as coverage. The cash funds and rights thereto imported by the petroleum right holder shall, with the advance approval of the Deputy Ministry, be deposited into the foreign currency account opened with a competent bank. Foreign currency deposited to this account shall not be considered as having been imported into Turkey. In case permission is granted for importation by purchasing another kind of foreign currency against the cash funds and the rights thereto deposited to this account, the required amount of foreign currency shall be converted into Turkish Liras and the foreign currency required shall be bought with these Turkish Liras. The date of importation of such assets imported in this manner shall be deemed as the date of converting into Turkish currency the cash funds and the rights thereto deposited to the foreign currency account.

3. In the determination of the kind of foreign currency for imports other than the
cash funds and the rights thereto, the kind of foreign currency for imports other than the cash funds and the rights thereto, the kind of currency actually paid in cash or on account to that country by the petroleum right holder or on its behalf for obtaining the currency of the country from which the importation is made shall be taken as basis.

The kind of foreign currency for imports other than the imported cash funds and the rights thereto, made against the foreign currency transferred from Turkey in accordance with Article 125 of the Regulations, shall be determined in accordance with the kind of the foreign currency transferred.

4. The kind of foreign currency for imports other than the cash funds are rights thereto envisaged in sub articles (2) and (3) above, shall be determined according to the currency of the country from which importation is made. A portion not exceeding 20% of the imported assets under paragraphs (2) and (3) and the present paragraph may be determined in the currency of the country to which the petroleum right holder belongs, as designated under Article 121 of the Regulations, provided that permission is obtained from the Deputy Ministry in advance, and the kind of foreign currency thus determined may not be altered afterwards. In the application of this paragraph, both the total value of imports and the 20% rate shall be-calculated cumulatively from the date the petroleum right holder has stated the operation.

B) The rate of exchange for the imported cash funds and rights thereto and other assets shall be determined on basis of the official rate of exchange of the Turkish currency against the foreign currency of importation prevailing at the time of importation. The rate of exchange thus determined shall be taken as basis for the transfers the petroleum right holder will affect abroad, on basis of Article 124 of the Regulations, against its imported capital.

C) The value in foreign currency of the imports other than cash funds and the rights thereto shall be determined jointly by the Deputy Ministry and the General Directorate according to acceptable vendor invoices, price lists, catalogues and any or several of other documents and by expert advice, if required. The fee for expertise shall be met by the petroleum right holder companies effecting the importation.

D) Within 90 days of the preparation and presentation of the import declaration under Article 117 of the Regulations, the statement of the petroleum right older regarding the kind and rate of the foreign exchange and the question of whether it should be added to the imported capital under provisions cited below shall be examined and decided jointly by the Deputy Ministry and the General Directorate. In case other documents, in addition to those submitted together with the import declaration, are required by the Deputy Ministry and the General Directorate, from the petroleum right holder, the interval between the date of requisition and the date of submission of such documents shall be added to the 90-day period.

a. The amount obtained as a results of deducting the transfers made abroad against the imported assets under Article 124 of the Regulations and the sales income retained abroad under sub-article (B) of Article 119 of the regulations from the sum of all cash funds and rights pertaining thereto and the materials and other assets forming a part of the capital assets base imported into Turkey and of which the kind of foreign currency, the amount of foreign currency and the rate of exchange and the Turkish Lira counter value will be recorded by the Deputy Ministry in the sequence they are imported in accordance with sub-article one of Article 116 of the Law and the sub-article (B) above, shall constitute the imported capital.

b. In case the total of the assets transferable abroad under Article 123 of the Regulations exceeds the total of the imported capital defined in paragraph (a) above, the cash funds, rights pertaining thereto and other values which constitute the coverage for the difference and which are not transferred but are retained in Turkey by the petroleum right holder although transferable under paragraph 1 of sub-article (B) of Article 124 of the Regulations, shall, upon application by the petroleum right holder, be added to the imported capital as of the date of application and on basis of the kind of currency of the country to which the holder belongs.
 

c. The portion in excess of the imported capital of the income which are arise from the sales abroad of petroleum and is brought to Turkey by the petroleum right holder, shall be added to the imported capital as of the date of importation and on basis of the kind of currency imported.

In case the total of the assets transferable abroad under Article 123 of the Regulations does not exceed the total of the imported capital as a result of importing the said sales income into Turkey, the excess amount shall be added to the imported capital as of the date of importation and on basis of the kind of currency imported.

d. The imports executed under sub-article two of Article 115 of the Law or with foreign exchange obtained in Turkey shall not be added to the imported capital.

e. Upon request of the petroleum right holder, the deputy Ministry may ensure that cash funds and the rights pertaining thereto have been imported in accordance with this article under the assumption that the foreign currency owed by Turkey to any person, acceptable to the Deputy Ministry, who has connection with the petroleum right holder directly o through capital sufficient for transfer, has been transferred abroad and the same foreign currency has been reimported to Turkey by the petroleum right holder.

Declaration Required for the Imported Assets

Article 117 - For the purpose of determining the imported capital in accordance with Article 116 of the Regulations, the petroleum right holder shall file with the General Directorate, within 30 days the date of importation, an import declaration with a copy thereof, describing the nature and value of all cash funds and rights thereto and the materials and a other assets forming a part of the capital asset base imported into Turkey for use in operations. The copy of this declaration shall be sent to the Deputy Ministry. This period may be extended by the General Directorate for not longer than 6 months in case there are such acceptable reasons as the unsuitability of the accounting system and purchasing procedures for the filing of the import declarations within one month, or squeezing large scale investments into a short period or inability to procure in time the documents relating to the assets imported.

The following information relating to cash funds and the rights pertaining thereto and other assets shall be given in the import declaration:

1. Date of importation (a copy of the bank’s foreign currency purchase voucher shall be attached to the declaration),

2. Nature and kind,

3. Kind of the foreign currency,

4. Method of determining the kind of the foreign currency (The paragraph of the sub-article (A) of Article 116 of the Regulations on which it is based on shall be indicated in the declaration. If Paragraph 4 of the sub-article (A) of the Article 116 of the Regulations is invoked, the originals or the copies of the certificate of origin or a corresponding document or the certificate of permission obtained from the Deputy Ministry there under; if the permission is granted under paragraph 2 of the sub-article (A) of the same Article, the original or the copy of the bank’s voucher for foreign currency purchase and sale thereof shall be attached to the declaration),
 

5. Value in foreign currency,

6. Rate of exchange,

7. Value in Turkish Liras,

8. Date and number of the application filed with the General Directorate under Article 127 of the Regulations, for assets other than the cash funds and the rights pertaining thereto. (One copy of each invoice certified by the General Directorate according to Article 127, shall be attached to the declaration. A notation shall be made on these invoices by the customs administrations, indicating that their contents have been imported into Turkey and showing the date and the number of the customs entry declaration and it shall be dated and signed by the authorized official after setting thereunto the seal of the customs administration.),

9. Information required for establishing the identicalness, in case of transfer in the future of the asses other than the cash funds and the rights pertaining thereto, in accordance with Article 129 of the Regulations (the copy of the invoice, attached to the import declaration in the form stipulated above, may be deemed sufficient for this purpose),

10. On basis of which paragraph of Article 116 of the Regulations the cash funds, the rights pertaining thereto and other assets have been imported,

The petroleum right holder shall attach the import declaration and a copy thereof to any applications it files in accordance with paragraphs (b) and (e) of the sub-article (D) of the Article 116 of the Regulations.
 

 

 

 

SECTION TWO

Income from the Sales of Petroleum

Provisions to be Applied to the Income from the Exported Petroleum

Article 118 – With regards to the income arising from the sales of petroleum exported by the petroleum right holder, the Law and other laws, regulations and decrees as may be applicable pursuant therefor shall be applied.

Retention Abroad or Importation into Turkey of the Income from the Exported Petroleum

Article 119 – A) The petroleum right holder may retain abroad the foreign currency earned from the crude petroleum or products thereof or from t natural gas allowed for exportation under Article 13 of the Law. The petroleum right holder must enter into its legal books the foreign currency obtained from the petroleum or natural gas allowed for exportation, by converting it into Turkish Liras on basis of exchange rate prevailing at the time of exportation.

B) The foreign currency acquired by the petroleum right holder from the exported petroleum or natural gas and retained abroad:

1. May be set of, by applying the principles relating to the exchange rates stipulated in sub-article three of Article 16 f the Law, in the transfer of the registered capital imported into Turkey or in the transfer of the net transferable assets, if any, which exceed the said capital.
2. May be utilized under the Law in payments in foreign exchange required for the operations of the petroleum right holder in Turkey; however, such payments shall not be registered.

In case of foreign companies exporting from their shares of petroleum and natural gas produced from the fields discovered during exploration conducted jointly with petroleum right holding Turkish joint stock companies, the foreign currency retainable abroad may also e set-off, under the above provisions, against the transfers of the foreign partner or is used for its payments in foreign currency.

C) The petroleum right holder must bring into Turkey, as of the end of the June each year, the amounts remaining, after the set off and utilization transactions stipulated in sub-article (B), from the foreign currency retained abroad, must establish its conformity by submitting documents relating to the transfer and must deposit the balance to the special foreign currency to be opened at the Central Bank of the Republic of Turkey.

Petroleum right holder may request to utilize the funds accumulated in the special account for the cases cited in sub-article (B).

 

Declaration Regarding Income from Petroleum Retained Abroad

Article 120 - In accordance with the currency exchange regulations, the petroleum right holder shall file a declaration with the Deputy Ministry and the General Directorate within the first month of the following year, stating the estimated amount of foreign exchange which it will need in aid following year for its operations and obligations under the Law in Turkey, from the income sale of petroleum exported during the (previous) year and which were retained abroad. The petroleum right holder is obliged to report, on a quarterly basis, to the Deputy Ministry and to the General Directorate the quantities of the petroleum, natural gas and petroleum products exported the amounts, in Turkish liras and foreign currency, of the proceeds realized there from.

SECTION THREE

Transfers
 

The Country to which Petroleum Holder Belongs

Article 121 – For determination, in the application of the Law and the Regulations, of the kind of foreign currency for the assets to be transferred by the petroleum right holder, the country to which the petroleum right holder belongs, may be accepted under one of the following criteria:

A) The place where the petroleum right holder is registered,

B) The place or places where, a legal person or legal persons directly or indirectly who own more than 25 % of the main portion of its profits, or who have authority to make decisions in its administration, to exercise control or to appoint its directors, are registered or the nationality of the majority of such persons.

In order to use one of the above criteria, chosen by the petroleum right holder, as the basis for determining the country to which it belongs, at least 80% of the total of the cash and the rights pertaining thereto, determined in accordance with paragraph 1 of sub-article (A) of Article 116 of the Regulations, must be in the currency of the country to which the transfer is being requested.

In the case of petroleum right holder belonging to more than one country, the proportion in which the petroleum right holder belongs to each country shall be taken as basis for the determination, on basis of the country to which the holder belongs, of the transfers under Article 124 of the Regulations and of the kind of foreign currency of the imported assets in accordance with paragraph 4 of sub-article (A) of Article 116 of the Regulations.

Transfer Declaration

Article 122 – The petroleum right holder shall file with the Deputy Ministry and the General Directorate a transfer declaration, the form of which is prepared jointly by the Deputy Ministry and the General Directorate, within the period specified for filing of the corporation tax return, following the filing of the same or on the date of filing its application for the transfer abroad.

Information to be included in the transfer declaration:

A) The statement of accounts of the petroleum right holder as of the end of the taxation period or the date of application (a copy of the balance sheet or the trial balance on which this information is based shall be attached to the declaration),

B) Depletion allowances set aside per years,

C) Itemized list, accrual dates and amounts of all kinds of taxes, duties, fees, rentals and royalties which are owned to the State but which have not yet been paid,

D) Itemized list and the determined values of the capital assets allocated by the petroleum right holder for the operations,

E) Itemized list of the cash funds and the rights pertaining thereto and other assets required in Turkey by the petroleum right holder from sources other than petroleum operations but used therein with the permission of the Deputy Ministry and the dates and numbers of the authorization of the Deputy Ministry for the allocation of the same to petroleum operations,

F) Itemized list of the total imported capital showing kind of foreign currency, amount of foreign currency, rate of exchange and the Turkish lira equivalents, as totals and in the order of importation, (The income from sales retained abroad by the petroleum right holder, which must be shown along with the country to which exportation was made),

G) Regarding the transfers abroad requested by the petroleum right holder,

1. Itemized list, of the cash funds and other rights pertaining thereto, showing the kind of foreign currency, rate of exchange applied and the amounts in Turkish Liras and foreign currency,

2. Nature, kind and amounts of other assets, the date of the import declaration if they are among the assets imported previously, the values in Turkish Liras to be determined in accordance with Article 98 of the Law, rate of exchange applied, values in foreign currency and the customs house from which exportation shall be made (the assets which preserve their original identity shall be shown separately as a single item),
 

H) Whether or not the cash funds, the rights pertaining thereto and other assets will be transferred by the petroleum right holder against the imported capital.

 

 

Determination of the Amount of Transferable Assets

Article 123 – the assets, which the petroleum right holder may transfer abroad, shall consist of the sum of the amounts calculated under sub-article (A) and sub-article (B) below. However, the amount to be transferred in cash may not exceed the portion calculated under sub-article (A).

A) The following item shall be deducted, in the order given and under the principles stipulated below, from the sum which is on hand at the date of application, of the total of the cash funds and the rights pertaining thereto allocated by the petroleum right holder to the petroleum operations or acquired from petroleum operations in Turkey and the cash funds and the rights pertaining thereto which, although acquired from the sources other than the petroleum operations, are allowed by the Deputy Ministry to be used for petroleum operations in Turkey:

1. The portion required to pay the unpaid taxes, dues, royalties and rentals (In case this portion is grater than the total of the cash funds and the rights pertaining thereto, the difference shall be deducted from the capital assets base in accordance with paragraph 1 of sub-article (B). In this case, no cash transfer may be made.),

2. The portion in excess of the amount remaining from the cash funds and the rights thereto acquired from sources other than petroleum operations after the deductions from the capital assets base in accordance with paragraph 2 of sub-article (B). (If there is no excess, it will suffice to deduct cash funds and the rights pertaining thereto acquired from sources other than petroleum operations from the capital assets base. In case the excess portion is greater than also the amount which remains after deducting the items specified in paragraphs 1 and 2 from the total of the cash funds and the rights pertaining thereto, no transfer may be made),
 

B) The following shall be deducted, in the order given, from the total value of the capital assets allocated to or acquired from the petroleum operations in Turkey by the petroleum right holder and the value of the portion of the capital assets on hand at the date of application, which, although acquired from sources other than petroleum operations, are allowed by the Deputy Ministry to be used in petroleum operations, calculated according to Article 98 of the Law:

1. The portion of the amount required for the payment of all kinds of taxes, duties, fees, rentals and royalties payable to the State but still unpaid, which is not covered by the existing cash funds and the rights pertaining thereto as set forth in paragraph 1 of sub-article (A) (In case this amount exceeds the capital assets base, no transfer may be made),

2. The portion of the values as determined in accordance with Article 98 of the Laws as of the date of allocation to petroleum operations, of the capital assets which, although acquired in Turkey from sources other than petroleum operations (In case this amount exceeds the capital assets base, the difference shall be deducted, in accordance with paragraph 3 of sub-article (A), from the sum of the cash funds and the rights pertaining thereto. In such case, the transferable amount shall be confined to the amount determined in accordance with sub-article (A). On the other hand, no transfer may be made if the total of this amount and the amount under paragraph 1 above exceed the capital asset base),
 

3. The total, as of the date of allocation to petroleum operations of the cash funds and the rights pertaining thereto acquired from sources other than petroleum operations in Turkey but allowed by the Deputy Ministry to be used for petroleum operations. (If this amount exceeds the amount which remains after making the deductions specified in paragraph 2 above, from the capital assets base, the difference shall be deducted, in accordance with paragraph 2 of sub-article (A), from the total of the cash funds and the rights pertaining thereto. In such a case, the transferable amount shall confine to the amount determined in accordance with sub-article (A). On the other hand, no transfer may be made if the sum of this amount and the amounts in paragraphhs1 and 2 above exceeds the capital assets base. In case the said total does not exceed the capital assets base, the difference may be transferred as-is).

Determination of the Kind and Rate of the Foreign Currency to be Transferred

Article 124 – The kind and the rate of exchange of the foreign currency, which may be transferred abroad by the petroleum right holder under Article 124 of the Regulations, shall be determined in accordance with the following principles:

A) 1. For the imported assets preserving their identity, the kind and the rate of exchange determined at the time of importation in accordance with Article 116 of the Regulations shall be taken as basis. These assets shall be transferred disregarding the order of importation, on basis of the kind and the rate of exchange determined at the time of importation, by being deducted from the imported capital.

2. Imported cash funds not yet used shall be transferred, disregarding the order of importation, by being deducted from the imported capital.

B) Unless there is proof to the contrary, the kind and the rate of exchange of the foreign currency to be used as basis for the transfer of the cash funds and the rights pertaining thereto not covered by the sub-article (A) of this Article and other assets not preserving their identities shall be determined as follows:

a. In case the total assets which may be transferred under Article 123 of the Regulations exceeds the total of the capital defined in paragraph (a) of sub-article (D) of Article 116, the portion corresponding to the currency of the country to which the petroleum right holder, belongs and the current rate of exchange; and, also the cash funds and the rights pertaining thereto and any part of other assets may, provided that the stipulation of the sub-article (A) of the present Article is reserved, be transferred against the imported capital on basis of the kind of currency and the rate of exchange to be determined in accordance with the sub-article (C) of this Article.

b. If the amount of increase in the imported capital in spite of the fact that the total of the assets transferable under Article 13 of the Regulations does not exceed the total of the imported capital, as defined in paragraph (a) of sub-article (D) of Article 116, the part equal to this difference in the increase may be transferred, as prescribed in paragraph 1 of the present sub-article, on basis of the kind of currency of the country to which the petroleum right holder belongs and at the current rate of exchange.
 

C) Transfers other than under paragraphs 1 and 2 of sub-article (B) of the present article, shall only be made against the provision of sub-article (A) is reserved and that there is no proof to the contrary, and on the basis of the order of importation, determining the kind and the rate of exchange of the foreign currency, in accordance with paragraph (a) of sub-article (D) of Article 116 of the Regulations.

Review of Applications for Transfer, Granting of Transfer Permit, and Allocation of Foreign Currency

Article 125 – Transfer requests, of which the details described in the transfer declaration of the petroleum right holder shall be reviewed jointly by the Deputy Ministry and The General Directorate on basis of the principles stipulated in Articles 121, 123 and 124 of the Regulations. Following the review, transfer permit shall be granted and the required foreign currency shall be allocated by the Deputy Ministry for the cash funds and the rights pertaining thereto, which are found suitable for transfer.

Declaration to be attached to the applications for importation, which will be made with the foreign currency to be allocated by the Deputy Ministry

Article 126 – The applications which the petroleum right holder shall file under sub-article 2 of Article 115 of the Law for the transfer abroad of the economic assets, cash funds and the rights pertaining thereto acquired in Turkey from sources other than petroleum operations, shall contain the following:

a. Reasons on which the request for transfer is based,

b. Nature, quantity, value of the economic assets to be imported and the operations in which they shall be used,
 

c. Approximate dates of importation of the cash, services, materials and other economic assets to be imported.

The petroleum right holder shall indicate the place of allocation of the economic assets imported on basis of sub-article 2 Article 115of the Law in the declarations to be prepared on quarterly basis, the first one covering the period between the beginning of January and the end of March, and filed with the Deputy Ministry within one month following the end of the quarterly period it covers.

 

PART SEVEN

Imports, Transfers, Exports

SECTION ONE

Importation

Importation, Exemption from Import Taxes and Duties

Article 127 – for the importation of materials to be used in petroleum operations, the petroleum right holder shall file an application with the General Directorate. The original and four copies thereof, along with translation in five copies, of the invoices of the materials, which it wants to import, shall be attached to the application. Upon review of the application, the General Directorate shall notify the petroleum right holder that materials to be imported qualify for exemption from customs duties and other taxes and dues.

In case the petroleum operations are conducted through a contractor and the importation is to be made by the contractor, the right holder shall submit to the General Directorate a certified copy of the agreement it signed with the contractor along with a warranty to the effect that the petroleum right holder assumes the responsibility which may arise from the non-compliance of the contractor with the provisions of the Law and Regulations.

Upon review of the above documents, the General Directorate shall notify the petroleum right holder that exemption from the customs duties and other taxes and dues for the materials to be imported by the contractor shall be granted. Following the notification, the contractor shall apply to the General Directorate for materials he will import duty-free. The application filed shall contain a certification by the petroleum right holder stating that the materials subject to importation are necessary for the petroleum operations. The contractor shall send to the General Directorate the copy of the invoice relating to the materials, which he imported in his known name and behalf within 30 days following the date of importation.

The General Directorate, if convinced that the materials shown in the invoices relating to the importations by the petroleum right holder, are necessary for petroleum operations, shall enter a notation on the back of the invoices stating that it is necessary that the importation be made free of customs duties and other import taxes and dues under Article 112 of the Law. It shall forward three copies of the Turkish translation of the invoices, attached to a covering letter, to the customs house. The materials shown in these invoices shall be imported under exemption without need to obtain permission from any authority.

Where conviction is reached the materials shown in the invoices submitted in accordance with the above sub-article are necessary for petroleum operations but their importation free of customs duties is not possible, the General Directorate shall enter a statement that effect on the back of the invoices and send three copies of Turkish translations, attached to a covering letter, to the customs house. The materials covered by these invoices shall be imported by paying customs duties and other import taxes and dues.

The petroleum right holder may import, free of customs duty and on basis of market price, the crude oil which is required for its own operations and which cannot be procured from domestic sources. To realize such importation, a letter of notification shall be submitted to the General Directorate in five copies. This notification shall contain the name of the importer, the customs house of importation, the kind and the quantity of the petroleum, tariff number and other information as may be deemed necessary by the Deputy Ministry and the General Directorate. The General Directorate shall enter notation on three copies of the letter of notification on three copies of the letter of notification hat duty-free importation into the country is necessary and, after signing and sealing the same, forward them to the customs house concerned. The importation shall be executed without need for any other permission.

SECTION TWO

Transfer and Exportation of Imported Materials

Transfer

Article 128 – A) By informing the general Directorate, materials imported under exemption may be transferred to another petroleum right holder entitled to exemption, to its representative or contractor, free o f customs duties, taxes and dues. Applications for transfer shall be filed with the General Directorate, showing the name and the address of the transferor and the transferee. The General Directorate shall inform the Deputy Ministry, indicating the customs house concerned, that the transferee is a petroleum right holder, his representative or contractor entitled to exemption. Under these conditions, the exemption for the materials transferred shall continue.

B) If the transfer of the materials imported duty-free to a person not entitled to exemption or to the use thereof to a person not entitled to exemption or to the use thereof in activity not considered petroleum operation is requested by the petroleum right holder, the General Directorate, with the consent of the Deputy Ministry, shall approve this transfer or use under the provisions of Article 112 of the Law and shall advise the customs authorities with a letter. Petroleum right holders may transfer, free of customs taxes and duties, all kinds of materials, machinery and equipment which have reached the end of their economic lives because of having been used for ten years or longer, first to public institutions. Materials of this category as not wanted by public or private institutions shall be transferred as scrap to the Directorate General of MKEK (Machinery and Chemistry Industries Corporation)

Petroleum products derived from petroleum which is imported duty-free may be transferred, in accordance with the procedure designated by the Deputy Ministry and under the conditions stipulated in Article 112 of the Law, to persons not entitled to exemption or may be used by the petroleum operation.

C) In case of transfer or sale of the imported materials other than the transfer of petroleum products, to another petroleum right holder or to another person, the profit realized by the petroleum right holder from this transfer or sale shall be considered as having been obtained in Turkey from sources other than petroleum operations

D) In the case of transfer of material, imported by foreign petroleum right holders
under Article 116 of the Regulations and included in the capital assets for which value assessment decision has been issued, the value of the transferred material subjected to value assessment decision shall be deducted from the imported capital assets of the transferor company.

Exportation of the Materials Imported Duty-Free

Article 129 – Materials imported duty-free by the petroleum right holder may be exported free of all export taxes and duties upon conveyance by the General Directorate of the relevant transfer declaration and the detailed list attached thereto, to the concerned customs office.

To be able to export the materials imported by the contractor of the petroleum right holder, in his name and to his account the contractor shall apply to the General Directorate with a list, giving also the date and the number of the import declaration relating to these materials. Upon approval of this list by the General Directorate and its forwarding to the customs house concerned, the said materials shall be exported.

In the case of exportation of a material imported by the foreign petroleum right holders under Article 116 of the Regulations and included in the capital assets for which value assessment decision has been issued, the value of the exported material subjected to value assessment decision shall be deducted from the imported assets.

 

Value Assessment Decisions

Article 130 – The principles of the value assessment decisions pertaining to the capital imported and subjected to value assessment decisions and to the materials transferred or exported shall be designated jointly by the General Directorate and the Deputy Ministry.

PART EIGHT

Final Provisions

Rescinded Regulations, Reserved Rights, Execution and Effective Date

Rescinded Provisions

Article 131 – The Petroleum Registrations put into effect by the Decree Number 4/5633 dated 28/071955 of the Council of Ministers and the addenda and amendments thereof have been rescinded.

Provisional Article 1 – The applications filed and the rights acquired by the petroleum right holders prior to the effective date of these Regulations are reserved.

Effective Data

Article 132 – The provisions of these Regulations, prepared in accordance with Article 14 of the Petroleum Law. No. 6326 dated 7 March 1954 and reviewed by the Council of State, shall go into effect on the date of publication in the Official Gazette.
 

Execution

Article 133 – The provisions of these Regulations shall be executed by the Council of Ministers.