Petroleum Law

First Part GENERAL PROVISIONS

Section 1

OWNERSHIP AND OBJECTIVE

 

Article 1. The petroleum resources of Turkey   are subject to the possession and disposal, and are under rule of the State.

Article 2. The objective of this law is to   enable the expedient, continuous and effective exploration, development and   appraisal of the petroleum resources of the Republic of Turkey in accordance   with the national interest. (xxx).

Section   2
DEFINITIONS

Article 3. The terms used in this law are   defined as follows :

  • “Petroleum” means (a) all        natural hydrocarbons, liquid or gaseous, produced or producible from the        ground, (b) all asphalt and other solid hydrocarbons suitable for        production with or dissolved in liquid petroleum or gas (x), and (c) all        hydrocarbon products derived from the substances mentioned in the        foregoing sub-subarticles;

  • “Petroleum Product” means any        finished or semi-finished hydrocarbon derived from petroleum by        condensation, chemical treatment, refining or other means and processes;

  • “Petroleum Field” means a piece        of the earth established as containing a petroleum accumulation in        quantities suitable for economic exploitation;

  • “Discovery” means the finding        of a petroleum field;

a) ”Geological Investigation” means   ground and serial topographical, geological, geophysical, geochemical, and   like surveys, investigation and tests, and drilling, in connection with the   search for petroleum;

b) “Exploratory Drilling” means the   drilling of test wells for the purpose of finding petroleum or ascertaining   the extent of a petroleum field;

c) “Exploration” means all operations   under Sub-subarticles (a) and (b);

  • “Development” means the        drilling and equipping of a petroleum field for the purpose of        determining its limits and producible petroleum reserves and of        producing petroleum from it ;

  • “Production” means the        production of petroleum from a petroleum field and the handling and        treatment of petroleum prouced and conveyance thereof to tankage, to a        pipeline, or to a rafinery located in or in the vicinity of the        petroleum field;

  • “Petroleum Operation” or        “Operation” means:

a) Exploration, discovery, development,   production, refining as well as storage, transportation and sale of petroleum   and petroleum products: (excluding the sale, storage and transportation   required for sale of petroleum products to consumers either directly in   retail or through distribution organizations). (xxx)

 

b) Construction, establishment, and   operation of power, water, housing, camp, and all other installations and   equipment necessary for any of the foregoing purposes;

 

c) Administrative activities   pertaining to the operations mentioned in Sub-subarticles (a) and (b). (x).

 

  • “Permit” means a geological        investigation permit granted under this Law;

  • a) “Licence” means a petroleum        licence granted under this law;

b) “Licence area” means the area   covered by a licence;

  • a) “Lease” means a petroleum lease        granted under this Law;

b) “Lease Area” means the area covered   by a lease;

  • “Surface Lease” means a lease        on land and such rights thereon as may legally be established for the        usufruct, and servitude thereof, in connection with a petroleum        operation;

  • “Certificate” means an        authorization granted under this Law to conduct a petroleum operation        other than exploration, discovery, development, or production;

  • “Certificate Area” means the        area neeeded for an operation authorized by a certificate;

  • “Permitee” means the holder of        a permit;

  • “Licensee” means the holder of        a license;

  • “Lessee” means the holder of a        lease;

  • “Petroleum right” means any of        the rights arising from a permit, licence, lease, or certificate;

  • “District” means a petroleum        district determined under this Law;

  • “Open Area” means an declared        under this Law to be open to exploration, to operations under a lease or        application therefor;

  • “Due Diligence” means the        diligence, skill, efficiency, prudence, and foresight in the conduct of        a petroleum operation that might be expected from aperson experienced in        an operation under the same conditions and circumstances;

  • “Waste” means an act or        omission in the conduct of a petroleum operation that causes loss,        contamination, deterioration, or misuse of petroleum, petroleum        products, reservoir energy, water, or other minerals that would not        normally occur if the operation were conducted with due diligence;

  • “Unsafe Act” means an act or        omission in the conduct of a petroleum operation that endangers or is        likely to endanger the life, limb, or health of a person lawfully in or        near the place where such act or omission occurs that would not normally        occur if the operation were conducted with the diligince; (xx).

  • “Field” means the territory of        Turkey including those under territorial waters and also the territories        outside the Turkish territorial waters which are either intermittently        or permanently submerged and which may be used by Turkey for petroleum        operation purposes under the international agreements and practises.        (xxx).

  • a)” Market Price” means the sale        price applied at the point of delivery in Turkey by the petroleum right        holder, in the absence of an accessible world market, or it means the        free compettitive price determined normally by the usual adjustments of        quality and specific gravity of crude within Turkey or in the nearest        accessible world market plus all the expenses incurred for the        transportation of the same quality of crude from world markets to the        point of delivery in Turkey and this price shall not include the        corporation Tax and its withholdings and the Income Tax which should be        withheld on behalf of the shareholders which he petroleum right holder        is under obligation to pay in Turkey; but it shall include all the        indirect taxes directly related to the petroleum as well as the Customs        taxes and Custom duties. (the free competative price as provided under        this Sub-Article shall not exceed the price actually provided by a        market which is suitable to satisfy continuously the        requirements).(xxx).

b) ”Wellhead price” means the market   price less all expenses including the direct and indirect taxes apart from   the income and corporation taxes and withholding taxes deductible on account   of the aforesaid taxes involved in bringing petroleum other than refined   products from the well head to the place of delivery. (xxx).

  • “Exploration Expenses” means        all expenditures for exploration except expenditures for installations        or materials having a physical life of more than one year as well as        those for general administrative activities. (xxx).

  • a) “Intangible drilling costs”        means all expenditures for labour, fuel, repairs and maintenance,        haulage, supply and materials which are for and incidental to drilling,        cleaning, deeping or completing wells or preparation therefor, except        expenditures for installations of materials with a physical life of        morethan one year which are not installed or used, or which have a        useful life or salvage value at the end of one year after being        installed or put in use. (xxx).

b) “Cost of drilling wells which are   unproductive for the national economy” means the expenses made for any   physical economic value used or required for the drilling of wells which are   unproductive of petroleum in economical quantities including the intangible   drilling costs but excluding the drilling equipments and the similar tools.   (xxx).

  • “Rental” means a fixed sum        proportional to the extent of the land and payable to the State for the        right to conduct an operation thereon;

  • “Royalty” means the State’s        share of petroleum produced;

  • a) “Property” means movable and        immovable possessions, industrial rights, negotiable values, and all        rights and interests in or pertaining thereto. (xxx).

b) “Capital asset base” means the   value computed in accordance with Tax Procedures Law of the holder of   petroleum right allocated by him for use in connection with his petroleum   operations in Turkey. (xxx).

c) “Capital assets” means the values   included within the economic operations specified under the evaluation   measures provided under the Tax Procedures Law as well as the exploration   expenses, intangible drilling costs and the expenses for drilling wells which   are unproductive for the national economy as the holder of petroleum right   has elected to charge to a capital account as an asset in line with the   aforesaid Law. (xxx).

  • “Material” means all goods,        including petroleum, either raw, in process, or finished, equipment,        instruments, tools, machinery, means of transport and all other means,        and the spare parts thereof. (xx).

  • “Individual area” means each        petroleum field included in a licence or lease; (x).
  • “Petroleum Unit” means158,984 litres       of liquid petroleum (one barrel of42 gallons) or500 cubic metres       of gaseous petroleum calculated at 15.50˚C. and at a pressure of 1.03        kgs. Per square centimetre; (x).

  • “Minister” means the Minister        of Energy and Natural Resources. (xxx).

  • “General Directorate of        Petroleum Affairs” means the organization for the administration of this        Law. (xxx).

  • “General Director” means the        Generl Director of the Petroleum Affairs. (xxx).

  • This sub-article has been        rescinded by Law No. 1702.

  • “Person” means a real person or        a person existing by a virtue of Law;

  • “Regulations” means the        petroleum regulations promulgated to set forth the mode of application        of this Law;

  • “State” means the State of the        Republic of Turkey.

  • “Petroleum in economical        quantities” means the recovery in 24 hours to be accepted and determined        as economical by the General Directorate of Petroleum Affairs by taking        into consideration the requirements of the national economy, the        protection of the petroleum resources, and the productivity of the        field. (xxxx).

  • “Needs of the country” means        the petroleum used by the Turkish Armed Forces and other public        enterprises and organizations, and real and juridical persons of Turkey        and refineries in Turkey for refining petroleum, and the entire quantity        of petroleum upplied to all kinds of land, sea and air transportation        means within Turkish borders and territorial waters. (xxxxx).

Section 3

STANDARDS FOR   EXERCISE OF DISCRETION

Article 4. The grant or rejection of an   application for a petroleum right shall take into consideration :

  1. The application’s furtherance        of the national interest and the objective of this Law;

  1. The applicant’s:

    • compliance with applicable         laws, regulation, and instructions;

    • previous activity indicating         his intent to operate in furtherance of the objective this Law;

    • previous experience in the         conduct of similar operations;

    • financial ability to conduct         the contemplated petroleum operation;

  1. in choosing among applications        equally eligible under the foregoing sub-articles, priority of        application.

Section 4
PROHIBITIONS AND   SPECIAL REQUIREMENTS

Article 5. a ) No petroleum operation may be   conducted except under a permit, licence, lease, or certificate granted under   this Law.

b) No right granted under any other   law to a deposit of asphalt or other solid hydrocarbons shall authorize the   holder thereof to conduct or interfere with apetroleum operation. (x)

Article 6. The right bto acquire permits,   licences and leases in connection with petroleum is held by Türkiye   Petrolleri Anonim Ortaklığı on behalf of the State.

The said incorporation may   exercise this right on its own initiative or through the intermediary of the   specialized organizations it predominates in terms of capital and   administration or it may transfer the right to such organizations under the   provisions of this Law. However, the licences and leases so acquired shall   not surpass the limitation specified in the Law.

To the extent that is in   line with the purpose of establishment, public organizations and   incorporations, more than half of the capital of which is held directly by   the State, may be granted a certificate on behalf of the State by resolution   of the Council of Ministers.

To the extent that is in   line with the principlrs specified in this Law, stock companies or private   juridical persons which, according to the legislations of foreign states, are   in the capacity of stock companies, may be granted a permit, licence, lease   and, by resolution of the Council of Ministers, a certificate under the terms   specified in Article 60 of this Law. (xxxxxx) .

Article 7. Except with appropriate   authorization by the Minister, no petroleum operation may be conducted :

  1. within5 kilometersof        the frontiers of the State or within a restricted military zone;

  1. within60 metersof a        historic or religious site or installation, a structure not associated        with the petroleum operation, a water installation, a road, or public        thoroughfare

  1. within the municipal        development area of a city or town.

Article 8. No permit, licence, lease or   certificate shall entitle the holder to enter or be in place which he is   prohibited from entering or being in by any other law.

Article 9. 1. No permit, licence, lease or   certificate shall be granted unless the appplicant therefor has given a   reasonable guaranty fixed by the General Directorate of Petroleum Affairs,   for compensation for damage that may be caused by his operation and for sums   that may become payable by him under this Law.

2. The Minister may, on the   recommendation of the General Directorate of Petroleum Affairs, require the   holder of a petroleum right to alter or reasonably to increase the guarantee   given by him. If the holder fails the comply with such a requirement within a   reasonable time prescribed by the minister, he may be notified that unless he   complies within 90 days after such notice his permit, licence, lease or   certificate will expire.

Article 10. No holder of a petroleum right shall   commit or permit waste or an unsafe act in or in connection with his   petroleum operation.

Article 11. If a condition arises that threatens   a petroleum operation, the holder of the petroleum right whose operation is   so threatened shall forthwith notify the General Directorate of a Petroleum   Affairs and other holders of petroleum rights whose operations might be   adversely affected, giving the nature of the threat and the measures being   taken to overcome it.

Section 5

PROTECTION OF NATIONAL   INTEREST

 

Article 12. 1. No person existing by virtue of law   in which a foreign state holds a financial or beneficial interst of such   extent or in such form as directly or indirectly to influence his actions, and   no person acting for or on behalf of a foreign state may (a) hold a petroleum   right or conduct a petroleum operation, or (c) establish or operate   instatallations incidental or to forming part of a petroleum operation. (x) .

2. By a decision of the Council of   Ministers, an exception to this article may be provided. Such a decision may   not be appealed by those persons mentioned in (1) above, to the judical or   administrative courts. (xxx).

Article 13. 1. The petroleum right holders are   entitled to export, both in the form of crude and products, 35% of the entire   crude and natural gas which they have produced from onshore fields and 45%   from offshore fields discovered after1 st January 1980. The remaining part and the   entire crude and natural gas produced from fields discovered before1 st January 1980 and the   products obtained therfrom shall be allocated for the NEEDS OF THE COUNTRY.

MARKET PRICE shall be   applied to that part of the crude and natural gas produced by petroleum right   holders, which is allocate for the NEEDS OF THE COUNTRY. The council of   Ministers is authorized to establish the elements and the grounds of   implementation specified in Sub-Article 25 of Article 3 of this Law, which   the market price based on. The council of Ministers may, if required, assign   the right to the Minister.

The free competitive price   forming the basis of the market price which the petroleum right holder has   requested for its own petroleum shall be evaulated and approved by the   Minister according to these principles. This transaction shall be   repeatedwhenever the world free competitive prices are changed.

The council of Ministers is   authorized to establish the elements and grounds of implementation which   prices of petroleum products in Turkey is based on.

2. The Minister may require holders of   petroleum right to produce petroleum from their existing wells at a   sufficient rate. But no holder shall be required :

    • to produce from any well at         more than its maximum efficient rate of production, or,
    • to increase his production         beyond the proportio required from other petroleum producers.

By decision of the council   of Ministers, deviation from this rule may be made to extent necessary to   prevent waste or to meet the exigencies of national security or equity.   (xxxxxx).

Second Part
ADMINISTRATION
Section 1
REGULATIONS

Article 14. Regulations will be promulgated   setting forth the mode of application of this Law. The Regulations may also   prescribe the following :

  • The manner and time of filing        applications and appeals and submitting reports and documents tom        administrative authorities;
  • Where appropriate, bthe nature        of the contents of such documents;

  • Matters to be published in the        Official Gazette and the time within which and the procedures by which        such publication shall be done;
  • What shall be recorded in the        Petroleum Register and how such recordation shall be done, corrected,        amended, or cancelled;
  • Other matters relating to        application, appeals, recordations and publication.

Article 15. Applications, appeals, reports and   documents that do not conform to the Regulations shall not be validf, but i,f   the inconformity, is due to minor and inadvertert errors the General   Directorate of Petroleum Affairs may permit the corrections thereof.

Article 16. This article has been rescinded by   Law No. 1702.

Section 2

ORGANIZATION
 

Article17. AGeneral Directorate   of Petroleum Affairs attached to the Ministry of Energy and Natural Resources   has been established which shall be a person existing by virtue by Law and   function under an annexed budget and charged with the administration of this   Law and other Laws or regulations governing the petroleum products. (xxx).

Article 18. The General   Directorate of Petroleum Affairs under the direction of a General Director is   composed of a Central Organization and Regional Directorates outside the   Central Organisation.

Central Organisation, under   the direction of the General Director will consist of Head Assistant and   Assistant to General Director, Chairman of Inspection Committee and   Inspectors, Technical Legal and Economical Advisors in sufficient numbers,   Chief Engineers and Engineers, Geologists, Geophysicists, Specialists,   Economists, Directors, Controllers and other employees.

Regional Directorates will   be attached to the central Organisation and will be established in   appropriate places upon the request of the General Director and the approval   of the Minister. Each Regional Directorate under the direction of a Director   will consist of Assistants and Technical and Administrative employees.

It is permissible to employ   personnel on contractual basis at the General Directorate of Petroleum   Affairs. However, the services which shall be performed on contractual basis   shall be fixed by the council of the Ministers upon the proposal of Ministry   of Energy and Natural Resources and after receiving the recommendation of the   State Personnel Department. (xxx).

Article 19.1. The Genaeral Director of Petroleum   Affairs shall upon the recommendation of the Minister be appointed by the   decision of Council of Ministers. (xxx).

2. The Vice-General Directors,   advisers, and directors shall be appointed by the Minister upon   recommendation of the General Director; the director of accounts and his   personnel shall be appointed by the Minister of Finance, all other personnel   shall be appointed by the General Director.

3. The Committee of Discipline of the   General Directorate of Petroleum Affairs will consist of the Vice-General   Directors, Heads of departments and the Legal Advisor, under the chairmanship   of the General Director. This Committee shall deal with the problems of   discipline concerning employees appointed by the General Directorate of   Petroleum Affairs. The problems of discipline of the employees appointed by   the Minister shall be handled by the committee of Discipline of the Ministry.   (x).

Article 20. The General Director, in accordance   with the provisions of this Law, has authority to grant all permits,   licences, leases, and certificates, and shall be responsible for all   notification, publication, and registry required by this Law, except that   decisions under Sub-article (1) of Article 4 shall be made by the Minister.

Article 21. This Article has been rescinded by   Law No. 1702.

Article 22. This Article has been rescinded by   Law No. 1702.

Article 23. 1. The revenueof the General   Directorate of Petroleum Affairs consists of the following :

    • Subsidies to be made rom the         state budget,
    • Rentals to be paid by the         petroleum right holders.

2. Revenue as mentioned in   (a) and (b) above, shall be indicated on schedule “B” of the General   Directorate of Petroleum Affairs attached to the Budget Law each year. (xxx).

Section 3

COORDINATION

Article 24. 1. Prior to taking a decision on an   application affecting also a matter within the authorization of another   agency, the Ministry shall obtain the consent of such agency, The agencies   concerned shall be under the obligation to study with priority and urgency   and conclude within two months such application made by the Ministry under   the provisions of this Article. Applications not concluded within this period   shall be regarded to have been consented to.(xxxxxx).

2. The representatives of   the Ministries concerned with the administration of this Law shall meet under   the chairmanship of the General Director at the dates to be fixed by the   Minister, for determining and establishing the measures to be taken to fulfil   the objective of Article 2 of the Law. (x).

3.Türkiye Petrolleri Anonim   Ortaklýðý as petroleum right holder shall upon the request of the Minister be   obliged to assits the General Directorate of Petroleum Affairs in the   investigations related to petroleum and in the control of petroleum   operations. (xxxx).

SECTION 4

RIGHT TO APPEALS AND   INVESTIGATION PROCEDURES

Article 25. An applicant or holder of a   petroleum right may appeal to the Minister under this Law within twenty days   following the date of notification of the decision taken by the General   Directorate of Petroleum Affairs affecting his rights arising from an   application, permit, licence, lease or certificate. (xxxxxx).

Article 26. The General Directorate of   Petroleum Affairs shall attempt by negotiation and peaceful means to settle   conflicts on all rights to be acquired or already acquired under this Law   among applicants for or holders of said rights. The subject shall be   refererred to the Minister if such attempts fail to settle the conflict.   (xxx)

Article 27.1. The Minister and the General   Director in discharging their duties under this Law, may make all necessary   investigations, take and record evidences, and study all transactions,   accounts and records and inspect the petroleum operations and installations   of the petroleum firms involved in the investigation. (xxx).

2. The procedure to be followed in   investigations shall be prescribed in the Regulations.

3. The Minister or the General   Director may, if he dems proper, conduct investigations in public.

4. This Sub-article has been rescinded   by Law No. 1702.

Article 28. This Article has been rescinden by   Law No.1702.

Article 29. This Article has been rescinden by   Law No.1702.

Article 30. The Minister shall reach a decision   within a maximum period of twenty days on conflicts referred to him through   an objection and the Minister’s decision shall be notified to the parties   concerned within a maximum period of ten days. (xxxxxx)

Article 31. The period within which to object   or bring a lawsuit before the Council of the State shall resolve such cases   with priority and urgency.(xxxxxx)

Article 32. 1. It is an obligatory to publish in   the Official Gazette within fifteen days the final decision of the General   Directorate of Petroleum Affairs concerning a petroleum right. All kinds of   obligations shall commence upon such publishing. (xxxxxx) .

2. If an appeal to the   Council of State from a decision of the Minister is accompanied by a request   of the holder of the petroleum right to suspend the execution of the decision   pending the Council’s decision, the Council of State shall approve or reject   the request within a week.

3. The General Directorate   of Petroleum Affairs shall grant to the holder of a petroleum right adversely   affected by a final decision a reasonable time within which to comply therewith   if compliance with the decision requires such time.

Section 5

WAIVERS AND EXTENSIONS OF   REQUIREMENTS

Article 33.   Upon application by the holder of a petroleum right, the General Directorate   may extend for 6 months the performance of a petroleum operation required to   be performed under the Law or under his permit, licence, lease or certificate   in the event that fair and reasonable grounds occur. Should reasons for   extension dissappear or if it is understood that they partly or in whole are   no more valid the Directorate General may shorten or repeal the extension

granted. Such extensions   shall not exceed the total term of the licence, lease or certificate beyond   the maximum term therefore fixed under this Law. (xxx).

Section 6

REGISTRATION AND   PUBLICATION

Article 34. 1. The General Directorate of   Petroleum Affairs shall keep a Petroleum Register. This register shall be   open to the public.

2. In the Petroleum Register shall be   recorded, in accordance with the Regulations :

    • All applications for licences,         leases and certificates which are in accordance with this Law.
    • Licences, leases and         certificates and modifications thereof; the termination thereof and of         permits by any means.
    • Rights established on         licences, leases and certificates and on the petroleum rights arising         therefrom.(xx).
    • Transfers of licences, leases         and certificates and the petroleum rights arising therefrom or the         rights thereon and every type of charges thereon. (xx).
    • Such other matters as the         Regulations may prescribe for entry in the Petroleum Register.

  • Amended by Law No. 6987.
  • Amended by Law No. 1702.

3. The provisions of other   laws relating to a Register and to registration shall not apply to such   transactions as must be registered in the Petroleum Register in conformity   with this article.

Article 35. The General   Directorate of Petroleum Affairs shall promptly deal with an application for   recognition and recording of matters described in Sub-sub-articles (c) and   (d) of Subarticle (2) of Article 34. If the application is for the purpose of   furthering more rapid or effective conduct of petroleum operations or of   assuring adequate or additional financing by the holder of a petroleum right,   the General Directorate of Petroleum Affairs shall give a decision within a   period of 60 days commencing with the date of the application.

Article 36. 1. Licences,   laeses and certificates, and petroleum rights arising therefrom, and any one   of those petroleum rights which are related to any portion of a licence or   lease area, when registered in the Petroleum Register, may be subject of a   sale, mortgage, and such other aggrements relevant to immovables, subject to   the conditions provided by this Law.

2. a) The owner of a right, which is   duly registered and entails the use of a petroleum right, shall in proportion   to the etent of his right enjoy the rights and be subject to the obligations   of the holder of the petroleum right.

b) The holders of an   interest in a licence or lease or certificate or in any of the petroleum   rights granted by this Law and be subject to the obligation thereof. (xx).

3. Except for seizures and   precautionary measures, no right or restriction referred to in   Sub-sub-articles (c) and (d) of Sub-article (2) of Article 34 shall be valid   for the General Directorate of Petroleum Affairs or for the third parties   unless and until recognized and registered in the Petroleum Register by the   General Directorate of Petroleum Affairs.

(xx) Amended by Law No.   6987.

4. There shall be prescribed   in the Regulation :

    • The Petroleum Rights to which         the provisions of Sub-articles (1) and (2) shall be applied;
    • The provisions concerning the         representative who shall represent the right holders mentioned in         Sub-Article (2) and the consequences, as they affect the other right         holders or interest holders to observe this obligations and         liabilities. (xxxx).

Article 37.1. Arefinery or pipeline   cannot be the subject of any transaction apart from a certificate.

2. Refineries and pipelines   shall be registered in the Petroleum Register and in the Tittle Deed   Register. A Title Deed Registry official shall register a refinery or   pipeline in the Tittle Deed register upon application of the owner or the   General Directorate of Petroleum Affairs accompanied by the appropriate   documents. The Tittle Deed register will additionally indicate that no   transaction can be registered without the permission of the General   Directorate of Petroleum Affairs.

3. No fee well be charged   for registering a refinery or a pipeline to the Petroleum register that has   been registered to the Tittle Deed Register.

Article 38. 1. The General   Directorate of Petroleum Affairs shall publish in the Official Gazette

  • all Regulations and amendments        thereto,
  • the determination and modification        of petroleum districts,
  • the declaration modification        and closing of open areas,
  • This Sub-sub-article has been        rescinded by Law No. 1702.
  • appointment of the General        Director,
  • This Sub-sub-article has been        rescinded by Law No. 1702.
  • Decisions affecting        applications except those relating to permits. (xxx).
  • The expiration of a permit and        the granting, modification, or expiration of a licence, lease or        certificate or any right therein or change thereon.
  • This Sub-sub-article has been        descinded by Law No.1702.
  • Any other matter that this Law        or the Regulations require to be published.

2. Publication in the   Official Gazette shall constitute public notice of the matters covered   thereby, but shall not take the place of any special notice required by this   Law or the Regulations.

3. The dater of publication   of any matter published in the Official Gazette, unless otherwise specified   therein, shall be deemed to be the effective date of that matter. The   commencement, extension, or termination of licences or leases shall be   effective on the date of publication of the decisions effecting them, unless   special notice has been served.

Section 7
PERSONAL REGISTRATION AND   SERVICE

Article 39. 1. Every   applicant for a right under this Law shall give his address in Turkey, and no   permit, licence, lease or certificate shall be granted to a person who has   not done so.

2. Every permitte, licence,   lessee or certificate holder shall notify the General Directorate Of   Petroleum Affairs of :

  • the name and legal residence of        his resident agent in Turkey within 30 days of the receipt of a permit,        licence, lease, or certificate :
  • a change of legal residence or        agent within 30 days of such change.

3. Matters of which   notification is given under Sub-article (2) shall be registered in the   Petroleum Register.

4. a) A societe anonyme and a company   having a foreign nationality, whether or not its capital is divided into   shares, that is the holder of a petroleum right under this Law shall be   subject to Articles 1,3,4,5,6,7,10,11 and 13, and to Article 12 insofar as it   relates to Articles 1 and 4, of the prosional law of November 30,1914   relating to foreign joint stock companies having their capitals divided into   shares and foreign insurance companies.

  • Copies of certified documents        required under Article 1 of said provisional law shall be filed with the        Ministry of Economy and Commerce through the General Directorate of        Petroleum Affairs within 6 months after the petroleum rights of the        holder become effective.

5. The agent under   Sub-sub-article a) of Sub-article 2) and under Sub-article 4) shall be the   same person.

Article 40.1. Anotice served under   Article 39 upon an agent at an address registered in the Petroleum Register   shall be considered to have been duly served on the holder of the petroleum   right.

2. Incase any change in the address is   not advised promptly, or in case the new address had not been established by   the officer serving the notice, one copy of the document to be served shall   be posted on the door of the building at the previous address and another   copy in a part of The General Directorate of Petroleum Affairs’ office   accesible to the public, and the notice shall thus be considered to have been   duly served on the date of affixing thereof on the door of the previous   address.

So long as a new address is   not advised any further notice shall be served by posting it on the bulletin   board placed in a part of The General Directorate’s office, accesible to the   public.

3. If no address or resident   has been shown, any document shall be considered to have been duly served if   it has been posted for 96 hours in a part of The General Directorate’s office   accesible to the public.

4. Except the circumstances   mentioned above, the provisions of Law on Notifications shall apply to all   kinds of notices to be served by the The General Directorate under this Law.   (xxx).

Section 8

RECORDS, REPORTS AND   INSPECTION

Article 41. Every holder of   a petroleum right shall (1) maintain records and accounts as prescribed by   the Regulations, (2) keep samples in such circumstances and in such form as   may be prescribe with information, including samples, as to the nature,   extent and results of his operation.

Article 42. 1. Any person   engaged in the administration of this Law or his agent is authorized to   inspect any petroleum operation, and all data obtained and samples taken in   the course thereof, and all documents and accounting records with respect   thereto, and such person may copy any record, account, report, or other   document, and may take data anda samples and make reasonable examinations and   tests without hindering the normal course of petroleum operations. (xxx).

2. Every holder of a   petroleum right shall assist such person in the exercise of his powers under   Sub-article (1).

Article 43. 1. Secret   information relating to petroleum operations secured by authorities concerned   by reason of their functions in accordance with the provisions of this Law,   as well as financial, technical and operational secret information pertaining   to petroleum operations may not be divulged without the consent of the holder   throughoutb the duration of the petroleum right.

All kinds of technical,   commercial and financial information relating to the experience which the   holder of a petroleum right may have gained at any stage of petroleum   operations and to the established which are known only to him and to those   working with him but unknown to the public or, most probably, to a great   majority of other persons engaged in the petroleum industry, shall constitute   secret information. Special provisions of Tax Procedure Law are preserved.

2. Technical, financial and   geological information of a general nature, as well as well locations,   drilling logs, casing records and general production and sales figures are   not considered secret information. (xxx).

Section 9

DISTRICTS AND OPEN AREAS

Article 45. 1. For the   purposes of this Law Turkey may be divided by decision of the Council of   Ministers into several districts. Such districts may be modified and   redetermined. A district may not comprisev less than3.000.000 hectares.

2. By decision of the   Council of Ministers the whole or any part of a District may be declared open   to licence or lease, or an open area may be modified or may be closed in   whole or in part.

Closing a District to   licence or lease in whole or in part shall not hinder the granting of licence   or lease in that District outside the territorial waters but forming an   extension of said District.

The legal regime of   granting licences or leases in the seas beyond the territorial waters, and   the terms and conditions relevant to the tenure and obligations of such   licences and leases shall be determined by the Council of Ministers. (xxx).

3. No decision under the   foregoing sub-articles shall adversely affect acquired rights.

4. By permission of the   Council of Ministers Türkiye Petrolleri Anonim Ortaklığı may carry out   petroleum operations in Closed Districts as well. Before permission may be   granted for exploration in Military Restricted Zones the permission of the   General Staff must be obtained. (xxxx).

Third Part
EXPLORATION AND PRODUCTION

Article 46. 1. The General Directorate of Petrolem   Affairs, if it considers an application for geogolical investigation to be,   in confomity with this Law, may grant bthe required non-exclusive permit for   a specified period covering all or part of the land described in the   application.

2. The General Directorate of   Petroleum Affairs may refuse an application for a permit, or may grant it for   a specified period and subject to such limitations and conditions as it may   determine.

3. The General Directorate of   Petroleum Affairs is obliged to reach a decision on an application for a   permit, within sixty days following the date of application. (xxxxxx).

Article 47. 1. A permittee shall not, without the consent of   another petroleum right holder who is carrying out petroleum operations enter   to drilling sites or to places where geophysical work is being carried out,   shall not engage in an activity that interferes with the operation of another   petroleum right holder.

2. A permittee may, within the   limitations and conditions of his permit and of Sub-article (1), carry on any   geological investigation in the area covered by the permit.

Article 48. When a permittee has terminated his   operartions in a particular place, he shall, unless the General Directorate   of Petroleum Affairs otherwise directs, as far and as speedliy as possible   restore the land and everything thereon to the condition prevailing prior to   the commmencement of suchg operations; if he fails so to do, the General   Directorate of Petroleum Affairs may do so at the expense of the permittee.

Article49. Apermittee is liable   to a person who is the owner or the possesser of the land on which permittee   work is being carried out for any damage to the land and forloss caused by   the prevention of such person’s reasonable profit.

Section 2

LICENCES

Article 50. Subject to the   provisions of this Law, a licence confers on its holder the following rights   in the licence area :

1. to do geological   investigation;

2. to do geological   investigation for the purpose of determining his own petroleum prospects, as   though a permittee, outside the licence area; (x)

3. to conduct exploratory   or development drilling and to produce petroleum fro the area, exclusive of   others;

4. to apply for a lease   after having made a discovery (xxxx).

Provided, however, that   restrictions and conditions relating to operations and compatible with the   objective of this Law may be included inthe licence to be granted. (xxxx).

Article 51.1. aperson existing by   virtue of law who desires to obtain a licence shall file an application   therefor with the provisions of the Regulations. A receipt showing paymentb   of the licence fee shall be attached to the application.

2. If an application for a   licence is made by a permittee it shall be granted or rejected according to   whether it complies withn this Law and the Regulations.

3. If an application for a   licence is made by one who is not a permittee it may be refused, eventhough   it complies with this Law and the Regulations.

4. This Sub-article has   been rescinded by Law No. 1702.

Article 52. 1. The contents   of licence applications for field which is open for petroleum exploration   shall be kept confidential for four work days following the date of   application.

a) In the event another or   more than one application is made within this period for the same plot of   land either partly or wholely, these applications shall be considered to have   been made on the same day and shall be evaulated by the General Directorate   in the scope of Articles 4 and 51 of this Law.

b) In the event no other   licence application is made, within four work days following the first   application for the same plot of land either partly or wholely, the request   shall be resolved by the General Directorate, taking into consideration the   provisions specified in Articles 4 and 51.

c) Licence applications   made after four work days following the date of the first application, for a   plot of land either partly or wholely, shall not be subject to evaluation.

2. The above provisions   shall be applicable also to applications to be lodged foe a rejected licence   application area or relinguished licence area, which are made after the   rejection or relinguishment has been finalized and published in the Official   Gazette.

3. Applications made in   compliance with the procedures shall be finalized by the General Directorate   and submitted to the Minister at the latest within three months. The Minister   shall execute his discretion as per Sub-article 1 of Article 4 and Article 20   of this Law and shall reach a final decision accordingly at the latest within   20 days. (xxxxxx).

Article 53. 1.    A licence area may not exceed50.000 hectares.

2. A person existing by virtue of law   may, at the same time, hold at most 8 licences in one district. However,   Türkiye Petrolleri Anonim Ortaklýðý may acquire up to 12 licences in each   district provided that the total number of licences does not exceed ten times   the number of Petroleum Districts. (xxxxxx).

3. No person existing by virtue of law   is not agreement with another person existing by virtue of law to avoid   directly or indirectly the limitations described in Sub-articles (1) and (2).

4. The same person existing   by virtue of law is not entitled to make a re-application within a period of   one year for an area covered under an expired or relinguished licence.   (xxxxxx).

Article54. Alicence area shall be   bounded by north-south and east-west straight lines. The ratio of length to   width these areas, their contiguity to other areas, and their compactness   shall conform to the provisions of the Regulations.

Article 55. 1. The term of   a licence is four years. (xxxxxx).

2. Provided a licence   continues exploration with due diligence and in compliance with the Law, in   any one of the licences in a district, the term of his licences in that   district may be extended for a period not exceeding two years depending on   the requirements.

However, in case the   licencee’s operations at the end of the second year are in a state which may   possibly give rise to a discovery, the Council of Ministers may further   extend the period for up to two years, against guaranty, provided that an   application to that effect is made with an appropriate programme. The kind   and amount of the guaranty shall be established by the Council of Ministers.   In the event of failure to comply with the terms specified in the programme,   the guaranty shall be retained by the Treasury as a revenue.

3. Extensions under this   article, except under the provisions of Sub-article 4 shall not result in an   extension of the term of a licence for more than eight years from its   original effective date. (xxxxxx).

4. When a licence makes a   discovery on his licence area, The General Directorate can extend the term of   his licence for a period, not exceeding 3 years, sufficient for the licencee   to define the petroleum field. (xxx).

5. Terms as indicated above   may be increased by 50 percent in the case of offshore explorations. (xxxx).

Article56. Alicencee shall bear   the obligation to pay Rental for each licence area, The Rental payable yearly   per hectare of the licence area is :

For1 st, 2 nd, and 3 rd years   TL 40, For 4 th, and 5 th years TL 80

Each year after 5 th year   TL 120

The Council of Ministers is   entitled to increase these amounts up to ten times.

Geological and drilling   expenditures actually incurred by the licencee in any year shall be   subtracted from the total rental he is required to pay for that year.   However, the amount so subtracted shall not exceed fifty percent of the total   rental.

In offshore exploration,   rentals as above may be decreased fifty percent by the Ministry depending on   the water depths and working conditions. (xxxxxx).

Article 57. The licencee   shall commence exploration on his licence or geological investigation outside   of the same bearing on the petroleum prospects thereof within one year of the   effective date of his licence and continue exploration with due diligence so   long as the licence is in effect.(x).

Article 58.1. Alicencee is obliged to   commence explaory drilling on any one of his licences in a District at the   latest within three years commending from the date of his oldest licence in   that District. This period may be futher extended, against guaranty, for a   maximum period of one year, by the Council of Ministers which shall establish   the kind and amount of the guaranty.

In the event the licencee   fails to fulfil his obligation the guaranty shall be retained by the Treasury   as a revenue. (xxxxxx).

2. Within 1 year after a   licencee has made a discovery on one of his licences he shall commence   exploratory drilling on another licence area in the same district, and within   3 years of such discovery he shall commence exploratory drilling on the rest   of his licences in that district. (xxx).

  1. A licencee who has commended        exploratory drillings under any of the provisions of the foregoing        sub-articles shall continue such drilling with due diligence, with not        more than 6 months between the completion of one well and the starting        of another.

Article 59. Following a   discovery on a licence area, the licencee shall, unless there be justifiable   cause to the contrary, define and develop the petroleum field and produce   petroleum found thereon as if he were a lessee. As to such petroleum   operations and the petroleum so produced the licencee shall be subject to all   the obligations of lessee.

Section 3

LEASES

Article 60. Subject to the   provisions of this Law, a lease confers on the lessee the right to explore   for, develop, produce petroleum and to transport the petrolum he has produced   in the area concerned and sell it in every phase so long as his right is in   force.

Upon application, the   lessee may, by the decision of the Council of Ministers, be granted   certificate either individually or with other lessees, provided that the   reserve and production conditions of the fields are favourable and   economically accepable and that the application complies with economical   requirements, the object of this Law and with provisions concerning he   certificate. (xxxxxx).

Article 61.1. Alease area shall at   most be25.000    hectares.

2. Aperson existing by virtue of law   may hold lease areas totalling not more than150.000 hectares  an one district at once.

  • Amended by Law No. 1702.

(xxxxxx) Amended by Law No.   2808.

3. No person existing by   virtue of law make an agreement with another person existing by virtue of law   to avoid directly the limitations described in Sub-articles (1) and (2).

  1. A lease may not be applied for        or granted except in the ways set forth in Articles 63 and 64.

Article62. Alease area shall be   bounded by north-south and east-west straight lines. The ratio of length to   width of these areas, their contiguity to other areas, and their compactness   shall conform to the provisions of the Regulations.

Article 63.1. Alicencee who has made a   discovery in his licence area, and who while his licence is in effect applies   for a lease in accordance with the Regulations, shall be granted a lease on terms   prevailing at the time the related licence was granted, for any area or areas   chosen by him from the licence , not exceeding one-half thereof, subject to   the limitations of Articles 61 and 62. The licencee shall attach to his   application a receipt showing payment of the lease fee. (x).

2. Upon the grant of the   lease the licence shall expire. However, in the event the right holder   re-applies for licence for the remaining part of the licence area, such   application may be evaluated by the General Directorate outside the scope of   Sub-article 4 OF Article 53 of the Law. (xxxxxx).

3. The principles and   methods to be complied with in determining and delimiting lease areas, aech   not exceeding one half of the licence area, shall be prescribed by the Regulations.

  1. A licencee when applying for a        lease shall attach to his production from the lease area under        application. Directorate General may request modifictions in this        programme appropriate to the requirements of petroleum industry and the        needs of Turkey. (xxxx).

Article 64. 1. By decision   of the Council of Ministers, an area as to which no licence or lease is in   effect may be declared subject to lease by competitive bidding. All or part   of an area previously declared subject to lease by competitive bidding may be   declared no longer subject to such bidding.

2. No licence or lease may   be granted except by competitive bidding on an area previously declared   subject to lease by competitive bidding without revocation of such   declaration.

3. Competitive bidding   mentioned in Sub-article (1) shall be conducted by the General Directorate of   Petroleum Affairs in accordance with the Regulations.

4. An offer of an area for   competitive bidding shall not involve obligation to accept the highest or any   bid.

5. However, Directorate   General of Petroleum Affairs before declaring competitive bidding shall ask   Türkiye Petrolleri Anonim Ortaklýðý in writing by specifying a period whether   the latter requires this area subject to lease or not. In the event that Türkiye   Petrolleri Anonim Ortaklýðý requires, the area shall not be declared for   competitive bidding and be granted to Türkiye Petrolleri Anonim Ortaklýðý   subject to lease. (xxxx).

Article 65. 1. The term of   a lease shall be 20 years from is effective date. (xxx).

2. If a licence has been   extended for development under Sub-article 4 of Article 55 after a discovery   on the licence area, the time of such extension shall be credited as part of   the term of the lease.

3.Upon application by a   lessee who has commplied fully with his obligations, his lease may be renewed   twice by decision of the Council of Ministers for a total additional term not   exceeding 10 years each time if found in appropriate with the National   interest, technical and economical terms and so proposed by The General   Directorate. (xxx).

Article66. ALessee shall :

      • Within one year of the          effective date of his right, mark the boundaries of the lease area,          with an appropriate number of boundry markers and in the manner          prescribed by the Regulations.
      • In case of an alteration of          the lease area, wihin 4 months of the effective date of such          alteration, mark with an appropriate number of boundry markers the          changed boundries of the lease area as provided in Sub-article (1).
      • Maintain the boundry markers          of lease area.

Article 67. If his lease is   not already adequately developed lessee shall commence a development well   thereon within 6 months of the effective date of the lease, and therafter he   shall with due diligence, and to a greater extent than already done, define   and develop each petroleum field therin, produce petroleum therefrom, seek   markets for the petroleum so produced and market it.

Article 68. 1. If a lessee   has, by the end of the first year of his lease, not produced petroleum   therefrom in economical quantites, The General Directorate shall, by taking   also economic production conditions into account, grant a period of 90 days.   Should within this period the lessee still not have produced petroleum in   economical quntities, the lease shall lapse. (xxx).

2. If a lessee has produced   petroleum in economical quantities from his lease area and production has   thereafter ceased, the General Directorate may, after the expiration of the   first year of the lease, serve upon him a notice requiring production in   economical quantities to be resumed within a period of at least 90 days. If   in spite of the notice and due to non existence of force majeure the lessee   does not resume production in economical quantities, the lease shall expire   at the end of the stated period.

However, no notice shall be   given before the expiration of 3 months from the cessation of production, or   before the expiration of 1 year from the cessation of production if   exploratory or development drilling on the lease area are being carried out   with due diligence. (xxx).

Article 69. 1. The Lessees   are obliged to pay rental for each lease area. The rental payable yearly per   hectare of the lease area is :

For1 styear TL 225

For 2 nd year TL 300

For 3 rd year TL 375

For 4 th year TL 450

For 5 th year TL 600

For the 6 th year and

each year therafter TL 750

(xxx) Amended by Law No.   1702.

The Council of Ministers is   entitled to increase these amounts up to ten times. (xxxxxx).

2. The rental payable by a   licencee, who by reason of a discovery on his licence area is subject to the   obligations of a lessee shall not be greater than the rental payable by him   over half of his licence area as a licencee. (xxx).

Section 4

UNITIZATION OF OPERATIONS

Article 70. Lessees whose   leae areas are situated in whole or in part in the sae petroleum field, and   unitization of whose operations is likely to prevent waste, to increase   production and efficiency, or to lower production costs, may unitize their   operations with the approval of the General Directorate of Petroleum Affairs   if the lessees accept reasonable conditions that may be set forth by the   General Directorate of Petroleum Affairs. Such applications made by lessees   shall be acted on promptly.

Article 71. Subject to the   conditions set forth by the General Directorate of Petroleum Affairs, the   lessees who unitize their operations may resort to all necessary measures for   the efficient operation of the unitized petroleum field and may pay a single   royalty for the aggregate prodction. Lessees thus united shall pay rentals   for the unitized petroleum field on the basis of proportions which they shall   jointly determine and establish, in addition to the rentals normaly payable   for these areas remaining outside of unitization.

Article 72. This Article   has been rescinded by Law No. 2808.

Article 73. Except as to   conditions set forth by the General Directorate of Petroleum Affairs and   matters mentioned in the foregoing articles, unitization shall not involve   changing the areas held by the lessees or thir rights and obligations with   respect thereto.

Section 5

PROVISIONS COMMON TO   LICENCES AND LEASES

Article 74. The number of   licences or the total area thereunder held in the same district by a person   existing by virtue of law and other persons existing by virtue of law who   directly or indirectly hold more than 25% of the shares or are entitled to   the principal part of the profit or have the power of making administrative   decisions or of control or of naming directors of such person shall not   together be more than 8 licences and150.000 hectares  under lease.

Article 75. 1. If the   number or total area of licences or leases held by a person existing by   virtue of law exceeds the maximum fixed by this Law, the General Directorate   of Petroleum Affairs may require of him the surrender of the excess areas,   specifying a reasonable time for such surrender.

2. If the licencee or   lessee fails to comply with a notice under Sub-article (1), the General   Directorate of Petroleum Affairs may diminish the areas by reduction to the   maximum amounts.

Article76. Alicencee or lessee   may construct fuel lines or gathering lines leading to tankage on or in the   vicinity of his licence area or lease area.

Article77. Alicence or lessee   shall notify the General Directorate of Petroleum Affairs of any discovery   made by him. The time and manner of such notification shall be prescribed by   the Regulations.

Article 78.1. Alicencee or lessee   shall be liable for a royalty of one-eight of the petroleum produced and   stored from the licence or lease. However, petroleum shall not be subject to   the payment of royalty if used by him (a) in exploration, development or   productionin connection with the licence or lease, or (b) for injection into   the same or another resevoir stratum in the interest of more rapid, more   efficient, or greater ultimate production.

2. Royalty payable by a   petroleum producer may be paid either in cash or-as foreseen in Sub-article   (3) of this Article –in kind, and the amount of these payments shall be   calculated at the wellhead price. Quantities of petroleum required to be made   available by the holder of a petroleum right for the needs of the country   under Article 13 (1) shall be reduced by the quantities paid by him as   royalty or part thereof in kind.

3. a) In the first month of a payment   period the General Directorate of Petroleum Affairs may notify the producer   that in the next following payment period it wishes to receive the royalty or   part thereof in kind.

b) In such case the   producer shall deliver to the Government organization the specified petroleum   in tankage utilized by the producer for storage of his own petroleum.

c) Where facilities   therefor are available, the General Directorate of Petroleum Affairs may   require the producer to deliver all or part of the specified petroleum   elsewhere than to the producer’s tankage, but if such delivery is more costly   than delivery to the producer’s tankage the Government shall pay the producer   for the added cost.

4. Aproducer shall not be required, as   to royalty taken in kind, to store (a) gas under any circumstance or (b)   liquid petroleum for more than 30 days.

Article 79. 1. Following   the assessment of rentals and royalties upon the declaration by licencees and   lessees who are liable to pay therefor the General Directorate is authorized   to and in charge of assessing additional rentals and royalties in the event   differences are ascertained on the amount assessed, according to material   evidences and legal basis.

Any appeal against such   additional assessments to be filed with the Minister by the party concerned   shall defer the collection of the disputed portion of the amount assessed.

After the Minister’s   decision has been served on the parties involved, The General Directorate   shall, on basis of the Minister’s said decision, advise the party concerned   of the amount to be collected.

Such additonaly assessed   rentals and royalties shall be collected with a 100% increase.

2. Rentals and royalties   that are not assessed and notified within 5 years following the relevant   Calendar year for which the assessment should have been made, shall be time   barred.

3. Rentals and royalties   payable in cash shall be paid to the fiscal office of the area where The   General Directorate is located. The procedure, manner and time ffor the   declaration, determination, assessment and payment of rentals and royalties   as welö as matters related to te supplementary assessment shall be prescribed   in the Regulations.

Fourth Part

TRANSPORTATION, REFINING   AND OTHER OPERATIONS

Section 1

CERTIFICATES

Article80. Acertificate confers   upon its holder the right under the provisions of this Law to conduct only   the operations stated in the certificate, except operations which are   dependent upon the issuance of a permit, licence or lease.

The term of a certificate   is maximum 30 years. This term may be extended up to 10 years by the decision   of the Council of Ministers. (xxx).

Article 81. The General   Directorate of Petroleum Affairs shall grant the requested certificate, within   90 days from the receipt of an application for a certificate, and subject to   such conditions as it shall fix in accordance with the objective of this Law,   unless :

  1. it conflicts wiyh another        pending application;
  2. it conflicts with a certificate        previously granted and in effect at the date of application;

    • Amended by Law No. 1702.
  1. it is deemed by the General        Directorate of Petroleum Affairs to be inconsistent with the objective        of this Law. (x).

Article 82. 1. Two or more   applications, or an application and a certificate or a licence or a lease   shall be deemed to be in conflict and may either be dealt with under the   provisions of this Law for the settlement of conflicts, or if necessary   wiyhout resort to these provisions a decision may be issued on the basis of   the criteria that should be taken into consideration for granting or   rejecting a certificate application, if :

      • they involve the exclusive or          incompatible use of part or all o the same land,
      • the same service to be          provided meets the same need,
      • the routes of pipelines are          in conflict . (xxx).

2. An application by the   holder of a petroleum right resulting from the failure of the holder of a   pipeline certificate to assure the applicant adequate transportation for his   petroleum shall be deemed to be in conflict and shall likewise be dealt with   under the provisions of Sub-article (1).

Section 2

TRANSPORTATION BY PIPELINE   AND THROUGH OTHER MEANS

Article 83. 1. The legal   regime applicable to a petroleum operation the principal purpose of which is   the movement by pipeline through Turkey of petroleum produced or refined   abroad and destined to other countries without refining or other processing   within Turkey (except such purification or other treatment as is normally   incident to pipeline operations) shall be determined by the Council of   Ministers. (xxxxxx).

2. Atransporter who has constructed a   pipeline for the movement of his own petroleum, and does not need to operate   the pipeline to its full capacity therefor shall accept the petroleum tendered   for transportation by another holder of a petroleum right to the extent of   the capacity of the pipeline and in proportion to the quantities tendered by   other applicants for transportation if it conforms to the following   conditions :

(x) Amended by Law No.   6558.

(xxx) Amended by Law No.   1702.

(xxxxx) Added by Law No.   6987.

  • The petroleum tendered is        compatible in quality and other phycical characteristics with the        transporter’s petroleum;
  • The quantity tendered is a        reasonable minimum tender;
  • A fair and reasonable        transportation rate is offered for movement of the petroleum tendered;
  • The tenderer agrees to accept        such other limitation as the Regulations may prescribe.

Article 84.1. Atransporter of   petroleum by pipeline or other means, shall, before commencing   transportation, file with the General Directorate of Petroleum Affairs a   tariff fixing the rate and setting forth other conditions for transportation   in accordance with the provisions of the Regulations.

2. The General Directorate   of Petroleum Affairs shall approve or reject the tariff within 60 days of its   receipt.

3. Atariff may not be approved unless   the proposed rate is fair and reasonable to the shipper and to the   transporter of petroleum. The tariff shall provide the transporter, in   addition to the transportation expenses, including depreciation, interest and   amortization allowances, a reasonable profit on the values included in his   capital asset has required for the carrying out of the transportation   operations and the cash funds and rights thereto actually used in such   operations. (x).

4. Except in an emergency   or with the approval or at the direction of the General Directorate of   Petroleum Affairs no transportation of petroleum for others may be undertaken   until a tariff therefor has been approved.

Section 3

DUE DILIGENCE

Article 85. The holder of a   petroleum right who has a certificate necessary for his activities shall   conduct the operation with due diligence.

Fifth Part

OTHER OPERATING RIGHTS AND   DUTIES

Section 1

SURFACE AND WATER RIGHTS

Article 86.1 Apermit, licence, leae or   certificate does not by itself affect the rights of a person who is the owner   or has the right of enjoyment of the land to which it relates, or rights   relating to minerals other than petroleum contained therein, and other rights   that have been or may be established in such rights.

2. Aholder of a petroleum right shall   be liable for full compensation of any loss or damage to be caused to the   immovable or the installations thereon under his surface lease in connection   with his petroleum operations, as well as those regardless of whether or not   the losses involved have been caused because of any fault of his or whether   or not they could be foreseen beforehand.

Debts arising from these   damages shall be subject to time barring applicable to cases of “tort”.   (xxxx).

Article 87.1. Aholder of a petroleum   right is entitled to acquire a surface lease of such land in or in the   vicinity of his licence, lease or certificate area as required for his   operation, by agreement or by expropriation if the land is privately owned or   by recording it on his licence, lease or certificate if the land is not owned   by anybody.

(xxxx) Added by Law No.   1702.

Shoul the surface lease   acquired by agreement run for a period of more than 3 years, then the owner   of the privately owned land may also ask the holder of the petroleum right to   have the land in qustion expropriated.

However, provided no   provision to the contrary exists in other laws, the title to privately owned   land may also be acquired by the holder of a petroleum right through   agreement with the owner. (xxx).

2. a) A decision to expropriate shall   be made by the General Directorate on application therefor. Such a decision   being in effect a decision of public interest , subsequent transactions shall   take place in accordance with the Law of Expropriation. (xxx).

b) The expropriated land   shall be owned by the Treasury and a surface lease thereon by the holder of   apetroleum right, who shall have paid the cost of expropriation.

3. Asurface lease obtained under the   provisions of this article shall be a part of, and shall run as long as, the   licence, lease or certificate in connection with which it is issued.

Article 88. Subject to his   compliance with the provisions of other relevant laws and to his acquisition   of a surface lease thereon, a licencee, lessee, or certificate holder has the   right and authority on land in or in the vicinity of his licence, lease, or   certificate area :

  1. to search for water, by        drilling or otherwise, and to use the water found;
  2. to use other existing water, to        the extent needed in his operations, without adversely affecting the        rights of others in and to such water.

Article 89.1. Aholder a petroleum   right may surrender a licence on one month’s notice, other rights on three   months’ notice, to the General Directorate of Petroleum Affairs. In such a   case, the rights arising from the licence, lease or certificate shall expire   at the time stated in the notice. After the holder of a petroleum right has   discharged his obligations to that date, all his obligations shall be at the   end.

2. The holder of a   petroleum right may surrender part of his licence, lease or certificate area.   In such case, the foregoing provisions shall be applied in proportion to the   surrended area.

(xxx) Amended by Law No.   1702.

Article 90. Subject to the   limitations specified in this Law on number and extent of areas, The General   Directorate of Petroleum Affairs, on application therefor by the holder of a   petroleum right, may add to a licence or lease area.

Section 3

REMOVAL OF INSTALLATIONS

Article 91.1. Aholder of a petroleum   right whose surface lease on land has terminated, by surrenderor cancellation   of a permit, licence, lease or certificate, or by expiration or otherwise,   shall leave the land and everything thereon in such condition as the   Regulations prescribe.

  1. Otherwise the General        Directorate of Petroleum Affairs may at his expense restore the land to        such condition.

Article 92. Except as   provided in the subsequent articles hereof the holder of a petroleum right   may at any time remove any or all of his installations and supplementary   parts thereof and other movable property, regardless whether they are   considered to be the components of these installations or not, installed or   placed by him on the land within his licence, lease or certificate area or on   the land covered by his surface lease. (xxx).

Article 93. The ownership   of any property mentioned in Article 92 not removed by the holder of a   petroleum right from the land covered by a surface lease within 90 days after   the termination of such lease shall pass to enter the owner of the land.

(xxx) Amended by Law No.   1702.

Article 94. 1. The General   Directorate of Petroleum Affairs may purchase :

  • Buildings and other fixed        assets set up by the holder of a petroleum right on land covered by a        surface lease which has terminated.
  • The casing in any drilling or        water well drilled by the holder of a petroleum right, or tanks,        gathering line, fuel lines, or petroleum pipelines installed by such a        holder, which are not being used in place or wanted by the holder, which        are not being used in place or wanted by the holder for use in Turkey.

2. Installations and property   described in the foregoing sub-sub-articles may be removed by the holder of a   petroleum right if a notice has been given to the General Directorate of   Petroleum Affairs not less than 30 days in advance in order for it to notify   the holder whether it intends to purchase the installations or property and   if the General Directorate of Petroleum Affairs within the notice period has   not notified the holder of the petroleum right that it will purchase.

3. If the price of any   installation or property that the General Directorate of Petroleum Affairs   wants to purchase is not determined by agreement, it shall be determined by   the local court or first instance upon application.

Sixth Part

TAXATION

Section 1

TAX LIABILITY

Article 95.1. Apetroleum right holder   shall be subject to the provisions of all an every Law on taxes, dues and   fees and of the Tax Procedure Laws to be enforced in place thereof. Provided   that the total tax he is obliged to pay on his net profits and the income tax   which he is obliged to withhold on behalf of his share holders shall not   exceed 55%.

2. Two or more holders of   petroleum rights whose principal business activity is the conduct of   petroleum operations under this Law shall seperately be subject to taxation   even if a share holding participation existed between them.

3. Holders of petroleum   rights engaged in other activities, subject to general provisions, together   with petroleum operations mentioned in this Law, shall allocate a seperate   capital for their activities pertaining to their petroleum operations,   maintain seperate registers and accounts to differentiate their transactions   of this nature, and without pooling the final accounts of their petroleum   operations with those of their activities declare the former by means of   seperate declaration. Results arising from petroleum operations shall be   subject to tax independently. (xxx).

Article 96. The exceptions   provided under Sub-article 1 of Article 12 of Corporation Tax Law, do not   apply to profit and income derived from petroleum products .(xxx).

Article 97. 1. Apart from   those expenses permissible to be deducted from earnings of the tax payer in   order to determine the Corporate earnings under Article 14 of Corporation Tax   Law No. 5422, the holder of a petroleum right shall be allowed to make the   following deductions :

  • Any amount left following the        offsetting as provided for in Article 25 of this Law which amends        Article 56 of Petroleum Law the Rental and Royalty paid by Corporate        holder of a petroleum right,
  • The residual values of        unamortised economic values relinguished as a result of surrender of an        area by Corporate holder of petroleum right,
  • The non capialized exploration        expenses, the intangible drilling expenses, and the expenses for        drilling wells not productive in economical quantities by the corporate        holder of a petroleum right,
  • Depletion allowance.

2. The depletion allowance   represnts the total of capitalized exploration expenses, intangible drilling   costs and the expenses for drilling wells not productive in economical   quantities, depleted at rates to be jointly determined by the Ministry of   Finance and the General Directorate of Petroleum Affairs; for each area   individually in anology with Article 316 of Tax Procedure Law. However,   either the cost or the value of a part the area assigned to a purpose other   than petroleum production and the residual value representedto the petroleum   right holder at the end of the petroleum operation, shall be deducted from   the depletion allowance. (xxx).

Article 98. The economic   values of the petroleum right holding companies shall be evaluated as per   evaluation stipulations of Tax Procedures Law, and in the same time, the   exploration expenses, the intangible drilling costs and the expenses for   drilling wells not productive in economical quantities as defined and the   basis of which are set forth under this Law and capitalized by the corporate   holder shall be evaluated according to their book values.

These values shall not   exceed the exenditure actually made for these matters.

The capitalization of these   expenses is optional. The option right is to be exercised on the tax   declaration relevant to the initial period when expenses of such a category   have been made. (xxx).

Article 99. Excluding the   capitalized exploration expenses, the intangible drilling costs and expenses   for the drilling wells not productive in economical quantities, the petroleum   right holders expenditure covering the cost of economic value as well as the   cost for the acquisition of this value and for the erection of installations   thereon, shall be depreciated by way of amortization. Amortization rates   applicable on these shall be set up Ministry of Finance by taking into   account the reservoir conditions. (xxx).

Section 3

DEDUCTIONS

Article 100. This Article   has been rescinded by Law No. 1702.

Article 101. This Article   has been rescinded by Law No. 1702.

Article 102. This Article   has been rescinded by Law No. 1702.

Article 103. This Article   has been rescinded by Law No. 1702.

Article 104. This Article   has been rescinded by Law No. 1702.

Article 105. This Article   has been rescinded by Law No. 1702.

Article 106. This Article   has been rescinded by Law No. 1702.

Section 4

JOINT AND SEVERAL TAX   LIABILITY

Article 107. This Article   has been rescinded by Law No. 1702.

Article 108. This Article   has been rescinded by Law No. 1702.

Section 5

TAXES LEVIED ON INCOME

Article 109. This Article   has been rescinded by Law No. 1702.

Article 110. This Article   has been rescinded by Law No. 1702.

Section 6

TAX LIMITATION

Article 111. This Article   has been rescinded by Law No. 1702.

Seventh Part

IMPORTS AND EXPORTS

Article 112. 1. The holder   of a petroleum right itself, its agent or its contractor recognized by the   General Directorate can on its name import free of customs and other import   taxes and dues into Turkey, all the materials, fuels and land, sea and air   transport vehicles required for its petroleum operations in Turkey that are   considered to be necessary by the General Directorate, excluding the   materials related with the construction, erection and operation of its   buildings or installation and equipment and its administrative activities,   provided that said materials are used exclusively for its petroleum   operations. However, the Council of Ministers can decide and indicate which   of the materials shall be subject to customs and other import taxes and dues,   by issuing a detailed itemized list of articles produced or manufactured in   Turkey, the quality, the quantity and availability of which are comparable to   similar imported articles. This list may be amended in line with Turkey’s   development in industry. The list shall become effective as of the date of   their publication. However, materials the importation of which are requested   by application submitted to the General Directorate prior to the date the   lists have been published, shall enjoy duty exemption in case they are   imported within one year following the date of enforcement of the list,   provided that the necessity of their importation is approved by the General   Directorate.

The period for enjoying the   immunities and exemptions specified under this Sub-article shall be up to the   end of the calender year 2020. (xxxxxx).

2. The holder of a   petroleum right may, as long as its right is in effect, import at market   price free of customs and other import taxes and dues crude oil into Turkey   which can not be procured from local sources and which is necessary for its   petroleum operation.

The Council of Ministers is   authorized to establish the market price of imported crude by taking into   consideration the precedented free competitive prices. (xxx).

3. The exemption from   customs and other import taxes and dues provided for in the foregoing   paragraphs shall continue in case of the transfer of such materials by the   permission of the General Directorate from the holder of the petroleum right   to another petroleum right holder to be used in its petroleum operations.   (xxx)

4. With the exception of   petroleum products manufactured from petroleum imported pursuant to paragraph   (2) and materials trasferred to another holder of a petroleum right to be   used in petroleum operations, materials imported free of customs and other   import taxes and dues, when transferred for use or sale within Turkey either   directly or through any activity which is not considered a petroleum   operation, shall be subject to customs and other import taxes and dues, in   accordance with the provisions and conditions of the Customs Law, and Tariff   in force on the date of transfer. However, the materials which are found as   not useful for the petroleum operations may be exempted from the aforesaid   provision upon acceptance of the General Directorate’s proposal to this   effect by the Ministry of Finance and the Ministry of Customs and Monopolies.   (xxx).

Article 113. Except in case   of the purchase of material by the General Directorate of Petroleum Affairs   as provided in Article94, a  holder of a petroleum right may export the material that he has importd free   of export taxes and dues. (xx).

Article114. Aholder of a   petroleum right may report, free of all kins of export taxes and dues, the   petroleum and petroleum products obtained therefrom, for which he holds the   right to export in accordance with Sub-article 1 of Article 13. The export   prices of crude oil, natural gas and petroleum products exported shall be   established by the General Directorate of Petroleum Affairs, by taking into   account their prevailing free competitive prices. These prices shall be   effective upon Ministers approval. The General Directorate of Petroleum   Affairs, in its assessment, shall take as basis the relativity of natural gas   to crude oil export price in terms of equivalent caloric value and nearness   to the buyer’s market. (xxxxxx).

Section 2

TRANSFERS

Article 115.1. Aholder of a petroleum   right may, on application to the Ministry of Finance and the General   Directorate, transfer abroad, tax free, either in cash or in kind, excepting   the sum required for the payment of any taxes, dues, fees, rentals and   royalties owing but unpaid to the State;

  • His cash funds and rights        thereto, except the portion derived from sources within Turkey, other        than his petroleum operations, to the extent that such funds and rights        thereto exceed the value of his capital assets base as established        according to this Law and Tax Procedure Law,
  • The other values contained in        the capital asset base, except the portion derived from sources within        Turkey other than the holder’s petroleum operations.

However, capital imported   into Turkey in kind shall be re-exported in kind, if it is at such state that   can be re-exported in kind. The differences arising in favour, on account of   sale or transfer of economic values in Turkey shall be blocked. If the value   of the item is collected in abroad thhe amount representating the difference   shall be brought into Turkey in foreign exchange and credit to the blocked   account. The Ministry of Finance and the General Directorate of Petroleum   Affairs experts will be entitled to supervise, if necessary, those items   imported or re-exported from Turkey whether they conform with quality and   whether they are the original items under the permission in question.

2. By permission of the   Minister of Finance, the holder of a petroleum right may import from abroad   cash, sevices, materials, or other properties, for use in his petroleum   operations, by transferring abroad economical values derived from sources   within Turkey other than petroleum operations.

The cash, services,   materials or other properties secured in this manner, in return for the   economical values permitted to be transferred abroad, shall be considered as   have been obtained by the holder of a petroleum right from sources other than   his petroleum operations in Turkey.

3. Against their imported   registered capital the holders of petroleum right may at all times make   application for transfer. The transfer of net values transferrable in excess   of their imported capital can be applied for transfer only during the period   of submission of Corporation Tax Declaration and only after the submission of   each such declaration.

If a transfer application   is not made within the prescribed period it can be made during the period of   next Corporate Tax Declaration period. (xxx).

  1. a) The holder of a petroleum        right may retain abroad the foreign currency obtained from the petroleum        permitted to be exported in accordance with Sub-article 1 of Article 13        of this Law.
  • The foreign currency retained        abroad by the holdr of petroleum right :

    • Shall be offset against         remittances for recorded capital which the holder of petroleum right         has brought to Turkey, and the remittable net valuesexceeding the         imported capital.
    • May be used by the hplder of a         petroleum right in all kinds of payments in foreign currency required         for his own petroleum operations in Turkey in accordance with the         Petroleum Law. However, such payments shall not be regarded as capital         imported to Turkey.
    • The Turkish Lira equivalent of         the foreign currency retained abroad shall be regarded as cash fund in         the implementation of remittance provisions of this Law.

The principles specified in   Sub-article 3 of Article 116 of this Law concerning the rates of exchange   shall be implemented in offsetting foreign currency retained abroad against   both the imported capital and the remittable net values exceeding the   imported capital.

c) The holder of petroleum   right shall, following a reconciliation as at end June every year, deposit to   a special foreign currency account with the Central Bank of the Turkish   Republic, the balance of the amount of foreign currency remaining after the   offset and payment transactions specified in paragraph (b).

The holder of petroleum   right may request to use for purposes as specified in paragraph (b) and in   accordance with the principles stated therein the foreign currency   accumulated in this account.

  • These provisions shall also be        applicable to that portion corresponding to the foreign partner’s share        of the petroleum to be produced from the fields discovered during        explorations which Turkish stock companies carry out with foreign        partners under joint venture.
  • The amount of foreign currency        which Turkish stoc companies arec entitled to retain abroad in        accordance with the provisions of this Sub-article, and the relevant        principles shall be specified by the Council of Ministers. (xxxxx).

Article 116. 1. The value   of cash funds and rights thereto, and materials or other property forming a   part of the capital asset base imported into Turkey for use in petroleum operations   shall be established at the official rate of exchange of the Turkish   Currency, according to the kind of foreign currency utilized for each   importation, prevailing at the date importation.

The Ministry of Finance and   the General Directorate shall be jointly authorized to determine and   establish such value.

2. When application for   transfer abroad is made as property, including cash funds and rights thereto,   mentioned in Sub-article 115 (1), including previously imported material or   other assets forming a part of the capital asset base, certification of the   right to transfer, and the identity, if applicable of the material or other   assets forming a part of the capital asset base with imported items shall be   made by the General Directorate of Petroleum Affairs in colloboration with   the Ministry of Finance.

3. Inmaking such certification, the   Ministry of Finance and the General Directorate shall specify, in their   decisio as to the kind of foreign currency, the national identity of the   holder and of the value of properties to be transferred and other relevant   factors of this nature.

In the absence of evidence   to the contrary, the value of properties to be transferred, including cash   funds and other rights thereto, shall be transferred according to the   sequence of dates of importation into the country of the properties against   which they were secured.

The transfer of the cash   funds and other rights related thereto, values of which have ben established   pursuant to the above principles, and other properties forming a part of the   capital asset base, shall be effected at the official rate of exchange   prevailing on the date of importation.

Those falling outside the   scope of the above will be transferred at the rate of exchange prevailing at   the date of transfer. (xxx).

Article 117. 1. The   Ministry of Finance, upon examination jointly with the General Directorate of   Petroleum Affairs of applications for transfers in accordance with Article   115 (1) and, independently, of applications for transfers in accordance with   Sub-article (2) of the same article, shall issue the necessary permit, as   regards application’s compliance with Article 115 and shall allocate the   necessary foreign currency in accordance with the foregoing articles. (x).

2. This Sub-article has   been rescinded by Law No. 1702.

Article 118. Provided that   the provisions of this Law be preserved, the provisions of the Law on the   Protection of the Value of the Turkish Currency, supplements thereto and   amentments thereof, as well as the provisions of the decisions and notices   based there-upon, shall also apply to the holders of petroleum right. (xxx).

Eight Part

SPECIAL PROVISIONS

Section 1

PERSONNEL TRAINING

Article 119. The alien   executive and professional personnel and skilled labourers of a holder of a   petroleum right, who may be required for the execution of his petroleum   operations, may with the favorable view of the Ministry of Energy and Natural   Resources and the permission of the Ministry of the Interior, be employed in   Turkey, under exemption from the provisions of Law No. 2007 on Crafts and   Services Appropriated in Turkey for Turkish Citizes. (xxxxxx).

Article 120. 1. Leases and   certificate holders shall undertake at their own expense to provide education   and training in educational or professional institutions and in operations in   foreign countries, or to the extent approved by the General Directorate in   Turkey, in order that Turkish citizens (excluding civil servants) not less   than 25% of the alien personnel employed by them, may gain proficiency in all   phases of petroleum operations. (xxx).

2. The persons to be sent   and the places to which they are to be sent shall be determined by the holder   of the petroleum right together with the General Directorate of Petroleum   Affairs.

3. The persons thus being   educated and trained shall not be liable to the petroleum right holders, who   assume their expenses, as regards obligatory service or employment. (xxx).

Section 2

PUBLIC ECONOMIC   ENTERPRISE PETROLEUM OPERATIONS

Article 121. Petroleum right holder Türkiye   Petrollleri Anonim Ortaklýðý shall not be subject to the obligation provided   for in Article 56 of this Law. (xxxxxx).

Section 3
FORCE MAJEURE

Article 122. Acts of God, war, insurrections,   and other force majeure occurrences shall suspend the rights and obligations   of the holder of a petroleum right to the extent that they affect his   bpetroleum opeartions, and the time to which he is subject as equal to the   period of force majeure.

Ninth Part
PENALTIES

Article 123. 1. If an offense under this Law does   not legally entail a heavier penalty it shall be punished under the   provisions of this Part.

2. Application of the   provisions of this Part shall not exclude the application of the other   provisions of this Law to the holder of a petroleum right.

Article 124.1. Aperson who conducts   geological investigation without obtaining a permit is liable to a minor fine   of from 5000 to 10000 liras. (xxx).

2. Aperson who conducts petroleum   operations other than geological investigations without obtaining a licence,   lease or certificate is liable to major fine of from 5000 to 25000 liras or   to imprisonment for one month to six months or both such penalties. (xxx).

3. The provisions of this   article shall not apply to persons authorized to do geological work by   Turkish scientific and research institutions.

Article 125. 1. To persons   who commit waste or unsafe act as defined in this Law, an order shall be   given by the General Directorate to cease such waste or unsafe act within a   specified time. If such waste or unsafe act continues after the end of such   specified time, the offender shall be liable to a major fine of 5000 lira for   each day that it continues. (xxx).

2. If serious and   irreparable damage results from acts mentioned above, the offender shall be   liable to a major fine not less than 5000 lira for each day that the offence   continýes or to imprisinment from one to six months, or to both such   penalties. (xxx).

Article126. Aperson who wilfully   and without lwful excuse impedes or interferes with the exercise of a right   or the performance of a duty under this Law is liable to a minor fine or not   more than 500 lira or to light imprisonment for not more than one month or to   both suv-ch penalties.

Article127. Aperson who in an   application or proceeding under the provisions of this Law makes a material   statement that he knows to be false is liable to a major fine of from 500 to   2000 lira or to imprisonment for one month to 6 months or to both such   penalties.

Tenth Part

ADMINISTRATIVE REMEDIES

Article 128. Where it   appears to the General Directorate of Petroleum Affairs that waste or an   unsafe act is taking place in or in connection with a petroleum operation, it   shall direct the person committing such waste or unsafe act to cease so   doing, and to repair and rectify the damage that has resulted, within a   reasonable time. If such directive has not been complied with within the   specified time, the General Directorate of Petroleum Affairs shall have the damage   repaired and rectified at the cost of the petroleum right holder and take the   precautionary measures to stop waste or unsafe act.

Article 129. Where it   appears to the General Directorate of Petroleum Affairs that waste or an   unsafe act, either of which causes or is likely to cause serious and   irreparable damage, is taking place in or in connection with a petroleum   operation, it may seize wells and all installations and take all measures it   deems necessary to stop such damage, including the suspension of operations,   at the expense of the person committing such waste or unsafe act.

Article 130. Upon   conviction of a person in a competent court for making a material statement   that he knows to be false in an application or proceeding under the   provisions of this Law, the Minister may cancel any right granted by the   General Directorate of Petroleum Affairs to such person on the basis of such   statement.

Article 131. If the holder   of a petroleum right fails to perform any of his financial obligations to the   State, the provisions of the Law relating to Collection Procedures of Public   Claims shall be applied to him.

Article 132. 1. If the   holder of a petroleum right fails to comply with this Law, the Regulations   and with Decrees and orders given on the basis of such or with one of the   written conditions of his permit, licence, lease and certificate The General   Directorate of Petroleum Affairs shall request compliance within 90 days,   operations covered by his permit, licence or leaseor certificate or the direct   implementation of the cancellation sanction. If despite such warning the   failure continues after the 90 days period, the operations may be temporarily   suspended for a period of not less than 90 days not more than 180 days or the   General Directorate of Petroleum Affairs may suggest to the Minister for the   direct cancellation of the permit, licence, lease or the certificate. (xxx).

2. a) Resuming of the operations shall   be permitted during the temporary suspension period, if an acceptable   assurance to the effect that the failure will be removed is provided to the   General Directorate of Petroleum Affairs by the holder of a permit, licence,   lease of certificate.

b) In case acceptable   assurance is not provided and the failure is not removed or the failure is not   removed although an acceptable assurance has been provided, the holder of a   permit, licence, lease or certificate shall be given another 45 days of   grace. If the failure has not been removed at the end of this grace, the   permit, licence, lease or certificate may be cancelled.

3. Incase the holder of a licence,   lease, or a certificate does not comply with the provisions of Articles 13,   57, 58, 59, 67 and 85 of the Law, the cancellation sanction shall be directly   applied after granting the 90 day period, without resource to the temporary   suspension remedy. (xxx).

4. The decision for   cancellation shall be taken by the Minister upon the proposal of the General   Director and the decision for temporary suspension by the General Director.   (xxx).

5. If a decision for   cancellation has been taken, the rights arising from permit, licence, lease   or certificate shall be terminated on the date of cancellation.

6. If a decision for   temporary suspension has been taken none of the operations shall be performed   except for the operations related to the sale of petroleum, for the   prevention of an unsafe act or waste and for the removal of the incident   leading to the temporary suspension of operations. (xx).

Eleventh Part

FINAL PROVISIONS

Section 1

CURRENT PETROLEUM   OPERATIONS

 

Temporary Article. 1. A petroleum operation   being conducted on the effective date of this Law under a legal right   previously obtained may continue for 150 days after such date. Continuation   of such petroleum operation beyond such period is subject to the grant of   authority under this Law.

2. Inorder to be granted authority to   continue such an operation under this Law it is necessary (a) to make an   application therefor to the General Directorate of Petroleum Affairs within   90 days of the effective date of this Law, and (b) that the person conducting   the operation be not prohibited by the provisions of this Law from conducting   such operation.

Section 2
SCOPE, EFFECTIVE DATE, AND   EXECUTION

 

Article 133. 1. The Petroleum Law No. 792 of March   24, 1926, is hereby repealed.

2. The provisions of the   Mining Law No. 6309 and of Article 5 Law No. 2805are not applicable to   petroleum.

Article 134. The provisions of this Law relating   to organization, permits and certificates shall be effective on the date of   its publication, and the other provisions shall be effective on the date of   enforcement of the Regulations called for by Article 14.

Article 135. This Law shall be executed by the   Council of Ministers.

SUPPLEMENTARY ARTICLES   ADDED BY LAW NO. 1702 TO PETROLEUM LAW

Supplementary   Article 1. The   following terms, Council of Ministers, Minister, Ministry, Petroleum   Administration and President as used in Petroleum law No.6326 as amended by   Law No. 6558 and Law No.6987 have been amended as follows :

Council of Minister

Minister

Ministry

The General Directorate of   Petroleum Affairs

The General Director

and the caption of Part   Eight, Section 1 has been amended as “Personnel Training” and caption of   Section 2 of the same Part has been amended as “Petroleum Operations carried   out by Public Economic Enterprises”.

Supplementary   Article 2. The   provisions of Article 112 Sub-article 5 shall not applicable in the event of   transfer purpose of using or selling in Turkey, directly or through   operations not considered a petroleum operation, of a raw material, auxilary   chemicals, operational materials and petrochemicals manufactured by additives   imported into Turkey in accordance with Article 112 of the petrochemical   installations under a certificate.

Supplementary   Article 3.   Field comprising producible solid hydrocarbons such as asphaltite, bituminous   shales, which can be suitable for the production of petroleum products, may   upon th proposal of the Minister be included in the scope of Petroleum Law,   by the resolution of the Council of Ministers. (xxxxx).

TEMPORARY ARTICLES ADDED BY   LAW NO.1702 TO PETROLEUM LAW

Temporary Article   1. The tenure   of the licences granted prior to date of enforcement of this Law shall be   subject to the provisions which were in force on the date of their issue. The   same shall also apply in the case of transfer and assignment of licences in   part or in full.

Temporary Article   2. The tenure   recognized to a licencee, in accordance with article 55/4 of Petroleum Law,   who made a discovery in his licence area prior to the date of enforcement of   this Law, shall continue even if it exceeds at the time of the enforcement of   the present Law, the tenure of 3 years, stipulatedunder the present Law.

Temporary Article   3. The tenures   which became operative in accordance with Article 58 of the Law, prior to the   date of enforcement of the preset Law, shall be subject to the previous   provisions. If the remaining part of such terms, however, is longer than the   terms specified by the new law, the aforesaid tenures shall be considered to   have expired with the expiry of the new tenure as from the date of   enforcement of this Law.

Temporary Article   4. The tenure   of the leases granted prior to the date of enforcement of this Law shall be   subject to the provisions which were in force at the time of their issue. The   same shall also apply in the case of transfer and assignment of leases in   part or full. (xxxx)

Temporary Article   5. The losses   which have been carried forward for 5 years or more on the date of   enforcement of this Law can no longer be carried forward into succeeding   years. (xxxx).

Temporary Article   6. The tenures   which became operative in accordance with Article 68 of the Law, prior to the   date of enforcement of the present Law,shall be subject to the previous   provisions. If the remaining partof such tenures, however, is no longer than   the tenures specified by the new Law, aforesaid tenures shall be cosidered to   have expired with the expiry of the new tenure as from the date of   enforcement of this Law. (xxxx)

Temporary Article   7. The tenures   of the certificates granted prior to the date of enforcement of this Law   shall be subject to the provisions which were in force on the date of their   issue.

Temporary Article   8. Provisions   which amend or repeal the provisions of Part Six, under the heading   “Taxation”, of Petroleum Law No. 6326 as amended by Law No.’s 6558 and 6987   shall be effective as from the beginning of calendar year subsequent to the   date of enforcement of this Law. Old provisions regarding taxation shall   continue to be validuntil the beginning of next calender year following the   date of enactment of this Law. (xxxx)

Temporary Article   9. The   appointment of personnel of the General Directorate of Petroleum Affairs and   that of the Department of Fuels of the Ministry of Energy and Natural   Resources shall be made to the positions which in accordance with the State   Employee Act No. 657 shall be allocated to the General Directorate under the   terms of this Law, provided that all acquired rights of these personnel are   reserved. These transactions shall be completed wiyhin one month. (xxxx).

Temporary Article   10. Personnel   who are presently Head of Fuels Control Department and Controllers shall be   subject to proficiency examination, and those who succeed shall priorily be   appointed as Auditers to the Audit Board which is foreseento be formed at the   General Directorate of Petroleum Affairs.

TEMPORARY ARTICLES ADDED   BY LAW NO. 2803 TO PETROLEUM LAW

Temporary Article   1. The periods   for objections, investigation of objections and appeals to law courts, which   have commended prior to the date this Law is put into effect, shall be   subject to the provisions applicable before the publishing date of this Law.

Temporary Article   2. The number   of licences acquired by Türkiye Petrolleri Anonim Ortaklýðý in each District   on the date this Law has become effective shall be valid upup to the end of   periods specified in this Law.

Temporary Article   3. Applications   lodged by Türkiye Petrolleri Anonim Ortaklýðý, prior to the effective date of   this Law, for acquiring licences and re-acquiring licences, the legal terms   of which have expired, may be held subject to the provisions applicable   before the publishing date of this Law, provided the total number of licences   does not exceed ten times the number of petroleum districts.

(x) Amended by Law No.   6558.

(xx) Amended by Law No.   6987.

(xxx) Amended by Law No.   1702.

(xxxx) Added by Law No.   1702.

(xxxxx) Added by Law No.   2808.