Oil discovery

The Chimaera gas seep, near Antalya or Antioch as it was known in Biblical times, (SW Turkey), has continuously been active for millennia and it is known to be the source of the first Olympic fire in the Hellenistic period.

Chimaera represents the biggest emission of abiogenic methane on land discovered so far.

Deep and pressurized gas accumulations necessary to sustain the gas flow for millennia, likely charged by an active inorganic source, may be present.

The Chimaera gas seep, about 90 km south of Antalya, is near the town of Kemer.

Molecular and isotopic analyses shows methane (approximately 87%, light alkanes, hydrogen (7.5–11%), carbon dioxide (0.01–0.07%, helium ~80 ppmv and nitrogen (2–4.9%.

Some Data on Gas, oil - reference material - “I want to be an oilman…”

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The seep releases a mixture of organic thermogenic gas, related to mature type III kerogen occurring in Palaeozoic and Mesozoic organic-rich sedimentary rocks, and abiogenic gas.

Methane is not related to mantle or magma degassing. The abiogenic gas accounts for about half of the total gas released, which is estimated to be well beyond 50 ton year to the power of -1. Ophiolites and limestones are in contact along a tectonic dislocation leading to gas mixing and migration to the Earth’s surface.

Chimaera represents the biggest emission of abiogenic methane on land discovered so far. Deep and pressurized gas accumulations are necessary to sustain the Chimaera gas flow for thousands of years and are likely to have been charged by an active inorganic source.

Panhandle-Hugoton field (Anadarko Basin) in Texas-Oklahoma, USA is the most important gas field with commercial helium content.

Reservoir conditions are found in Lloydminster on the Alberta-Saskatchewan border, one of the largest Canadian oil reserves. “Processes of Heavy Oil and Tar sand Origin, and Novel strategies for Exploitation” (of these resources) is a new initiative within the Canadian Department of Geology and Geophysics, that will involve geochemists, geologists, hydrogeologists, geo-physicists, engineers and microbiologists.

Biodegraded oils dominate the world petroleum inventory, with the largest oil reserves being found, not in the Middle East, but as heavy oils and tar sands on the flanks of foreland basins in the Americas with Canada having a very large share of this vast resource.

Off the west coast of Africa, deepwater well-construction costs exceed $20 million per well, and minimum required production levels to make wells economically viable are now at 10,000 B/D [1590 m3/d].

Primary production is ordinarily the first stage of production. Secondary production involves moving the oil out in some way from the reservoir.


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Generally moving oil out relies entirely on natural energy sources. To remove petroleum from the pore space it occupies, the petroleum must be replaced by another fluid, such as water, natural gas, or air. Oil displacement is caused by the expansion of in situ fluids as pressure declines during primary reservoir depletion.

The natural forces involved in the displacement of oil during primary production are called reservoir drives. The most common reservoir drives for oil reservoirs are water drive, solution or dissolved gas drive, and gas cap drive. The most efficient drive mechanism is water drive. In this case, water displaces oil as oil flows to production wells.

An effective reservoir management strategy for a water drive reservoir is to balance oil withdrawal with the rate of water influx. Water drive recovery typically ranges from 35% to 75% of the original oil in place (OOIP).

In a solution gas drive, gas dissolved in the oil phase at reservoir temperature and pressure is liberated as pressure declines.

Some oil moves with the gas to the production wells as the gas expands and moves to the lower pressure zones in the reservoir. Recovery by solution gas drive ranges from 5% to 30% OOIP.

A gas cap is a large volume of gas at the top of a reservoir. When production wells are completed in the oil zone below the gas cap, the drop in pressure associated with pressure decline causes gas to move from the higher pressure gas cap down toward the producing wells.

The gas movement drives oil to the wells, and eventually large volumes of gas will be produced with the oil.

Gas cap drive recovery ranges from 20% to 40% OOIP, although recoveries as high as 60% can occur in steeply dipping reservoirs with enough permeability to allow oil to drain to downstructure production wells.


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Gravity drainage is the least common of the primary production mechanisms. In this case oil flows downstructure to a producing well. This is the result of a pressure gradient that favors downstructure oil flow to oil movement upstructure due to gravity segregation. Gravity drainage can be effective when it works. It is most likely to happen in shallow, highly permeable, steeply dipping reservoirs.

The behavior of the field depends on which mechanism is most important at various times during the life of the field. It is important to characterize the well and the field. Reservoir Flow Models are used to simulate production at start. Test wells are then drilled to compute and compare actual flow to the model.

In a very real sense, the reservoir model determines how much money will be available to pay for wells, compressors, pipelines, platforms, processing facilities, and any other items that are needed to implement the plan represented by the model.

For this reason, the modeling team may be expected to generate flow predictions using a combination of reservoir parameters that yield better recoveries than would be expected if a less "optimistic" set of parameters had been used.

The sensitivity analysis is a useful process for determining the likelihood that a set of parameters will be realized. Indeed, modern reserves classification systems are designed to present reserves estimates in terms of their probability of occurrence.


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Weird Science

Creation within the mantleRussian researchers concluded that hydrocarbon mixes would be created within the mantle. Experiments under high temperatures and pressures produced many hydrocarbons, including n-alkanes through C10H22, from iron oxide, calcium carbonate, and water. Because such materials are in the mantle and in subducted crust, there is no requirement that all hydrocarbons be produced from primordial deposits. Hydrogen is one element needed in a hydrocarbon. Carbon is the other.

Hydrogen generation within the earthHydrogen gas and water have been found more than 6 kilometers deep in the upper crust, including in the Siljan Ring boreholes and the Kola Superdeep Borehole.Data from the western United States suggests that aquifers from near the surface may extend to depths of 10 to 20 km.

Hydrogen gas can be created by water reacting with silicates, quartz and feldspar, in temperatures in the 25° to 270°C range. These minerals are common in crustal rocks such as granite. Hydrogen may react with dissolved carbon compounds in water to form methane and higher carbon compounds.

One reaction not involving silicates which can create hydrogen is:

Ferrous(iron) oxide + Water → Magnetite + hydrogen

The above reaction operates best at low pressures. At pressures greater than 5 GPa almost no hydrogen is created.

Serpentinite mechanismOne proposed mechanism by which abiogenic petroleum is formed was first proposed by the Ukrainian scientist, Prof. Emmanuil B. Chekaliuk in 1967. He proposed that petroleum could be formed at high temperatures and pressures from inorganic carbon in the form of carbon dioxide, hydrogen and/or methane.


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This mechanism is supported by several lines of evidence which are accepted by modern scientific literature. This involves synthesis of oil within the crust via catalysis by chemically reductive rocks. A proposed mechanism for the formation of inorganic hydrocarbons is via natural analogs of the Fischer-Tropsch process known as the serpentinite mechanism or the serpentinite process.

Serpentinites are ideal rocks to host this hydrocarbon creation process as they are formed from peridotites and dunites, rocks which contain greater than 80% olivine and usually a percentage of Fe-Ti spinel minerals.

Most olivines also contain high nickel concentrations (up to several percent) and may also contain chromite or chromium as a contaminant in olivine, providing the needed transition metals.

However, serpentinite synthesis and spinel cracking reactions require hydrothermal alteration of pristine peridotite-dunite, which is a finite process intrinsically related to metamorphism, and further, requires significant addition of water.

Serpentinite is unstable at mantle temperatures and is readily dehydrated to granulite, amphibolite, talc-schist and even eclogite. This suggests that methanogenesis in the presence of serpentinites is restricted in space and time to mid-ocean ridges and upper levels of subduction zones.

However, water has been found as deep as 12 km, so water-based reactions are dependent upon the local conditions.


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Oil being created by this process in intracratonic regions is limited by the materials and temperature.

Serpentinite synthesisA chemical basis for the abiotic petroleum process is the serpentinization of peridotite, beginning with methanogenesis via hydrolysis of olivine into serpentine in the presence of carbon dioxide. Olivine, composed of Forsterite and Fayalite metamorphoses into serpentine, magnetite and silica by the following reactions, with silica from fayalite decomposition (reaction 1a) feeding into the forsterite reaction (1b).

Reaction 1a:Fayalite + water → Magnetite + aqueous silica + Hydrogen

Trace metalsNickel (Ni), vanadium (V), lead (Pb), arsenic (As), cadmium (Cd), mercury (Hg) and others metals frequently occur in oils.

Some heavy crude oils, such as Venezuelan heavy crude have up to 45% vanadium pentoxide content in their ash, high enough that it is a commercial source for vanadium. These metals are common in Earth's mantle, thus their compounds in oils are often called as abiomarkers.

The abiogenic hypothesis of the formation of hydrocarbons within the earth argues that the petroleum was formed from deep carbon deposits, perhaps dating to the formation of the Earth.

The presence of methane on Saturn's moon Titan is cited as evidence supporting the formation of hydrocarbons without biology.


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Most petroleum geologists however, prefer theories of oil formation, which holds that oil originated in shallow seas as vast quantities of marine plankton or plant materials died and sank into the mud. (No dinosaurs mentioned here).

Under the resulting anaerobic conditions, the resulting organic compounds remained in reduced state. Under these conditions, anaerobic bacteria converted the lipids (fats, oils and waxes) into a waxy substance called kerogen.As the source rock was buried deeper, overburden pressure raised temperatures into the oil window, between 80 and 180 °C.

Most of the organic compounds degraded into the straight-chain hydrocarbons that comprise most of petroleum. This process is called generation kitchen.

Once crude oil formed, it became very fluid and migrated upward through the rock strata. This process is called oil expulsion. Eventually it was either trapped in an oil reservoir or oil escaped to the surface and was biodegraded by soil bacteria.

Oil buried deeper entered the "gas window" of more than 160 °C and was converted into natural gas by thermal cracking. Thus, theory predicts that no oil will be found below a certain depth, only unassociated gas. At greater depths, even natural gas would be pyrolyzed (heat converted).

It is possible that both mechanisms (or more) exist.

Edirne License - Western Turkey, Thrace

Otto Energy, Turkey, holds a 35 per cent interest in the Edirne License onshore Thrace Basin of north-western Turkey.

The Edirne license was originally acquired by Otto Energy in 2004 but is now a non operated asset, operated by joint venture partners Petroleum Exploration Mediterranean Int. (55%) and a local Turkish company Petraco (10%).


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Edirne License showing gas discoveries (red) and prospects (yellow)

To date, seven gas discoveries have been made on the licence for a total of approximately 10-20 Bcf (gross) of discovered gas. Well testing was successfully completed in June 2008 and testing has continued in June/July 2009.

Otto Energy and its joint venture partners have awarded two contracts for the design and engineering of a gas processing plant and pipeline for the development of the Edirne gas fields in Western Turkey.

Negotiations for Gas Sales Agreement is underway and then development of the field with production expected to commence in Q1 2010. This low cost exploration and development project is teamed with a good fiscal regime and a robust domestic gas price. It will become Otto's second producing asset and source of cash flow.


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Wells in Turkey drilled by PolMak:TBNGCYörükler-1

17.02.1987 - 28.03.19873940 ft

DryTBNGCHayrabolu-1

01.03.1988 – 08.04.19884252 ft

GasTBNGCTatarlı-1

02.05.1988 – 30.05.19884164 ft

DryTBNGCHayrabolu-2

20.06.1988 – 21.07.19885565 ft

GasTBNGC + JINBanarlı-1

17.08.1988 – 07.09.19885002 ft

DryTBNGCBayramşah-2

16.07.1989 – 28.08.19894115 ft

GasTBNGC + JINBanarlı-2

07.09.1989 – 24.10.19894877 ft

Dry


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TBNGCHayrabolu-3

15.11.1989 – 16.12.19894851 ft

GasJIN + PAŞPaşayiğit-1

15.02.1991 – 29.03.19916666 ft

DryPAŞKandamış-3

31.07.1991 – 20.08.19913812 ft

DryETI + EELHabiller-3

30.10.1993 – 02.04.19944602 ft

DryTBNGCHayrabolu-4

11.05.1994 – 30.06.19944300 ft

GasPAŞİ. R. Berent-1

14.02.1995 – 28.04.19954360 ft

OilTBNGCGelindere-1

27.07.1995 – 22.08.19954555 ft

Oil


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TBNGCHayrabolu-5

21.01.1996 – 23.02.19964538 ft

GasTBNGCGelindere-2

15.08.1996 – 12.09.19964780 ft

GasG ENorth Iraq Oilfield

15.03.2003 - 15.07.2003Re-entry5750 ft

OilOperators:

TBNGC : Thrace Basing Natural Gas Corporation

JIN : JFP International

PAŞ : POLMAK Sondaj Sanayii A.Ş.

ETI : Exploration Trrenex Inc.

EEL : Eastward Energy Ltd.

G E : General Energy

MEGE : Menderes Geothermal Elektrik Üretim A.Ş.

POLMAK owns 7 rigs operating both locally and internationally of which four rigs are for workover operations and the other three are for drilling operations.RIG 1 : IDECO H-44C Rambler Rig capable to drill 2600 m. operating in Turkey.RIG 2 : Skytop-Brewster RR400 drilling and well servicing unit available in Turkey.RIG 3 : F320-3DH Rig capable to drill down to 6000 m. available in Turkey.


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Doing Business in Turkey - income taxes on individuals and businesses

http://www.businessinturkey.com/non-residents’-foreigners-taxation/tax/

Non-resident companies are those companies that have their statutory seat outside Turkey and/or have an effective place of management outside Turkey. So-called non-resident entities are those companies, which have their headquarters neither legally, nor business wise in Turkey.

The non-resident entities are subject to Turkish corporation tax only on the part of their income earned in Turkey, while others – Turkish Companies – are being taxed on income earned in and outside of Turkey, i.e. their worldwide income.

Based on the Turkish Corporation Tax Law (K.V.K.) there are seven kinds of income for non-resident entities. These types of income are explained below, and maximum burdens of taxation as set forth in Turkish law and tax treaties, as applicable.

10.2.1. Business profits 1.1. Taxability conditionsWhen a foreign company has a permanent establishment in Turkey or has a representative the profits are generated through and by a permanent establishment or representative is regarded as business profit of the foreign entity and subject to Turkish tax. We refer to paragraph “I.1.1. (Individuals) Business Profits”.

1.2. Method of taxationAs explained in the first section in paragraph “I.1.2.”, annual income and expenses will be recorded and books need to be kept, according to Turkish Procedure Law and at the end of the accounting year an annual tax return needs to be submitted. Tax is levied on net profit attributable to the place or activities where it was generated.

Taxable profit comprises the taxable entity’s gains from all sources, derived by any means and in any form.


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http://www.businessinturkey.com/non-residents

http://www.businessinturkey.com/non-residents

Exemptions are provided to encourage investments and stock exchange operations. These exemptions reduce the applicable rate.

Profit and loss is calculated on an annual basis. In principle the taxation year is the calendar year. Exceptions can be granted where the business so requires or the parent company has a different accounting year.

Normally all expenses related to the business are deductible.

The corporation tax rate amounts to 30%.

When profits are distributed or transferred to abroad (Head Office) then 10% withholding tax is applicable on the dividend.

What this basically means, when we receive FUNDS while we are in Turkey or possibly negotiating a deal, i.e. “doing business”, we should be aware of these issues. Entering the country on a pleasure visa, and doing business.. Caution..

10.1.5. Income from immovable property (rent)

5.1. Conditions for taxationEarnings received by letting land, properties, buildings, fixed assets, equipment, motor vehicles and royalty, know-how, patent, trade marks are called income from immovable property and are subject to income tax if received by an individual.

When received by a non-resident individual, if:- The property or the fixed asset is in Turkey or,- The above mentioned intangibles are utilized in Turkey, and- The rent payment is recorded into the books and accounts of a resident individual or company as deductible expense, and then the income is taxable in Turkey.


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Oil discovery