IMPROVED weather has let Turkey-focused juniors Eureka Energy and Incremental Petroleum resume work at their respective operations. Meanwhile, Incremental is also lauding changes to Turkey's petroleum legislation, which it says will enable the company to earn higher revenue from its Selmo oil field.
Incremental's Selmo operations in Turkey Earlier this month, Eureka and Incremental said heavy snow and extremely cold temperatures had forced them to halt their activities.
But today Eureka said its operator was preparing to test the Koyunlu-1 well, now that weather and road access in the area had improved. The acidising and testing operations are expected to take about a week.
In addition, Incremental has returned its 100%-owned Selmo oil field to full production, when the last remaining well with frozen flow lines was put back online.
Due to the weather, about 7500 barrels of Selmo oil were deferred.
"In contrast with much of Europe, night-time temperatures at Selmo have remained substantially below zero for over a month, with daytime temperatures often also below zero. The ground is still frozen in many areas," the company said this morning.
"The application of new equipment purchased over the last year, plus continued efforts from our Selmo staff have minimised the disruptions to production."
Sunny outlook for explorers in Turkey
Following five years of consultation between the industry and government, the Turkish parliament passed the Petroleum Law last week.
Of particular interest to Incremental is the new royalty regime, designed to encourage operators of older, smaller oil fields such as Selmo to re-invest to increase production.
Under the old legislation, Incremental was required to pay the Turkish Government 12.5% in royalties. Now the Government will collect 1.7% of royalties on the first 1000 barrels of oil produced per well, increasing to 5% for the next 4000bbl.
This means that Incremental will pay a net royalty of about 3.2%.
As well as the new royalty regime, Incremental said other legislative changes include: • Production licence tenure extended by 10 years; • Five-year tenure on exploration blocks (plus four years with extensions on onshore exploration acreage (previously four plus four); • Requirement to lodge a bond of 2% of proposed exploration program for new applications or renewals
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