MEOG: Turkish drilling, Saudi results

In this week’s MEOG, we cover drilling plans in Turkey and Aramco’s Q1 results.

Turkish Petroleum (TPAO) has announced plans this week to kick off Turkey’s largest ever drilling campaign as the company prepares to receive its fourth drillship.

Speaking to the Turkish parliament’s commission on public economic enterprises, TPAO chairman and CEO Melih Han Bilgin said that the company would drill 150 wells this year. “This will mark the biggest number of wells TPAO drills in the history of the Republic of Turkey and we see this as a challenge,” he said, adding that 95 of the wells would be for exploratory or appraisal purposes, with the remaining 55 seen as producers.

TPAO currently produces around 170,000 barrels per day (bpd) across its portfolio of assets which are spread throughout Turkey, the Turkish Republic of Northern Cyprus (TRNC), Azerbaijan, Iraq and Russia. To achieve this level, Bilgin said the company has invested $17.5bn since 2012, noting that revenues over that period have amounted to $19bn.

Meanwhile, Saudi Aramco declared net income of $39.5bn, up 82% year on year as it benefitted more than anyone from an average realised crude price of $97.7 per barrel, an increase of more than $37 per barrel y/y.

This drove ballooning upstream revenues, which grew by a full $30bn compared to Q1 2021 to $70.3bn. The company’s downstream business segment also posted a remarkable increase in revenues, which rose from $4.4bn to $10.2bn on improved refining and chemicals margins.

Free cash flow climbed from $18.3bn to $30.6bn and the company continues to pay the $18.75bn per quarter dividend enshrined in its initial public offering (IPO), though with the state still owning 94.3% of the company directly, and another 4% through the Public Investment Fund (PIF), just $319mn per quarter goes to non-state entities and investors.

Meanwhile, the interim report showed that crude oil sales accounted for SAR239.7bn ($64bn), refined and chemical products SAR200.6bn ($53.5bn) and natural gas and NGLs SAR18.7bn ($5bn), all up by more than 80% y/y.