Oil, Gas and the Transition to Renewables 2025 Comparisons

Under the Turkish Petroleum Law No 6491, the term “petroleum” includes crude oil and natural gas. Petroleum resources in Türkiye are owned by, and are at the disposal of, the state. However, upstream interests are granted through licences with definite terms. In such cases, exploration licence and production leaseholders must pay the state a one-eighth share (12.5%) as a royalty for petroleum produced from an exploration or production area. Furthermore, under the Turkish Petroleum Law, petroleum right-holders are entitled to export 35% of the total crude oil and natural gas produced in the fields discovered after 1 January 1980 for onshore activities and 45% for offshore activities, but the remaining yield and the total amount of crude oil and natural gas produced in the fields discovered before 1 January 1980 and the petroleum products generated from such crude oil and natural gas are required to be retained in Türkiye to address domestic demand.

The Ministry of Energy and Natural Resources (Enerji ve Tabii Kaynaklar Bakanlığı, or MENR) is the central governmental body responsible for the energy sector, including the determination and implementation of energy policies, as well as the transit of petroleum.

The General Directorate of Mining and Petroleum Affairs (Maden ve Petrol İşleri Genel Müdürlüğü, or GDMPA) is the main department of the MENR and the regulatory authority for all mining and upstream petroleum activities. Presidential Decree No 4 on the Organisation of Affiliated, Related and Associated Institutions and Organisations with Ministries and Other Institutions and Organisations regulates the authorities and responsibilities of the GDMPA, which consists of the issuance and monitoring of permits and licences for the investigation, exploration and production of petroleum, along with mining-related authorities and responsibilities.

The Energy Market Regulatory Authority (Enerji Piyasası Düzenleme Kurumu, or EMRA) is the agency that regulates and monitors energy market activities, grants licences to conduct market activities (such as the distribution of petroleum), and has the authority to impose administrative fines and cancel licences due to non-compliance with applicable legislation. The Law Regarding Organisation and Functions of Energy Market Regulatory Authority No 4628 (Enerji Piyasası Düzenleme Kurumunun Teşkilat ve Görevleri Hakkında Kanun) governs EMRA’s organisation, authority and responsibilities.

The Turkish Petroleum Pipeline Corporation (Boru Hatları ile Petrol Taşıma Anonim Şirketi, or BOTAŞ) is a state-owned economic enterprise involved in the construction and operation of oil and gas pipelines. The legislation governing the activities of BOTAŞ includes the Statutory Decree Regarding State Economic Enterprises No 233. Its activities include construction; the transfer or lease of pipelines for the transportation of petroleum, petroleum products and natural gas; and the transportation, purchase and sale of petroleum, petroleum products and natural gas. BOTAŞ is subject to the Natural Gas Market Law No 4646 and Petroleum Market Law No 5015 for its operations.

The Turkish Petroleum Corporation (Türkiye Petrolleri Anonim Ortaklığı, or TPAO) is another state-owned economic enterprise involved in exploration, drilling and natural gas storage and investing in crude oil and natural gas production. The legislation governing the organisation of TPAO is the Statutory Decree Regarding State Economic Enterprises No 233. TPAO’s activities include the import and export of crude oil, natural gas and petroleum products, and the distribution and marketing of petroleum as defined under the Petroleum Market Law No 5015.

Petroleum-related upstream activities are regulated by the Turkish Petroleum Law No 6491, whereas downstream activities are primarily regulated by the Petroleum Market Law No 5015, the Natural Gas Market Law No 4646 and the Liquefied Petroleum Gas (LPG) Market Law No 5307. The main laws regarding petroleum activities are summarised below.

• The Turkish Petroleum Law No 6491 (Türk Petrol Kanunu) provides procedures and principles for the regulation, promotion and supervision of petroleum exploration and production activities (both onshore and offshore) in Türkiye. The law regulates investment guarantees, exploration licences, production leases, royalties, and incentives, aiming to ensure that petroleum resources in Türkiye are rapidly, continuously, and effectively explored, developed, and produced, while preserving national interests.
• The Petroleum Market Law No 5015 (Petrol Piyasası Kanunu) regulates and provides guidance, oversight and supervisory activities to ensure and improve the safe and regular operations of the petroleum markets and upstream activities. The law outlines provisions on licensing requirements and regulates EMRA’s authority in the petroleum market.
• The Law on Transit Passage of Petroleum through Pipelines No 4586 (Petrolün Boru Hatları ile Transit Geçisine Dair Kanun) regulates the transit passage of petroleum and other hydrocarbons through pipelines, and  procedures for the expropriation of lands, safety measures for the prevention of accidents, and insurance specific to transit petroleum pipelines.
• The Natural Gas Market Law No 4646 (Doğal Gaz Piyasası Kanunu) covers the import, transmission, distribution, storage, marketing, trade, and export of natural gas, the licensing requirements for these activities and the rights and obligations of all natural and legal persons involved in these activities.
• The Liquefied Petroleum Gas (LPG) Market Law No 5307 (Sıvılaştırılmış Petrol Gazları (LPG) Piyasası Kanunu ve Elektrik Piyasası Kanununda Değişiklik Yapılmasına Dair Kanun) covers the distribution and trade of LPG, the licensing requirements for the distribution, transmission, storage, dealership and other LPG bottle-related activities (such as production, filling, examination, maintenance and repair), and the rights and obligations of market players concerning these activities.
• The Regulation on the Implementation of the Turkish Petroleum Law (Türk Petrol Kanunu Uygulama Yönetmeliği) regulates the procedures and principles for petroleum surveying, exploration, production, reporting, taxation, supervision and licensing.
• The Petroleum Market Licence Regulation (Petrol Piyasası Lisans Yönetmeliği) covers EMRA’s functions, responsibilities and authorities with regard to licensing procedures, activities in the petroleum market, and the rights and obligations of petroleum market licence holders.
• The Liquefied Petroleum Gas (LPG) Market Licence Regulation (Sıvılaştırılmış Petrol Gazları Piyasası Lisans Yönetmeliği) covers the LPG licensing procedures and the supply process of LPG procured from domestic and foreign sources to the market in a safe, secure and competitive manner, and determines the qualifications of responsible managers, tanker drivers and other related personnel.
• The Natural Gas Market Licence Regulation (Doğal Gaz Piyasası Lisans Yönetmeliği) covers the principles regarding licensing procedures and the cancellation, termination and renewal of natural gas licences.

Due to Türkiye’s liberalised energy regime, the state-owned oil company, TPAO, no longer has the exclusive right to explore and produce petroleum. Private entities are entitled to acquire permits, licences and leases for upstream activities for the investigation, exploration and production of petroleum. Upstream activities are also open to foreign participation.

As per the Turkish Petroleum Law, three major types of licences and permits are required to conduct upstream activities:

• an investigation permit;
• an exploration licence; and
• a production lease.

The investigation permit grants the right to survey the land by gathering data from the ground or air through topographic, geological, geophysical, geochemical, and similar methods for petroleum exploration purposes, and by performing drilling works. This permit does not grant its holder the right to drill an oil well or appraisal wells. An exploration licence gives its holder the right to explore within the area defined in the licence.

Upon the discovery of a petroleum reserve for commercial production, an exploration licence holder should apply for a production lease that entitles the licence holder to develop and produce petroleum in the area defined in the licence, and to transport and trade the petroleum to downstream licensees that hold a petroleum market activity licence issued by EMRA.

The GDMPA is the authority responsible for applications for these licences.

The GDMPA issues an investigation permit upon the execution of an agreement between the applicant and the GDMPA, which sets forth the permit terms and conditions, the nature of the applicant’s activities, and the rights and obligations of the applicant.

Exploration licences may be granted for onshore and offshore petroleum exploration. Exploration licence applications for grids available for petroleum exploration are published and announced in the Official Gazette, and all applications regarding the available areas, including business and investment plans, should be submitted to the GDMPA. Exploration licence applicants should provide a bank letter of guarantee to the GDMPA in an amount equal to 2% of their total investment; this rate is 1% for offshore activities.

GDMPA examines applications and conducts an overall analysis of the applicant’s business, investment plans, financial status, technical capacity, human resources, experience, and achievements in the energy sector, if applicable. Upon its review, GDMPA issues its decision within 60 days. The maximum term for an exploration licence is five years for onshore activities and eight years for offshore activities, with a right of extension (up to nine years and 14 years, respectively).

Applications for production leases are also submitted to GDMPA. Production leases are granted for a maximum term of 20 years, which may be extended twice, for up to ten years each time. Except for force majeure events, production leaseholders are required to carry out their activities during the licence term without interruption, or risk being exposed to administrative fines under the Turkish Petroleum Law.

In addition to the above-mentioned sector-specific licences, environmental permits (e.g., an environmental impact assessment report, environmental permit, and licence certificate) may also be required to conduct exploration and production activities. Additionally, a workplace opening and operating licence should be obtained from the relevant municipality or governorate (depending on the location).

There are two types of guarantees: an investment guarantee and a loss and damage guarantee, which petroleum right-holders should provide to the GDMPA in the form of bank letters of guarantee.

Exploration licence applicants for onshore areas are required to provide an investment guarantee in an amount corresponding to 2% of the total investment required to realise the work programme, submitted together with their applications. If, however, the exploration licence application concerns an offshore area, the amount of the guarantee will be equal to 1% of the total investment. The amount of the investment guarantee corresponding to the annually realised rate of the committed work programme is returned to the petroleum right-holder at the end of the relevant period.

Investigation permit holders, exploration licence holders and production leaseholders are required to provide collateral to secure compensation for any damages that might be caused during their petroleum-related activities. The President of the Republic of Türkiye has the authority to increase or decrease rates. This guarantee is returned to the licence holder one year after the announcement of the termination of the relevant petroleum licence in the Official Gazette, provided that no loss or damage has occurred and that no third-party claims have been made regarding this guarantee.

At the production stage, explorers or operators should also pay the state share (devlet hissesi) or royalty in cash monthly, At the request of the MENR, the state share may also be paid in kind, in the form of the delivery of petroleum (crude oil) to the state.

Income generated from petroleum activities is subject to corporate income tax. Petroleum right-holders must make the necessary withholdings and declarations, as required under Income Tax Law No 193 (Gelir Vergisi Kanunu) and Corporate Tax Law No 5520 (Kurumlar Vergisi Kanunu). As per the Turkish Petroleum Law, the sum of the taxes that a petroleum right-holder is liable to pay or withhold should not exceed 55% of the licensee’s taxable income. Moreover, if a licensee imports materials, tools, fuel and transfer vehicles for usage for petroleum activities or procures such items from a domestic provider, the licence holder will be exempt from customs duties and levies and stamp tax, as long as the GDMPA categorises these items as being suitable or they are in the exemption list of the quality and quantity of the imported items.

Expired production leases are not automatically returned to TPAO; the GDMPA may auction these sites. However, TPAO has the right of first refusal for such fields. Therefore, the MENR should initially confirm with TPAO whether it wishes to acquire the fields. If TPAO’s response is affirmative, the fields should be returned to TPAO.

As a state-owned entity, TPAO is subject to a simplified procedure for land acquisition through expropriation compared to private investors. TPAO files its expropriation requests directly with the GDMPA, and the GDMPA conducts the expropriation in favour of TPAO, provided MENR approval is obtained.

The current legislation does not impose any requirements for the use of local goods and services, local employment or training programmes in upstream operations.

The exploration licence holder has to notify the GDMPA of any petroleum discovery made during the term of the exploration licence. The GDMPA will then review the discovery application and register the discovery or reject the application. If the GDMPA registers the petroleum discovery submitted by the licence holder, the licence holder will be entitled to apply for the grant of a production lease.

Upon the registration of the discovery of petroleum, but before the grant of the production lease, the licence holder is under an obligation to continue with the production of the petroleum, develop the petroleum field and sell the petroleum produced. These activities will constitute the basis for the production lease. The licence holder must then submit a plan for the development of all discoveries in the petroleum field to the GDMPA within six months of the discovery’s registration date with the GDMPA.

The GDMPA grants production leases for a maximum term of 20 years, commensurate with the applicant’s business and financial investment plans. If production does not commence within one year or is suspended at any stage and not resumed within the 180-day period granted by GDMPA, the relevant production lease will be cancelled.

Under Article 6 of the Petroleum Law, an exploration licence is issued based on a 1/50,000 scale map on land borders and in the seas within the territorial waters. This licence has a five-year term on land and an eight-year term offshore. The term of the licence may also be extended up to two years onshore and three years offshore, as long as the licence holder fulfils the work programme and submits a work and investment programme that includes at least one drilling operation and a corresponding 2% guarantee. In the case that the operation period required for the completion of an exploration well drilled in the exploration area or the completion of production tests, if any, exceeds the duration of the exploration licence, an additional period of up to six months may be granted upon the request of the petroleum right-holder.

To obtain such licence, applications shall be submitted to GDMPA. In the following 60 days, applications covering the same piece of land shall be evaluated and finalised. The applicant shall provide a guarantee of 2% of the investment amount required for the work programme given in the licence application, and this guarantee shall be transferred to GDMPA within 30 days following the finalisation of the licence grant.

Please refer to 2.1 Forms of Private Investment: Upstream, 2.2 Issuing Upstream Licences/Obtaining Hydrocarbon Rights and 2.3 Typical Fiscal Terms: Upstream for a general overview of upstream licences.

Petroleum right-holders may relinquish their exploration licences, either in whole or in part, with at least one month’s prior notice, and their production leases with at least three months’ prior notice, by filing an application to the GDMPA and notifying any other public institutions that are associated with the relevant field. Any rights arising from the exploration licence or the production lease expire for the relinquished field on the date of such application.

Upon termination of their rights, petroleum right-holders must reinstate the field to its previous condition. In addition, the licence holders must fully compensate and make necessary payments to the landowner for all losses incurred, including depreciation in production (eg, agricultural yield) or operating income to which the owner would originally be entitled.

Licence holders are allowed to export 35% of the petroleum, crude oil, natural gas and petroleum products generated from commercial discoveries made after 1 January 1980 if such products are produced onshore, and 45% if such products are produced offshore.

There are two types of transfers:

• licence transfers upon the expiry of their terms; and
• share transfers, which would result in a change of control in a company that holds a petroleum licence or lease.

The transfer of upstream licences upon the expiry of their terms will be made by the procedure detailed in 2.5 Federal or State Companies.

If a share transfer leads to a change of control in the licensed entity, both the transferor and the transferee should apply to the GDMPA before the proposed transfer. If the MENR provides its consent to the transaction, the closing for the transfer of shares should be completed before the end of the calendar year in which the MENR issued its consent. Evidentiary documentation showing such a change should be provided to the GDMPA.

Exploration licences and production leases, as petroleum rights arising from them, may be subject to encumbrances in favour of third parties, provided that the prior consent of the GDMPA has been obtained and that these pledges are registered with the petroleum registry kept by the GDMPA.

The grant or transfer of exploration licences and production leases, and the establishment of any encumbrances on them, must be published in the Official Gazette and registered with the petroleum registry.

The GDMPA may refuse to give its consent to the transfer of shares, licenses, or leases, or to the establishment of any encumbrance over the shares of a licensed entity or over the transfer of licences, due to reasons such as lack of experience or insufficient financial and technical capacity.

Currently, upstream operations in the oil and gas industry have yet to capture a significant portion of the Turkish market, as production rates are relatively low. In line with the existing operational level, no legal or regulatory restrictions are imposed on production rates based on national or international obligations.

According to the Petroleum Market Law and the Natural Gas Market Law, a licence is required to perform market activities. Licence applications are made to EMRA. Licensees are entitled to benefit from the expropriation process if required by the licensed activities. Please see 3.11 Third-Party Access to Infrastructure for details on the legal framework for expropriation.

The Natural Gas Market Law states that BOTAŞ is the owner of all existing, under-construction or planned sections of the national natural gas transmission network. However, the law permits new transmission companies to be licensed to construct new pipelines, to form an interconnected system with the existing transmission lines, and to operate such newly constructed pipelines. Legal entities holding licences for transmission activities are obliged to store natural gas in underground storage facilities at a rate determined by EMRA equal to the import amount specified in their licences each year. As the only natural gas transmission licensee, BOTAŞ is effectively a monopoly in transmission activity.

While the Natural Gas Market Law provided for the full opening of the market to private companies in 2009, BOTAŞ maintains its dominant position in the import of natural gas into Türkiye. Under current legislation, import companies cannot enter into new gas sale and purchase contracts (except for the purchase of LNG, compressed natural gas (CNG) and spot LNG) with countries that have effective gas sale and purchase contracts with BOTAŞ until such contracts expire. New entrants are currently not permitted to import gas from countries with which BOTAŞ has contracts, such as Russia, Azerbaijan, Turkmenistan or Iran. This restriction on executing contracts with BOTAŞ’s existing counterparties does not apply to LNG, CNG and spot LNG imports. 

BOTAŞ cannot execute a new natural gas purchase contract until the share of gas imported by BOTAŞ falls to 20% of the yearly national consumption. Additionally, for a private company to import gas from other companies with which BOTAŞ does not have a contract, consent is required from the Energy Market Regulatory Authority Board (the “EMRA Board”).

Until and unless such restrictions on natural gas import activities are restructured and adapted to the current realities of market activity, BOTAŞ will continue to be a significant and dominant player in natural gas importation.

In the natural gas market, companies holding transmission licences are not permitted to discriminate between third parties of equal status. Such companies may reject third-party access requests only based on the grounds exhaustively listed under the Natural Gas Market Law.

Third-party access to the transmission network, and the activities of natural gas storage facilities, is regulated under the Transmission Network Operation Regulation (Doğal Gaz Piyasası İletim Şebekesi İşleyiş Yönetmeliği) and the BOTAŞ Transmission Network Operation Principles (İletim Şebekesi İşleyiş Düzenlemelerine İlişkin Esaslar) (the “Network Code”). In line with the Network Code, BOTAŞ operates the transmission network and manages and co-ordinates the access of third parties to it. To access the network, a connection agreement must be entered into between BOTAŞ, as the sole transmission licensee and owner of the existing national transmission network, and the respective import, wholesale, generation, or export company.

Following the connection agreement, a standard-form transportation contract should be entered into for the transportation of gas through the transmission system, and for capacity allocation at an entry or exit point. The Network Code outlines detailed technical criteria and formulas for calculating tariffs applicable to third-party natural gas transmission activities.

To conduct oil and gas market activities, licence applications must be submitted to EMRA, which will issue a final decision within a maximum of 60 days from the application date (this period is set at 30 days for import (spot) licences). If the relevant department of EMRA determines that the application is complete, it will notify the applicant to deposit the application fee in an amount corresponding to 1% of the licence fee.

Following payment, EMRA will review and evaluate the licence applications. EMRA will then prepare a report on its evaluation and submit it to the EMRA Board, which is the decision-making body of EMRA for licence applications, for rendering the final decision on licence applications.

As per the Petroleum Market Licence Regulation, the EMRA Board annually determines the specific revenue share (gelir payı) that should be paid by processing licence holders (as explained in 3.8 Other Key Terms: Midstream/Downstream) engaged in the production of biodiesels to refinery holders, with rates determined by EMRA on a yearly basis. Licence holders not engaged in the production of biodiesels are not required to pay any revenue share.

However, licence holders should pay a contribution share (katılma payı) to EMRA on an annual basis in two equal instalments. The amount of contribution shares is calculated by multiplying the total net sales of the licensee made in the relevant year by the annual contribution ratio as decided by the EMRA Board each year.

In parallel to the foregoing, natural gas licence holders are also required to pay contribution shares to EMRA.

Tariffs and pricing policies in petroleum and natural gas activities are determined by EMRA under the Petroleum Market Pricing System Regulation (Petrol Piyasası Fiyatlandırma Sistemi Yönetmeliği) and the Natural Gas Market Tariffs Regulation (Doğal Gaz Piyasası Tarifeler Yönetmeliği), respectively.

The only special tax incentive available is for activities involving the transportation of foreign crude oil and natural gas through transit pipelines and the construction and modernisation of pipelines; as a result, these activities are exempt from VAT under the Value Added Tax Law No 3065.

In addition, as of 1 January 2014, the construction and modernisation of transit oil pipeline projects are exempt from VAT under project-specific intergovernmental agreements. Any VAT incurred from the delivery of goods and services within this scope can be deducted from the taxes calculated on taxable transactions. If these taxes cannot be fully offset through deductions, they will be refunded to the taxpayer upon request.

BOTAŞ’s natural gas-related receivables are subject to the Law on Collection of Public Receivables No 6183 (Amme Alacaklarının Tahsili Usulü Hakkında Kanun), which allows them to benefit from special treatment in terms of enforcement action in debt collection. However, private market players do not benefit from such a mechanism.

Furthermore, the relevant legislation restricts the scope of market activities that licence holders may conduct. A natural gas market licensee performing activities in the natural gas market may only participate in one of the legal entities performing activities in a field other than its field of activity. A licensee cannot participate in any other legal entity performing activities in its field of activity, nor establish a separate company. However, such a restriction is not applicable to BOTAŞ or its existing or future subsidiaries.

Please see 3.1 Forms of Private Investment: Midstream/Downstream regarding BOTAŞ’s dominant market position concerning natural gas import activities.

In parallel with upstream operations (as explained in 2.6 Local Content Requirements: Upstream), there are no requirements for the use of local goods and services, local employment, or training programmes in downstream operations.

Pursuant to the Petroleum Market Licence Regulation, recipients of the various licences granted by EMRA are subject to the terms summarised below.

• Refinery licence holders are entitled to establish and operate a refinery facility, purchase and sell petroleum, obtain new products from crude oil, purchase and sell crude oil domestically only with other refiners and producers, and store and process petroleum.
• Processing licence holders are entitled to produce new products from petroleum, biodiesel, HVO diesel from sustainable aviation fuel, and diesel types under the sub-heading of biorefinery and other petrochemical products, except for the production of fuel oil from waste of non-biological origin, besides those classified as hazardous waste in the relevant legislation under the waste subheading, and may also alter the quantity and quality of the product and operate a processing facility.
• Lubricant oil licence holders are entitled to produce lubricant oil in the lubricant oil production facilities, and provided that it is included as a subcategory in their licences, they may also produce base oil from waste lubricating oil.
• Storage licence holders are entitled to provide storage services and operate a storage facility.
• Transmission licence holders are entitled to transfer petroleum via pipelines and operate a transmission facility.
• Eligible consumers are entitled to acquire heating oil, fuel oil and diesel from distributor licence holders.
• Bunker fuel delivery licence holders are entitled to procure bunker fuel from refineries, distributors and other bunker fuel delivery licence holders from Türkiye and abroad, and to supply bunker fuel subject to the transit regime or in free circulation to sea or air vessels and other legal entities holding bunker delivery licences. They are also permitted to blend products in the preparation of maritime fuels within the scope of the transit regime, provided that the final product is a maritime fuel, and to operate bunker delivery facilities.
• Distributor licence holders are entitled to distribute fuel to dealers, conduct wholesale of fuel to eligible consumers, transport fuel through pipelines to plants located near storage facilities, and import certain types of fuel, and if included as a subcategory in their licences, sell fuel exempt from Special Consumption Tax directly to commercial marine vessels. Additionally, they can engage in bunker delivery, storage, lubricating oil and transportation activities without needing additional licences, provided these activities are included in their licences.
• Dealership licence holders are entitled to supply fuel (except for LPG), solely from their distributors and third-party dealers.
• Transportation licence holders are entitled to transport petroleum through vehicles.

The Petroleum Market Law imposes a national petroleum storage (ulusal petrol stoğu) obligation to secure the availability of petroleum against fluctuations in supply. To that end, refinery and distributor licence holders are required to store fuel products in the amount of 20 times the daily average supply of the previous year in their own storage facilities.

Except for refinery licences, there are no domestic supply requirements. In the case of refinery licences, licensees are required to prioritise the procurement of crude oil from local producers over foreign suppliers.

All licences are granted for up to a maximum of 49 years. Licence holders must file an electronic application with EMRA for an extension to the licence term between two and six months before the expiry of the licence term.

The legislation further imposes certain insurance obligations on licensees. As per the Natural Gas Market Licence Regulation, the types of licences and authorities granted are summarised as follows.

• Import licence holders are entitled to carry out the activities of importing natural gas in the form of LNG, CNG or gas from abroad for domestic sale or for export purposes. Importers must obtain a separate licence for each import connection.
• Transmission licence holders are entitled to plan, construct and operate the transmission system. They are also responsible for connecting users to a suitable transmission line, and for making the necessary arrangements for the natural gas flow and operation of the system.
• Storage licence holders are entitled to operate, construct and design the underground and above-ground storage and LNG facilities.
• Wholesale licence holders are entitled to sell natural gas to export companies, eligible consumers, CNG companies, importers, distributors and other wholesale companies.
• Distribution licence holders are entitled to sell and deliver natural gas to retail consumers and eligible consumers by providing access to the distribution system.
• CNG licence holders are entitled to compress natural gas, fill the CNG into pressurised containers and sell the same. Moreover, licence holders are authorised to transport CNG through special vehicles to cities that are out of reach of the transmission network.
• Export licence holders are entitled to buy natural gas from production, wholesale or export companies, and to market the natural gas to foreign buyers. Legal entities wishing to export LNG may engage in LNG transport activities, provided that it is included in their export licences; however, they may not engage in domestic delivery activities.

Natural gas market licences terminate upon the expiry of the term of the licence, the bankruptcy of the licence holder, or a request for termination of the licence by the licence holder (except for refinery, transmission and storage licences).

Natural gas market licences are granted for a term ranging between ten and 30 years. Licensees may file an extension request with EMRA between nine months and one year before the expiry of the relevant licence. Natural gas market players should also maintain sufficient insurance coverage.

The Regulation on Measures Regarding Natural Gas Market Distribution Licenses (Doğal Gaz Piyasası Dağıtım Lisanslarına İlişkin Tedbirler Yönetmeliği), which entered into force on 19 August 2023, provides a regulatory framework to secure the natural gas distribution service, prevent service disruption and protect consumers, by imposing certain administrative measures on distribution licence holders, under certain circumstances such as deterioration of the licensee’s financial capacity, the licensee’s recurring violations of applicable legislation, or interruption of distribution activities (quality- or quantity-wise) due to such violations. In doing so, the EMRA Board shall have the discretion to implement the measures (and the extent of same) such as reappointment of some or all of the management and administrative staff of the distribution licensee, investigation of the licensee to assess its compliance with applicable legislation, and eventually licence cancellation.

Petroleum or natural gas licence holders may submit a request to EMRA to establish property rights other than ownership over publicly owned property (such as usufruct rights, servitude rights or construction rights) or to lease the publicly owned property required for the licensed activities on a long-term basis. If EMRA approves the licence holder’s request, it will then procure the establishment of such rights in favour of the licence holder, according to the project’s needs. Licence holders are required to pay the costs for the grant of those rights, and the term of such rights will be limited to the licence term. If, however, the land is private property, an expropriation process would need to be triggered, analogous to the common law process of eminent domain.

Both the Petroleum Market Law and the Natural Gas Market Law allow the expropriation of private property if it is required for licensed activities. Under the Petroleum Market Law, land rights necessary for petroleum activities where private property is affected should, in principle, be acquired through negotiation between the licensees and the landowners. If this is not possible, land rights may be acquired through expropriation. According to the Natural Gas Market Law, expropriation proceedings may be initiated to perform relevant natural gas market activities.

Following the expropriation process, under both the Petroleum Market Law and the Natural Gas Market Law, the state treasury becomes the owner of the property, which usually allocates the land directly to the licence holder by the granting of a contractual usage right or property right other than ownership over the relevant land.

As explained in 1.3 National Companies, the legislation governing activities of BOTAŞ includes the Statutory Decree Regarding State Economic Enterprises No 233. Its activities include construction; the transfer or lease of pipelines for the transportation of petroleum, petroleum products and natural gas; and the transportation, purchase and sale of petroleum, petroleum products and natural gas. BOTAŞ is subject to the Natural Gas Market Law No 4646 and Petroleum Market Law No 5015 concerning its operations.

Law No 4586 of 23 June 2000 on the Transit of Petroleum by Pipelines (the “Pipeline Law”) is the main legislation governing the transport of hydrocarbons via cross-border pipelines. Domestic transmission and transport is also regulated by the Petroleum Market Law No 5015 dated 4 December 2013 and the Natural Gas Market Law No 4646 dated 18 April 2001.

While the Pipeline Law regulates the principles and procedures for projects (eg, expropriation, pipeline safety, third-party liability, and insurance), the inter-governmental agreements (IGAs) to be signed for the construction and operation of each project typically feature more detailed, project-specific provisions that supersede the law.

As part of the legislation on this subject, the Decree published on 11 November 2011 in the Official Gazette prohibits the import, export and transit of petroleum by road and rail unless a special permit is obtained from the Ministry of Customs and Trade.

Currently, BOTAŞ is the only natural gas transmission licensee and the sole owner of the existing transmission network. See 3.1 Forms of Private Investment: Midstream/Downstream and 3.2 Downstream Operations Run by a National Monopoly: Rights and Terms of Access for details on private parties’ access to the transmission network.

A large portion of state-owned distribution companies have been privatised (some have yet to be finalised), with a notable exception being the distribution company in İstanbul (İstanbul Gaz Dağıtım Sanayi ve Ticaret Anonim Şirketi, or İGDAŞ). EMRA is responsible for granting distribution licences for the supply of gas to cities with no natural gas distribution network. As BOTAŞ’s transmission network reaches a new city, EMRA organises a natural gas distribution licence tender for that city. Access to the distribution network is regulated separately under the Natural Gas Distribution and Customer Services Regulation (Doğal Gaz Piyasası Dağıtım ve Müşteri Hizmetleri Yönetmeliği). Distribution companies are required to connect all consumers within their designated region upon request. A connection agreement between the parties is executed, and the technical connection and service lines are established. Subscription agreements, transportation service agreements and delivery service agreements may also be executed between distribution companies, natural gas market licensees and retail consumers (including eligible consumers).

Under the Petroleum Market Law and the Petroleum Market Licence Regulation, a refinery, distributor or dealership licence is required to conduct the distribution and/or sale of petroleum. Under the Natural Gas Market Law, the wholesale and distribution of natural gas is permitted by obtaining licences for such activities from EMRA.

Refinery licence holders should store petroleum/petroleum products equivalent to 20 times the daily average supply in storage facilities to satisfy the national petroleum storage obligation. Furthermore, distribution licence owners are obliged to fulfil and incrementally increase white product (gasoline and diesel oil) sales at annual prescribed tonnages.

Under the Natural Gas Market Law, the annual imports of natural gas by any wholesale company cannot exceed 20% of the annual national gas consumption forecast, which EMRA determines on an annual basis.

Import licence holders may conduct wholesale natural gas transactions without obtaining a separate wholesale licence. To that end, it is sufficient for such legal entities to inform EMRA about their suppliers of natural gas and the types of transportation methods they intend to use, and their technical and financial capabilities.

A producer of natural gas is entitled to sell the gas it produces directly to eligible consumers, as long as the volume of gas sold in such a manner does not exceed 20% of the national consumption forecast, as determined by EMRA, for that year. It may sell the excess quantity of natural gas to import companies, distribution companies or wholesale companies. Producers may also export the gas produced, if they obtain an export licence.

The Turkish Petroleum Law imposes an export capacity restriction: only 35% of petroleum, crude oil, natural gas and petroleum products produced onshore and 45% of petroleum, crude oil, natural gas and petroleum products produced offshore may be exported. The remaining yield must be retained in Türkiye to fulfil domestic demand. Furthermore, the Natural Gas Market Licence Regulation mandates that exports cannot interrupt local requirements or the supply system, which becomes relevant especially in the transfer of natural gas via pipelines. Exporters of natural gas must adhere to the technical specifications introduced by EMRA, taking into account the capacity of the transmission network and the export exit points.

In respect of natural gas exports, if a petroleum right-holder producing natural gas wishes to export its production, it should obtain a natural gas wholesale licence. Any other party wishing to export natural gas must obtain an export licence from EMRA. Accordingly, export licence holders are entitled to buy natural gas from production, wholesale or export companies, and to export the natural gas to foreign buyers.

As per the Petroleum Market Licence Regulation, crude oil and petroleum products may be exported freely. To export petroleum products, various export authorisations must be obtained from the relevant state authorities, including the GDMPA and EMRA, depending on the type of activity.

Under the LNG Market Licence Regulation, LNG distribution licence holders and refinery licence holders are entitled to export LNG, and LNG export licence holders will also be entitled to transport LNG provided that such transportation right is annotated to their licences.

There are no taxes or duties applicable to the export of these products. On the contrary, if export companies have purchased these products from local parties and paid VAT or special consumption tax, incentives are available for the export companies to have these taxes reimbursed.

The Petroleum Market Licence Regulation and the Natural Gas Market Licence Regulation prohibit the transfer of downstream licences, but both provide for an exception in favour of project lenders (ie, banks and other financial institutions). Accordingly, depending on the terms and conditions of the financing agreements, lenders are entitled to request EMRA to reissue the subject matter licence in the name of another legal entity, provided that all the initial licence holder’s undertakings concerning the licence are transferred to that third party and the new licensee satisfies the criteria sought for licence applicants within the scope of the above-mentioned regulations.

Applications for downstream oil and natural gas licences can only be filed by Turkish companies. That said, no limitation prevents a Turkish licensee company from being wholly or partly owned by foreign individuals and/or legal entities.

The Foreign Direct Investments Law No 4875 (Doğrudan Yabancı Yatırımlar Kanunu) provides that all companies established in Türkiye are accepted as Turkish companies, regardless of the nationality of their shareholders. It also sets forth that companies with foreign investors must be treated the same as those with domestic investors. As a result, foreign direct investments cannot be expropriated or nationalised, except public order exceptions.

International arbitration is frequently used as a method of dispute resolution. Türkiye is a signatory to, inter alia, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Energy Charter Treaty. Türkiye has signed bilateral investment treaties with 98 countries, 86 of which are in force

Türkiye does not operate a standalone sanctions regime restricting the trade of oil or gas with specific jurisdictions, and its energy policy has, in practice, remained largely insulated from extraterritorial embargoes imposed by third states. While Türkiye observes its obligations under the United Nations framework, it is not directly bound by unilateral sanctions enacted by the United States or the European Union. To that end, Türkiye has continued to cultivate long-standing energy partnerships with a wide range of supplier countries. At this point, natural gas continues to flow from the Russian Federation through established pipeline corridors, while imports from the Islamic Republic of Iran are governed by an intergovernmental agreement until 2026. In navigating the complexities of international sanctions, Türkiye has relied on diplomatic arrangements, including a waiver granted by the USA in late 2024 allowing payments for Russian gas via Gazprombank.

Environmental Law No 2872 (Çevre Kanunu) and its secondary regulations are the primary legislation governing environmental matters. In addition, the Turkish Petroleum Law, the Petroleum Market Law, the Regulation on the Implementation of the Turkish Petroleum Law, the Petroleum Market Licence Regulation and the Natural Gas Market Law impose rules and standards relating to environmental protection, as follows.

• Environmental Law No 2872: All related parties must prevent, stop and take necessary precautions to mitigate the effects of pollution. The law sets forth a strict liability rule.
• The Turkish Petroleum Law: Petroleum right-holders must not commit any dangerous act (as defined under the legislation) directly or indirectly during the conduct of petroleum operations.
• The Petroleum Market Law: Persons who conduct petroleum market activities should take all necessary precautions to prevent damage to the environment and notify public authorities in the event of any risk of damage to the environment.
• The Regulation on the Implementation of the Turkish Petroleum Law: Petroleum right-holders must take all necessary measures to protect the environment and cultural assets.
• The Petroleum Market Licence Regulation: Persons who conduct petroleum market activities are obliged to refrain from any dangerous acts and should take all necessary precautions to prevent any damage to the environment.
• The Natural Gas Market Law: The law sets the policy goal of providing natural gas to consumers in a secure, competitive and cost-efficient manner without damaging the environment.
• The Environmental Impact Assessment Regulation (Çevresel Etki Değerlendirmesi Yönetmeliği): Petroleum refineries, natural gas facilities, and petroleum, natural gas and chemical transportation systems and storage facilities are subject to an environmental impact assessment (EIA) process.
• The Environmental Permit and Licence Regulation: Facilities where petroleum market activities are conducted are required to obtain an environmental permit or an environmental permit and licence certificate before the commencement of their activities.
• The Law Regarding the Principles of Emergency Intervention and Compensation of the Damages in Cases of Sea Pollution from Petroleum and Other Hazardous Materials No 5312 (the “Sea Pollution Law”) (Deniz Çevresinin Petrol ve Diğer Zararlı Maddelerle Kirlenmesinde Acil Durumlarda Müdahale ve Zararların Tazmini Esaslarına Dair Kanun): As per the Sea Pollution Law, all vessels carrying petroleum products and all persons responsible for offshore facilities must take all necessary precautions to prevent damage. Furthermore, public authorities must be informed of any hazardous materials carried in vessels that may pose a pollution risk.
• The Law on the Transit Passage of Petroleum through Pipelines (Petrolün Boru Hatları ile Transit Geçişine Dair Kanun): Participants in pipeline projects are required to prevent environmental damage to all natural resources. In the event of any damage, the project participants are required to provide compensation.
• The Regulation on Control of Soil Pollution and Contaminated Sites (Toprak Kirliliğinin Kontrolü ve Noktasal Kaynaklı Kirlenmiş Sahalara Dair Yönetmelik): Crude oil and natural gas production are regarded as potentially soil-polluting activities. Accordingly, facility owners/operators are required to cease any pollution-creating activities, determine the effects of the pollution, and carry out activities to clean contaminated areas.
• The Industrial Air Pollution Control Regulation (Sanayiden Kaynaklı Hava Kirliliğinin Kontrolü Yönetmeliği): This regulation sets out the principles with which crude oil facilities, petroleum refineries and storage facilities should comply with industrial air emissions.

The main regulatory authority regarding environmental safety is the Ministry of Environment, Urbanisation and Climate Change (Çevre, Şehircilik ve İklim Değişikliği Bakanlığı, or MoE), the primary responsibilities of which are the protection of the environment, the prevention of environmental pollution, and the setting forth of standards and procedures for environmental safety.

Major petroleum projects are subject to an EIA process, and are also required to obtain certain environmental licences before commencement of their upstream and midstream operations, such as refinery operations. The Environmental Impact Assessment Regulation requires an EIA report to be filed for certain projects, or an “EIA not required” decision to be issued for projects subject to the Selection and Screening Criteria (if applicable).

Accordingly, as per the Environmental Impact Assessment Regulation, projects that carry a high risk of environmental pollution are subject to an EIA process. Concerning projects falling within the scope of the regulation, unless an affirmative opinion or an “EIA not required” decision is issued, no approval, permit, incentive or usage licence can be issued. In addition, as per the Environmental Permit and Licence Regulation, facilities engaged in certain petroleum activities, as detailed under Annexes I and II of the Environmental Permit and Licence Regulation, are required to obtain a temporary activity permit (geçici faaliyet belgesi) before the commencement of their activities. However, they should obtain an environmental permit (çevre izni) or environmental permit and licence certificate (çevre izin ve lisans belgesi) within a maximum period of one year following the issuance of the temporary activity permit.

Furthermore, to prevent any possible accidents, licensees are also required to comply with various obligations imposed under specific legislation throughout the conduct of their activities, summarised as follows.

• The Regulation on the Protection of Employees from the Dangers of Explosive Environments (Çalışanların Patlayıcı Ortamların Tehlikelerinden Korunması Hakkında Yönetmelik) states that employers should prepare a document that sets out the health and safety precautions to be adopted for the protection of employees due to possible explosions in such workplaces.
• The Regulation Regarding the Prevention of Major Industrial Accidents and Mitigation of their Effects (Büyük Endüstriyel Kazaların Önlenmesi ve Etkilerinin Azaltılması Hakkında Yönetmelik) states that entities that keep hazardous substances should take all necessary precautions to mitigate the effects of major industrial accidents. Furthermore, the Regulation requires operators of entities that store hazardous substances to prepare a major accident prevention policy document (büyük kaza önleme politikası belgesi) before commencing their operations.

The Sea Pollution Law and the Regulation on the Implementation of the Law Regarding the Principles of Emergency Intervention and Compensation of the Damages in Cases of Sea Pollution from Petroleum and other Dangerous Materials (the “Sea Pollution Regulation”) regulate marine safety and the prevention of marine pollution.

According to the Sea Pollution Law, offshore facilities are obliged to prevent any pollution or potential hazard, and should mitigate any damage if a polluting event occurs and provide compensation in respect of all damage caused. Such facilities are also required to hold liability insurance for damages covered under the Sea Pollution Law. Otherwise, offshore facilities will not be permitted to conduct their activities.

According to the Turkish Petroleum Law and its secondary legislation, upon the expiry of an upstream licence, petroleum right-holders are required to reinstate the site to its original physical status before commencing their upstream activities. Furthermore, if licence holders fail to remove any of the movable or immovable properties located on the site within six months following the expiry of their licences, ownership of the movable or immovable property left on the site will pass to the owner of the site.

Türkiye has undertaken a wide range of legislative initiatives and acceded to several international agreements related to climate change, including the Paris Agreement. Türkiye’s Nationally Determined Contribution status is limited to general undertakings without being bound by quantitative limitations on current emissions levels.

In this context, Türkiye’s first Climate Change Law, having entered into force on 9 July 2025 upon its publication in the Official Gazette, aims to address climate change concerns. It outlines measures for reducing greenhouse gas emissions, establishing a carbon emissions market, implementing a carbon tax, and emission trading, as well as climate change adaptation activities, revenues, permits, audits, and the related legal and institutional framework.

As long as a producer holds the necessary licences and authorisations – whether market-related (ie, upstream operations) or environmental, health and safety related – and complies with the terms and conditions of such licences and the applicable legislation in all respects, then neither the government nor the relevant state authorities are entitled to limit oil and gas development or restrict the operations of the licence holder.

In Türkiye, significant strides have been made in energy transition, primarily driven by the Twelfth Development Plan approved by the Grand National Assembly of Türkiye for the period between 2024 and 2028. The Plan, under the scope of the Presidency of Strategy and Budget focuses on, inter alia, local production capabilities in renewable, nuclear, energy storage, and hydrogen technologies by conducting an inventory and developing a roadmap for advancement. International collaborations, particularly in the development of green hydrogen technologies and infrastructure, are supported. Efforts are being made to develop local electrolysers to support green hydrogen production. Comprehensive regulations for the recycling of raw materials used in energy technologies are being implemented, and awareness is being raised among manufacturers and consumers through incentive mechanisms. Additionally, EMRA prepared a draft regulation on the Operation of Carbon Markets, published for consultation at the end of 2023. Inspired by the cap-and-trade model in the European Directive, this draft regulation proposes the establishment of primary and secondary carbon markets in Türkiye, operated by the Energy Exchange Istanbul (EXIST).

Oil and gas facilities such as refineries are developing renewable energy resources for self-consumption. Türkiye Petrol Rafinerileri Anonim Şirketi (Tüpraş), the leading refinery in Türkiye, is commissioning solar energy power plants at its refineries to increase the share of renewables in its energy consumption. Separately, the Second National Energy Efficiency Action Plan (2024–2030), set out under the Energy Efficiency 2030 Strategy and published by MENR, identifies the support of R&D activities for next-generation technologies and applications, including electricity storage, low-carbon hydrogen, carbon capture, utilisation and storage (CCUS), and hybrid electric arc furnaces in the steel industry, as a key strategic objective.

The energy transition in Türkiye aims to enhance security of supply while also improving energy access and sustainability. Türkiye is assessing the feasibility of energy transition projects such as carbon capture, utilisation and storage (CCUS) and hydrogen electrolysis. Currently, Türkiye has not deployed any CCUS practices. However, Türkiye has experience in similar applications, such as enhanced oil recovery and the capture and reinjection of CO₂ for pressurisation in geothermal fields. These experiences are expected to guide the development of Türkiye’s CCUS policies. Under the Turkish Petroleum Law, CO₂ produced in oil fields can be used in enhanced oil recovery activities.

Unconventional upstream activities (such as the exploration for, and production of, shale gas, shale oil, aquiclude gas, gas hydrates, bituminous coal and coal bed methane) are regulated under the Turkish Petroleum Law, the Regulation on Implementation of the Turkish Petroleum Law and secondary regulations. It is worth mentioning that the Law and secondary regulations do not explicitly define unconventional petroleum. Furthermore, there is no special regime for unconventional upstream interests. In the absence of a special regime, unconventional upstream activities will be subject to the same regime as conventional upstream operations.

Activities concerning LNG fall within the Natural Gas Market Law and secondary legislation, namely the Natural Gas Market Licence Regulation and the Regulation on the Principles and Procedures for the Use of LNG Storage Facilities (Sıvılaştırılmış Doğal Gaz Depolama Tesisi Temel Kullanım Usul ve Esaslarının Belirlenmesine Dair Yönetmelik). To conduct LNG activities, companies are required to obtain a licence from EMRA. Furthermore, the Regulation on the Procedures and Principles for the Use of LNG Storage Facilities governs the process for establishing LNG storage facilities.

Companies authorised to export LNG may also conduct LNG transportation operations, provided that these are included in their export licences and they refrain from engaging in domestic distribution activities.

LNG investments amounting to a minimum of TRY500 million are entitled to benefit from various sectoral incentives, including a customs tax exemption, a VAT exemption, a tax deduction, financing interest support, and the allocation of investment land.

In line with Türkiye’s goal of establishing a liberalised oil and gas market capable of competing with markets in other countries, various legislative instruments have been brought into force over the past decade. These legislative instruments aim to establish an environment conducive to the safe and secure supply of oil and gas from both domestic and foreign sources to consumers in Türkiye under transparent market conditions. Furthermore, Türkiye’s geographical advantages enable it to tap into wider regions with large energy reserves, such as the Middle East and Asia, while simultaneously serving as a safe, cost-efficient, and reliable energy transit corridor for Western markets. Although production activities in the Turkish oil and gas markets are rather limited, Türkiye long ago began to play a leading role as an internationally significant oil and gas transit state in major oil and gas pipeline transportation projects, some of which pass solely through, or terminate within, Turkish borders.

There have been several changes to the oil and gas legislation over the past year.

The provision under Law No 5015 on the Petroleum Market, which prohibited the issuance of a licence for a facility subject to investigation until the completion of a tax investigation concerning smuggling offences regulated under Tax Procedure Law No 213, was annulled by the Constitutional Court because it violated the principle of proportionality.

In terms of cross-cutting regulation, cybersecurity obligations for energy infrastructure were expanded in September 2024. With the amendment to the Regulation on Cyber Security Competence Model in the Energy Sector (Official Gazette, 8 September 2024), natural gas transmission pipelines, storage facilities, and crude oil pipelines were brought within the regulatory scope. The updated framework mandates the implementation of minimum technical and organisational security measures to protect industrial control systems (EKS) used in upstream and midstream facilities.

A key recent development in Türkiye’s investment environment is the issuance of Presidential Decision No 9903 (Yatırımlarda Devlet Yardımları Hakkında Karar), published in the Official Gazette on 30 May 2025. The new framework introduces targeted support mechanisms to promote high-value-added investments aligned with Türkiye’s development goals, including import substitution, supply security, green and digital transformation, and the attraction of foreign direct investment. Within this framework, renewable energy investments carried out by manufacturing facilities for their electricity consumption are supported under the Priority Investments Incentive Scheme. Specifically, the construction of solar and wind power generation plants, limited to the contract capacity defined in the connection agreement, is eligible for incentives. Moreover, electricity generation projects using Group 4-b minerals (as defined under Article 2 of the Mining Law No 3213) as inputs, based on valid mining operation licences and permits granted by MENR, also qualify. Projects supported under the Priority and Targeted Investment Incentive Schemes are entitled to benefit from regional incentive measures, including customs duty exemption, VAT exemption, tax deduction, interest or profit share support, and land allocation.