Turcas Kuyucak Geothermal Power Generation

Turcas’ wholly owned subsidiary Turcas Kuyucak Geothermal Power Generation (TKG) which also operates in the field of renewable energy, is the owner and operator of the geothermal power plant in Aydın with an installed capacity of 18 MW. The power plant commenced its commercial operations in full capacity following the acceptance by EMRA on 07.12.2017. In order to provide maximum benefit from the reservoir and increase production, in-well pumps were added into a total of 4 wells as of the reporting period. In addition, works for drilling a new production well and connection to the plant were also completed during the reporting period and commenced production. Investments continued in order to maximize the production capacity of the existing wells and the power generation performance of the power plant. Meanwhile, two production wells in total were converted into injection wells in order to feed the reservoir better, as well as to ensure maximum flow performance.

The Safety Management System was prepared and implemented based on the provisions of the Occupational Health and Safety Law No. 6331 dated 20/6/2012, the Environment Law No. 2872 dated 9/8/1983, and the Presidential Decree No. 4 on the Organization of the Institutions and Organizations that Operate under, Related to, or are Associated with the Ministries, and Other Institutions and Organizations, which was published in the Official Gazette No. 30479 dated 15/7/2018, and under the Regulation on the Prevention and Mitigation of the Impacts of Major Industrial Accidents, which was prepared in line with the harmonization with the European Union legislation, taking into account the Council Directive No. 2012/18/EU, dated 4/7/2012. To this end, field works are in place to develop the Prevention of Major Industrial Accidents Document and to improve competency.

In 2020 Turcas Kuyucak Geothermal Power Generation activated the ISO 9001:2015 Quality Management System, ISO 14001:2015 Environmental Management System, ISO 45001:2018 Occupational Health and Safety Management Systems and was certified by an internationally accredited company.

The power plant maintained power generation and sales activities within the scope of Renewable Energy Resources Support Mechanism during the year of operation. It generated 75.34 Million kWh electricity in 2020.

GÖLMARMARA GPP

In addition, surveys are in progress for electric power generation from geothermal resources based on the operating license of Turcas in the Manisa province. Geological and geophysical exploration works were carried out in the field during Q1 2014, within the scope of the exploration license in Hacıveliler village in Gölmarmara district of the Manisa province. Following the completion of respective surveys, the Company conducted shallow gradient drilling in Q1 2018 and obtained an operating license for the field. Business development activities were also carried on during the year of operation for thermal energy generation from geothermal resources.

As indicated in our Material Disclosures published on March 29, 2017, July 5, 2017 and May 2, 2018, Turcas filed an application to the Turkish Ministry of Energy and Natural Resources General Directorate of Mining and Petroleum Affairs (“MAPEG”) for Petroleum Exploration License concerning the map section M-22A within the provincial borders of Denizli, in line with the objective to enhance its know-how and expertise in geothermal resource exploration and production through onshore petroleum exploration operations. Regarding this aforementioned application, Turcas submitted its “Business and Investment Program” to MAPEG in accordance with the statutory regulations, as required by MAPEG in the invitation sent to Turcas. For the first phase of the investment, the respective program stipulated a minimum investment amount of USD 2.7 million which is to be mainly used for drilling over a period of five years. In May 2018, MAPEG evaluated and approved our application for a Petroleum Exploration License concerning the map section M-22A within the provincial borders of Denizli.

A Farm-Out (the right for assignment of interest under the exclusive license) Agreement was signed with N.V. Turkse Perenco (“Perenco”), a company headquartered in Amsterdam, on 28.02.2020 for exploration of petroleum production potential in the referenced license area and for conducting relevant tests. As such, the required application was made to the General Directorate of Mining and Petroleum Affairs, in order to establish tenancy under this exploration license (Turcas: 50%, Perenco: 50%). Due to the rapid decrease in oil prices in 2020 as a result of the pandemic, many exploration and production companies decided to cut their budgets earmarked for exploration activities and therefore, Perenco informed us that they had to withdraw from their partnership objective in our area. Consequently, we cancelled our application with the General Directorate of Mining and Petroleum Affairs and made a public disclosure accordingly. We continue our efforts to find alternative partners for field development activities.

 

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