1) Why an oil exploration licence is more than a permit
In Türkiye, an oil exploration licence (in practice, “arama ruhsatı”) is not merely an administrative permission to drill. It is a petroleum right that sits at the center of a regulated ecosystem involving technical work commitments, financial guarantees, data-reporting duties, land access, environmental and safety compliance, and strict publication/notification rules.
From an investor’s perspective, the exploration licence is often the key asset: it determines the project footprint (map sections), time horizon (onshore/offshore terms and extensions), and the ability to move from exploration to production. From a legal risk perspective, the same licence is also the primary point of enforcement: if mandatory bonds are not lodged on time, if the work programme is not performed, or if safety/environmental duties are breached, the licence can be cancelled—sometimes after a notice and cure period, sometimes more directly—ending the licence holder’s rights as of the cancellation date.
This guide explains how the system works, what typically triggers cancellation, and how to build a “cancellation-proof” compliance strategy (or how to challenge a cancellation decision when necessary).
2) Who is the competent authority today?
Türkiye’s petroleum licensing and supervision are carried out through MAPEG (Maden ve Petrol İşleri Genel Müdürlüğü), a public legal entity affiliated with the Ministry of Energy and Natural Resources. The Presidential Decree framework explicitly establishes MAPEG and lists among its duties granting investigation permits and exploration/production licences and conducting related transactions.
The Turkish Petroleum Law (Law No. 6491) consistently refers to the competent body as the “General Directorate” (Genel Müdürlük) and the Ministry—and it assigns decisive roles to both in licensing, supervision, and dispute resolution.
3) The legal framework you must build around
Your licence strategy and any cancellation defence should be anchored in two main instruments:
- Turkish Petroleum Law No. 6491 (Türk Petrol Kanunu) – defines petroleum rights, mapping/area rules, licence terms, application evaluation, guarantees, obligations, sanctions, and cancellation authority.
- Implementing Regulation of the Turkish Petroleum Law (Türk Petrol Kanunu Uygulama Yönetmeliği; Official Gazette dated 22 January 2014) – provides detailed procedure on applications, work programmes, bonds, publications, transfers, reporting, and operational rules.
In addition, if you end up disputing a cancellation decision, you operate within Administrative Jurisdiction Procedure Law No. 2577 (İYUK)—especially for interim relief (stay of execution). (LEXPERA)
4) What an exploration licence legally grants you
4.1 The “bundle of rights”
Under Law No. 6491, an exploration licence is issued to enable the holder to:
- perform exploration within the licence area,
- conduct investigation around the licence area,
- develop discovered petroleum areas and produce from those areas, and
- make a discovery application (keşif).
This is important because the legal right is defined broadly enough to cover typical exploration workflows (studies, drilling, testing, appraisal, and development steps) but still strictly tied to the mapped area and the licence terms.
4.2 Mapping and size rules (a frequent reason applications fail or become disputable)
The law sets a rigid mapping logic:
- Onshore and territorial waters: licensing is based on 1/50,000 scale map sections, with the largest area being one full 1/50,000 section and the smallest being one full 1/25,000 section (as long as it stays within the same 1/50,000 section).
- In the exclusive economic zone framework: a different degree-grid and map scale logic applies.
Practical insight: many disputes later framed as “unfair rejection” are, in reality, rooted in a flawed map composition (partial overlaps, inconsistent pafta composition, or boundaries that spill beyond permitted grids). The correct approach is to treat mapping as both a technical and legal deliverable.
5) Duration of an exploration licence and extension mechanics
5.1 Base term
- Onshore exploration licences: 5 years
- Offshore exploration licences: 8 years
5.2 Extensions (and why the work programme is everything)
If the licence holder performs the work programme, provides a new work and investment programme including at least one drilling, and provides the 2% bond (with different ratio for seas in the application rules), the licence can be extended:
- onshore up to 2 years, offshore up to 3 years, and potentially a further extension under similar conditions.
5.3 Absolute cap on total duration
Including extensions:
- onshore: total cannot exceed 9 years
- territorial waters: total cannot exceed 14 years
There are also limited additional time mechanisms:
- up to 2 years extra time for commercial evaluation of discovered areas at the end of the exploration term,
- up to 6 months extra time to complete a well or production tests if the operation would otherwise exceed the licence term.
5.4 Timing discipline: extension requests are not “late-stage paperwork”
The Implementing Regulation reflects a strict planning approach: if the licence holder requests an extension at least 60 days before expiry, the extension can be considered based on the completion status of prior work programmes and the submission of the new programme and corresponding bond.
For compliance practice, that “60 days” is a project-critical deadline: missing it can turn an extension possibility into a forced expiry or into an administrative refusal with little room to manoeuvre.
6) Application and evaluation: what the administration actually assesses
6.1 Statutory evaluation criteria
The law states that the administration evaluates:
- compliance of the application with legislation,
- applicant’s financial adequacy, and
- whether the committed work and investment programme is capable of meeting the law’s objectives faster than competing applications.
6.2 Competing applications and the 90-day confidentiality window
The system has a competition-like feature:
- For an open area, the first exploration licence application’s area is announced.
- Application content is kept confidential for 90 days.
- Applications filed during that window that fully cover the same land piece are evaluated together.
- Partial-overlap applications filed during the window, and applications filed after 90 days for the same area, are not taken into evaluation.
The law also extends this logic to areas that were previously rejected, relinquished, or cancelled—once the relevant decision is finalized and published in the Official Gazette.
6.3 Work programme submission mechanics (procedural traps)
The Implementing Regulation adds detail: where multiple applications cover the same area, work and investment programmes must be submitted in sealed envelopes by the end of the 90th day, and are kept confidential until opening with the applicant’s participation.
The Regulation also clarifies that evaluation looks beyond the paper plan—considering technical capability, human resources adequacy, sector experience, and credibility of the investment plan.
7) Bonds and guarantees: the most common “strict liability” cancellation trigger
In Turkish petroleum licensing, bonds are not optional and missing bond deadlines can cause cancellation even when the operator is technically capable.
7.1 Two core bond categories
The Implementing Regulation recognizes:
- Loss and damage bond (zarar ve ziyan teminatı) – designed to cover damage arising during petroleum operations, and
- Investment bond (yatırım teminatı) – tied to the annual work and investment programme.
The Regulation also requires bank guarantee letters in the required form and generally expects them to be indefinite (süresiz).
7.2 The 30-day bond deadline and automatic cancellation risk
The Regulation explicitly states that if the applicant fails to provide the required investment bond within 30 days, the licence is cancelled.
Additionally, the law says that bonds must be provided within 30 days after the licence grant or extension becomes final—otherwise the licence is cancelled.
Practical takeaway: This is one of the clearest cancellation mechanisms in the system: if bond delivery is missed, “substantial compliance” arguments become difficult. A robust compliance calendar and bank coordination are essential.
7.3 Work programme performance and bond forfeiture (and why “two years” matters)
The law provides that, except for force majeure, the bond is forfeited proportionally to the unperformed annual work programme; and if the work programme is not performed at all for two consecutive years, the bond is forfeited and the licence is cancelled.
The Implementing Regulation complements this with detailed return/forfeiture rules—linking bond return to actual realization rates and establishing a formal notification and accounting approach.
8) Operator obligations during the licence term (and how they relate to cancellation)
8.1 Address and resident representative obligations
The law requires rights claimants to provide a Turkish address; otherwise, they cannot receive an investigation permit or exploration/production licence. It also requires appointment of a resident representative within 30 days and treats notification to the registered representative as notification to the rights holder.
8.2 Reporting, record keeping, data submission, and disclosure timeline
Petroleum right holders must provide records, data, documents, and samples in the manner specified by the regulation; the law also regulates when certain exploration/production data becomes publicly accessible and how the General Directorate may market such data.
For operators, poor data governance is not merely an audit problem: it can undermine proof of work programme completion, a key factor in bond return and in resisting cancellation threats.
8.3 Environmental and safety duties: “dangerous acts” and restoration
The law prohibits the petroleum right holder from creating or allowing a “dangerous act” and imposes a duty to conduct operations in a way that does not endanger local life, nature, and the environment. It also requires restoration of the land after operations end.
These are not aspirational clauses. They are directly connected to administrative measures and cancellation triggers (see below).
9) Cancellation (iptal) vs expiry vs relinquishment: understand the different endings
An exploration licence can end in different ways:
- Expiry – term ends without extension.
- Relinquishment/abandonment (terk) – voluntary surrender (often partial, depending on legal conditions).
- Cancellation (iptal) – an administrative decision due to breach, non-performance, non-payment, or safety/environmental issues.
- Transition to production lease – where discovery leads to production licensing; remaining exploration area may continue for its term.
Investors should treat cancellation as the most disruptive outcome because it typically terminates rights as of the cancellation date and can trigger knock-on consequences in land access, contract obligations, and financing.
10) Main cancellation grounds under Law No. 6491 (and how the process works)
10.1 Failure to replenish the loss & damage bond used for remediation
If a dangerous act occurs, the General Directorate can stop operations and require preventive measures; it may repair and compensate damage at the right holder’s cost, using the bond first. If the bond is used, the holder must replenish it. If the bond is not replenished within a year, the exploration licence (or other petroleum right) is cancelled.
10.2 General non-compliance: notice + 90-day cure + (possible) additional 60 days
If the petroleum right holder fails to comply with the law, the regulation, or licence conditions, the administration issues a notice demanding compliance and warns that the right will be cancelled after 90 days if non-compliance continues. If the administration determines that an additional period is necessary for compliance at the end of 90 days, it can grant up to 60 more days; if compliance is still not achieved, the licence is cancelled.
This is the typical “procedural spine” of cancellation for compliance breaches: the defence strategy often centers on whether notice was lawful, whether the breach was correctly characterized, whether cure was achieved, and whether force majeure or administrative error existed.
10.3 Non-payment of the State share (royalty) triggers cancellation
The law provides that if the State share specified in the relevant article is not paid to the tax office two times consecutively within one year, or three times in total, the exploration or production licence is cancelled.
10.4 Specific misconduct scenarios: compensation to land users, prohibited zones, failure to notify threats
The law identifies several scenarios where the administration may:
- allow 90 days and then temporarily suspend operations (90–180 days), or
- directly cancel the petroleum right depending on the nature of the act.
These scenarios include:
- failure to pay landowner/possessor damages or lost profit,
- entry into prohibited areas where entry is restricted by law,
- failure to promptly notify the General Directorate and other right holders of conditions that threaten petroleum operations.
10.5 Work programme non-performance: the “two consecutive years” cancellation rule
As noted above, except for force majeure, if the committed work programme is not performed at all for two consecutive years, the bond is forfeited and the licence is cancelled.
For operators, this is where internal project governance matters most:
- you must document performance with evidence suitable for administrative review,
- you must proactively manage delays and force majeure notifications,
- and you must avoid “paper plans” that are unrealistic, because unrealistic plans increase the probability of non-performance and cancellation.
10.6 Who issues the cancellation decision—and what happens to rights?
The law states that cancellation decisions for investigation permits, exploration licences, and production leases are issued by the Minister, and the licence holder’s rights in that permit/licence end on the cancellation date.
11) Publication and notification rules: Official Gazette publication can function as service
The petroleum regime treats publication as legally significant.
- The law states that certain decisions (including grants, amendments, transfers, expiry, and other matters requiring announcement) are published in the Official Gazette, and such publication can be treated as notification in many cases (subject to specific notification requirements).
- The Implementing Regulation lists what is published and sets a general rule that these announcements are made within 15 days, and that the publication date is treated as the validity date of the right. It also allows electronic service and treats service to the resident representative as service to the right holder.
Practical risk: if you are monitoring a licence portfolio, do not rely solely on postal notifications. A robust legal compliance system tracks Official Gazette publications and the petroleum registry timeline.
12) How to challenge a cancellation decision: objections and litigation forum
12.1 Administrative objection path (within the petroleum regime)
The law provides that objections relating to disputes between applicants or right holders regarding rights granted under the law are resolved by the Ministry.
12.2 Litigation forum: Council of State as first instance for rights-affecting decisions
A particularly important feature of the Turkish Petroleum Law is its forum rule: decisions taken by the Ministry that affect rights arising from applications, investigation permits, exploration licences, and production leases can be challenged in Danıştay (Council of State) as the first-instance court.
This is crucial for strategy because it shapes:
- filing venue and timing,
- procedural expectations,
- and how quickly interim measures may be pursued.
12.3 Interim relief: stay of execution (yürütmenin durdurulması) under İYUK
If cancellation threatens immediate loss of rights, the key urgent remedy is a stay of execution request under İYUK Article 27. The statute provides that filing a case does not automatically suspend the act; stay of execution can be granted if (i) the act’s implementation would cause irreparable or impossible-to-compensate harm and (ii) the act is clearly unlawful, and these conditions must exist together. (LEXPERA)
In petroleum licensing disputes, irreparable harm is often straightforward (loss of the licence and the exploration asset). The real battle tends to be “clear unlawfulness”—which must be argued with:
- procedural defects (lack of proper notice, incorrect cure period handling, failure to evaluate force majeure submissions),
- substantive defects (incorrect assessment of work programme realization, mischaracterization of breach),
- and documentary proof (logs, invoices, field reports, drilling records, contractor documentation, correspondence).
13) Building a “cancellation-proof” compliance program (what sophisticated operators do)
Below is a compliance blueprint aligned with the most common cancellation triggers in Law No. 6491 and the Implementing Regulation:
A) Bond and banking discipline (non-negotiable)
- Maintain a bond calendar: issuance, delivery, renewal, and any changes.
- Secure “indefinite” guarantee letter formats consistent with regulatory expectations.
- Build internal controls so bond delivery is completed well before the 30-day deadline that can trigger cancellation.
B) Work programme realism and evidence
- Draft annual work programmes with implementable scope and credible budgets.
- Maintain a living evidence file: contractor invoices, geophysical survey data, drilling logs, permits, site diaries, and technical reports.
- Submit required information quickly if the administration requests additional documents to verify realization.
C) Deadline governance for extensions
- Track the “at least 60 days before expiry” extension request timeline.
- Prepare the extension package early: new drilling-inclusive programme + corresponding bond.
D) Safety, environment, and “dangerous act” prevention
- Implement strict HSE management to avoid “dangerous act” scenarios that can lead to suspension and cancellation.
- Create immediate notification templates for threats and incidents to comply with statutory reporting expectations.
E) Land user compensation and prohibited zones controls
- Ensure land access agreements, compensation payments, and documentation are complete—non-payment can trigger severe administrative outcomes.
- Implement a “restricted zones map” and permitting check to avoid unauthorized entry.
F) Official Gazette and registry monitoring
- Treat publication as legally meaningful; monitor decisions affecting your licences and competitor applications.
14) A defensive playbook when a cancellation notice arrives
When the administration issues a notice with a 90-day cure warning, your response should be structured like an evidence-driven legal brief:
- Confirm the notice is properly served (resident representative, electronic service, and Official Gazette publication rules).
- Identify the alleged breach precisely (bond, work programme, reporting, payments, safety/environment).
- Assemble documentary proof of compliance or partial compliance, including work programme realizations and payments.
- Submit a cure plan with measurable steps and dates; request the additional 60-day period where justified by operational realities.
- Preserve litigation readiness: if cancellation is issued, prepare the Danıştay case file and an İYUK 27 stay request (irreparable harm + clear unlawfulness). (LEXPERA)
Yanıt yok