Can Foreigners Explore for and Produce Oil and Gas in Turkey? 2026 — Turkish Petroleum Law No. 6491, Art. 22(5), Exploration and Production Licences, State Share, Ministry’s Prior Permission for a Change of Control (Art. 21(9)), Presidential Permission Beyond Territorial Waters, Exports and Profit Transfer, EPDK Licences in the Petroleum and Natural Gas Markets

Turkish version (Türkçe sürüm): Yabancılar Türkiye’de Petrol ve Doğal Gaz Arayabilir mi, Üretebilir mi?

A foreign company can explore for and produce oil and natural gas in Turkey. The Turkish Petroleum Law No. 6491 provides that research permits, exploration licences and production licences are granted to capital companies or to private-law legal persons that qualify as capital companies under the law of a foreign state; the Law contains no nationality restriction aimed at foreign companies. On the other hand, petroleum resources are under the authority and at the disposal of the State, every petroleum operation requires a permit or licence, one-eighth of the petroleum produced is paid as the State share, every share transfer that may lead to a change of control in the capital of a petroleum right holder is subject to the Ministry’s prior permission, and in the seas beyond the territorial waters the grant, transfer and extension of rights require the President’s permission. Without distinguishing between domestic and foreign holders, the Law also gives petroleum right holders guarantees such as tax-exempt transfers abroad, the right to keep export proceeds abroad, export rights at set percentages and a customs exemption. Market activities such as refining, fuel distribution and the import, wholesale and distribution of natural gas are subject to a licence from the Energy Market Regulatory Authority (EPDK) under Laws No. 5015 and No. 4646; there is no nationality restriction on foreign shareholding in these fields either, but in the natural gas market share acquisitions reaching certain thresholds require the approval of the EPDK Board. This guide answers the question “can foreigners explore for oil in Turkey?” with reference to the statutory provisions, under these headings: eligibility to hold petroleum rights, licence types and terms, offshore exploration, the State share and tax, exports and profit transfer, transfer of petroleum rights and change of control, foreign personnel, EPDK licences in the petroleum and natural gas markets, and cancellation and dispute resolution.

Who can hold petroleum rights in Turkey?

Oil and natural gas exploration and production in Turkey are governed by the Turkish Petroleum Law No. 6491, adopted on 30 May 2013 and published in the Official Gazette of 11 June 2013, No. 28674. For the purposes of the Law, “petroleum” means crude oil and natural gas (Art. 2). The purpose of the Law is to ensure that Turkey’s petroleum resources are explored, developed and produced rapidly, continuously and effectively in line with the national interest (Art. 1(1)). Petroleum resources in Turkey are under the authority and at the disposal of the State (Art. 3), and under the Law no petroleum operation may be carried out without a research permit, exploration licence or production licence (Art. 22(1)). The Law repealed the Petroleum Law No. 6326 of 1954 (Art. 27(2)). The Turkish Petroleum Law No. 5574, which is sometimes cited online, was adopted on 17 January 2007 but was sent back to the Grand National Assembly of Turkey by the President on 6 February 2007 for certain of its articles to be debated again, and it never entered into force; the law applied today is Law No. 6491.

The general rule for foreign investors is in the Foreign Direct Investment Law No. 4875: unless international agreements or special laws provide otherwise, foreign investors are free to invest and are subject to equal treatment with domestic investors (Art. 3(a)). Law No. 6491 likewise contains no provision restricting this equality in the petroleum field. Under Article 22(5) of the Law, research permits, exploration licences and production licences are granted, provided that the principles of the Law are complied with, to capital companies or to private-law legal persons that qualify as capital companies under the law of a foreign state. The Law contains no provision prohibiting foreign companies from holding petroleum rights or subjecting them to a percentage limit. Since the provision names only capital companies, the conclusion is that natural persons and partnership-type companies cannot obtain these rights.

Private-law legal persons that will hold petroleum rights are subject to the Turkish Commercial Code No. 6102; legal persons that will hold petroleum rights in Turkey and qualify as capital companies under the law of a foreign state are deemed resident in Turkey, with respect to their activities in Turkey, under the legislation on the protection of the value of the Turkish currency (Art. 22(10)). Applicants for rights must give an address in Turkey; no permit or licence is granted to those who do not (Art. 18(1)). Within thirty days of obtaining the permit or licence, the right holder must notify the General Directorate of a representative or joint representative resident in Turkey and of their places of residence (Art. 18(2)).

The Law does not require a foreign company to set up a separate company in Turkey; rights may also be granted directly to a capital company established under foreign law. However, under the Turkish Petroleum Law Implementing Regulation published in the Official Gazette of 22 January 2014, No. 28890, if the applicant is a foreign company it must submit information and documents showing its registration in Turkey within sixty days after becoming a petroleum right holder (Art. 6(2)). In the provision it added to the Natural Gas Market Law No. 4646 through Law No. 6491, the legislature also referred, alongside domestic and foreign petroleum right holder companies producing natural gas, to “the branches in Turkey of foreign companies” (Law No. 6491, Art. 27(4)). For registration and branch options, see our guide Can a Foreign Company Open a Branch in Turkey?

Applications are assessed on their compliance with the legislation, the applicant’s financial adequacy and the extent to which the committed work and investment programme will achieve the purpose of the Law in a shorter time than other applications (Art. 7(1)). The Regulation elaborates on these criteria: the company’s financial strength, technical capacity, human resources, experience in the sector and any success in other sectors are assessed (Art. 9(3)); for financial adequacy the company’s equity is examined first, and where equity is insufficient additional financial resources must be shown (Art. 9(5)). The competent authority is the General Directorate of Mining and Petroleum Affairs (MAPEG; “the General Directorate” in the Law), which is attached to the Ministry of Energy and Natural Resources (“the Ministry”). The definitions article of the Law still refers to the “General Directorate of Petroleum Affairs”; however, Article 118 of Decree-Law No. 703 abolished the General Directorate of Mining Affairs and the General Directorate of Petroleum Affairs in 2018 and established MAPEG with the duties and powers of both; applications, transfers, share transfers, extensions and register entries relating to petroleum rights are handled by MAPEG (Presidential Decree No. 4 on the Organisation of Institutions Affiliated, Related and Associated with Ministries and Other Institutions, Arts. 766, 768 and 772/G). Petroleum is outside the scope of the Mining Law; for mining licences, see our guide Can a Foreign Company Get a Mining License in Turkey?

Research permit, exploration licence and production licence

The Law provides for three types of petroleum right: the research permit (araştırma izni), the exploration licence (arama ruhsatı) and the production licence (işletme ruhsatı) (Art. 2). A research permit is granted to carry out research in a defined area; where the General Directorate finds an application appropriate, it grants the permit within sixty days, and the permit holder pays a one-off fee per hectare (Art. 5). An exploration licence is granted to explore within the licence area, carry out research around it, develop petroleum-bearing areas found and produce from them, and file a discovery application (Art. 6(1)).

Onshore and in the seas within the territorial waters, exploration licences are granted on the basis of 1:50,000-scale map sheets; the largest licence area is one full 1:50,000 sheet and the smallest is one full 1:25,000 sheet lying within the same 1:50,000 sheet (Art. 6(2)). Within the exclusive economic zone, licensing is based on one-degree areas between full lines of latitude and longitude (Art. 6(3)). An exploration licence runs for five years onshore and eight years offshore (Art. 6(5)). Provided that a licence holder that has fulfilled its work programme submits a work and investment programme including at least one well and the corresponding guarantee, the licence term may be extended by up to two years onshore and three years offshore (Art. 6(6)); the Law also allows a second extension under certain conditions (Art. 6(7)). However, including extensions, the term of an exploration licence may not exceed nine years onshore and fourteen years in the seas within the territorial waters; in areas where a petroleum discovery is made at the end of the exploration licence term, an additional period of up to two years may be granted so that the commercial evaluation of the discovery can be carried out (Art. 6(8)).

Applications for an exploration licence are made to the General Directorate in accordance with the regulation; the area covered by the first application for a site open to petroleum exploration is announced, and the content of the first and subsequent applications is kept confidential for sixty days from the date of the announcement (Art. 7(2)). The applicant provides a guarantee of 2% of the investment required for the work programme submitted with its licence application or extension request; offshore, the rate is 1% (Art. 7(3)). If the guarantee is not provided within thirty days of the relevant decision becoming final, the licence is cancelled (Art. 7(4)). The General Directorate may also close to applications areas it designates that are open to exploration, and put them up for auction; the auction conditions are set out in advance in the specifications (Art. 6(11)).

If a discovery is made in the course of exploration, a production licence is granted; the production licence contains the conditions that applied on the date the exploration licence was granted (Art. 8(1)). Taking into account the work and financial investment programme to be obtained under the regulation, the production licence is granted for twenty years from its entry into force, at the applicant’s request; save for force majeure, production must start in accordance with the programme, and the term may be extended twice, by up to ten years each time, if the production programme attached to the extension request is found appropriate (Art. 8(3)). Separately, a guarantee must be provided before a petroleum right is obtained to cover any damage and loss that may arise during petroleum operations (Art. 22(8)). Before a permit is given for operations in military prohibited zones and security zones, the opinion of the relevant public institutions is obtained (Art. 4(3)); the rules on the distances of petroleum operations from borders, military prohibited zones, historic sites and settlements are set by regulation (Art. 22(11)).

Offshore exploration and cabotage

For the purposes of the Law, “Turkish territory” covers the land, internal waters and territorial waters of the Republic of Turkey and, beyond them, the continental shelf and exclusive economic zone areas whose limits are determined in accordance with international law (Art. 2). Turkish territory is divided into onshore and offshore regions, and the offshore regions are in turn divided into areas within and beyond the territorial waters. In the seas beyond the territorial waters, the grant, transfer and extension of research permits, exploration licences and production licences are subject to the President’s permission, on terms no less favourable than the rights set out in Articles 5, 6 and 8 of the Law; these areas may be closed to exploration and production, modified or reopened by Presidential decision (Art. 4(1)). These decisions may not infringe acquired rights (Art. 4(2)).

For offshore activities, the Cabotage Law No. 815 must also be taken into account. That Law reserves maritime trade and maritime professions in the territorial waters to Turkish citizens; however, under the sentence added by Law No. 6491, foreigners holding petroleum rights may also carry out petroleum exploration and production activities within Turkish territorial waters (Law No. 815, Art. 3). The Government may also permit vessels used in petroleum exploration and production activities to operate, temporarily and on condition that this confers no right (Law No. 815, Art. 4, as amended by Law No. 6491, Art. 27(1)). For the cabotage rules and Turkish-flag requirements, see our guide Can Foreigners Operate Ships in Turkey? Offshore activities are also subject to special rules on a lower investment guarantee rate (Art. 7(3)) and a higher export percentage (Art. 22(12)).

State share, tax and customs exemptions

An explorer or producer must pay one-eighth of the petroleum it produces as the State share (Art. 9(1)). The term used by the Law is “State share” (Devlet hissesi); it should not be confused with the “State right” (devlet hakkı) payable on mining licences. No State share is charged on petroleum used in petroleum operations (Art. 9(2)). The State share is calculated, for crude oil, on the market price of domestic crude oil regulated in Article 10 of the Petroleum Market Law No. 5015 and, for natural gas, on the sale price to distribution companies or eligible consumers (Art. 9(6)). The State share is declared to the General Directorate and accrued by the evening of the twentieth day of the month following the month of production, and paid by the end of that month to the tax office with which the right holder is registered for income or corporate tax (Art. 9(7)).

Where the State share is not declared or is under-declared, an assessment is made on the differences found, and the State share so assessed is collected with a 100% surcharge; if the under-declared amount is declared voluntarily within two months of the date on which it should have been declared, it is assessed with a 50% surcharge. Interest at the rate of the late-payment surcharge calculated under Article 51 of Law No. 6183 is applied to a State share not declared on time, and an amount not paid on time is pursued and collected by the tax offices under Law No. 6183 (Art. 9(7)). At the Ministry’s request, the State share may also be paid in kind (Art. 9(9)). If it is established that the State share has not been paid twice in a row, or three times in total, within one year, the exploration or production licence is cancelled (Art. 24(4)).

Article 12 of the Law sets special tax rules. The total of the taxes that petroleum right holders must pay on their net profits and the income tax they must withhold on behalf of their shareholders may not exceed 55% (Art. 12(1)). Payments of self-employment income made under the Law to non-resident corporations for petroleum exploration activities are subject to 5% withholding under Article 30(1)(b) of the Corporate Tax Law No. 5520 (Art. 12(2)). Petroleum activities are kept in separate accounts, and right holders are taxed separately even if they have formed a partnership among themselves (Art. 12(3)). Excluding the State share, the income that a petroleum right holder will derive from production against its capital corresponding to the investments it made for petroleum operations is treated as an amortisation allowance under the Tax Procedure Law No. 213 until the capital is recovered at the current exchange rate, for foreign corporations taxed on a non-resident basis, and until the investment cost has been expensed through depreciation, for domestic corporations taxed on a resident basis (Art. 12(5)). For the general rules on distributing dividends to a foreign shareholder, see our guide Dividend Repatriation from Turkey for Foreign Shareholders.

The import or domestic receipt by a petroleum right holder of materials, equipment, fuel and land, sea and air vehicles approved by the General Directorate for use in petroleum operations is exempt from customs duty, the transactions carried out are exempt from fees, and the documents issued are exempt from stamp duty; materials used for administrative activities and for the construction and operation of buildings and facilities fall outside this exemption. However, the President may determine which items with comparable domestic production in Turkey, in quality and quantity, are to be subject to customs duty and other import taxes and charges (Art. 13(1)). If these materials are transferred with the General Directorate’s permission to another petroleum right holder, the exemption continues; if they are transferred for use outside petroleum operations, the taxes are charged (Art. 13(3)). The Law also exempted from stamp duty the contracts drawn up by petroleum right holders in connection with their petroleum exploration and production activities (Stamp Duty Law No. 488, Table (2), item IV/42; added by Law No. 6491, Art. 27(3)). Incentives for investments by petroleum right holders are determined by the President (Art. 26(1)). For the general framework of taxes in energy and mining, see our guide Enerji ve Madencilikte Vergilendirme (in Turkish).

Sale of petroleum, export rights and profit transfer

In petroleum fields they discovered after 1 January 1980, petroleum right holders have the right to export, as crude or as products, 35% of the total crude oil and natural gas they produce in onshore fields and 45% of that produced in offshore fields; the remainder, together with all crude oil and natural gas produced from fields discovered before 1 January 1980 and the petroleum products derived from them, is reserved for the needs of the country (Art. 22(12)). By its decision of 3 July 2014, published in the Official Gazette of 21 May 2015, the Constitutional Court annulled the last sentence, which authorised the Council of Ministers to redetermine these percentages and to regulate the procedures and principles for applying them (E.2013/96, K.2014/118); the percentages apply as written in the Law.

Different rules apply to domestic sales of crude oil and natural gas. Refiners buy domestic crude oil, when producers offer it, at the minimum prices formed under Article 10 of Law No. 5015. Domestic and foreign petroleum right holder companies producing natural gas, and the branches in Turkey of foreign companies, are granted a wholesale licence, without a storage requirement, to market and export the natural gas they produce to wholesale companies, exporting companies, distribution companies or eligible consumers (Law No. 4646, Art. 4(4)(b); added by Law No. 6491, Art. 27(4)). The Law thus expressly accepts that a wholesale licence may also be granted to the branches in Turkey of foreign companies producing natural gas.

Without distinguishing between domestic and foreign holders, the Law gives the petroleum right holder freedom of transfer. A petroleum right holder may, on application to the General Directorate, transfer abroad, in cash or in kind and free of tax, its cash funds and the related rights and other economic assets included in its capital base, excluding the amount needed to pay any taxes, duties, fees and State share that are due but not yet paid (Art. 14(1)). It may request a transfer against its capital at any time; once the transfer of its capital is complete, it may transfer its transferable net assets at the end of each three-month period in the current year (Art. 14(2)). A petroleum right holder may keep abroad the foreign currency earned from the petroleum it exports; that amount is offset against the transfer of the capital brought into Turkey and of the net assets exceeding it (Art. 14(3)). Law No. 4875 also provides that net profits, dividends, sale, liquidation and compensation proceeds arising from a foreign investor’s activities in Turkey may be freely transferred abroad through banks or special finance institutions (Art. 3(c)).

Transfer of petroleum rights and change of control

Apart from a new licence application or an auction, a foreign investor can enter an existing field in two main ways: by acquiring the petroleum right or a right over it, or by buying shares in the company holding the petroleum right. For a transfer of a right to have effect against the General Directorate and third parties, it must be accepted by the General Directorate and entered in the petroleum register; a share transfer that may lead to a change of control requires the Ministry’s prior permission. The transfer of exploration licences, production licences and the petroleum rights arising from them, or of rights over them, is entered in the petroleum register (Art. 21(1)(ç)); requests for acceptance and registration are decided within sixty days (Art. 21(2)). Except for attachments and interim injunctions, these transactions have no effect against the General Directorate or third parties unless they are accepted by the General Directorate and entered in the petroleum register (Art. 21(7)). Licences and the rights arising from them may be the subject of sale, pledge and similar contracts that can be concluded over immovable property (Art. 21(5)). The General Directorate may refuse a requested transfer or encumbrance in favour of persons whose financial and technical strength and experience it considers insufficient (Implementing Regulation, Art. 21(2)).

For a share purchase, the decisive provision is Article 21(9) of the Law: all share transfers that may lead to a change of control in the capital of a petroleum right holder registered by the General Directorate are subject to the Ministry’s prior permission. Neither the Law nor the Regulation sets a percentage threshold for “control”; for minority acquisitions, too, whether the transaction may lead to a change of control should therefore be assessed together with any privileged shares, board appointment rights and the shareholders’ agreement. The Law and the Regulation also do not expressly say whether indirect changes of control at parent-company level fall within this rule; in a restructuring of a foreign group, whether prior permission is needed should be assessed before the transaction. Under the Regulation, the parties to the share transfer apply to the General Directorate at the same time, stating their reasons; the General Directorate adds its own opinion and submits the request for the Minister’s approval; and after prior permission is obtained, the transfer is carried out within sixty days and the necessary documents are sent to the General Directorate (Art. 13(3)).

In the seas beyond the territorial waters, the transfer of licences is also subject to the President’s permission (Art. 4(1)). Depending on the size of the transaction, Competition Board approval may also be required, and, if the target company holds an EPDK licence, EPDK approval or notification; for planning these approvals together, see our guide Buying a Turkish Company as a Foreign Investor: Which Approvals Do You Need? Fields whose production term has expired may be put up for auction with the Minister’s approval; however, before the auction the Ministry asks the Turkish Petroleum Corporation (TPAO) whether it wants the field, and if TPAO requests it the field is not put up for auction (Art. 8(4)). Petroleum right holders whose production licence has been cancelled as an administrative sanction cannot become right holders again in the same production licence (Art. 8(4)).

Employing foreign personnel

A petroleum right holder may employ the foreign personnel needed for petroleum operations for up to six months without a work permit, on the basis of a work-purpose residence permit issued by the Ministry of the Interior on the favourable opinion of the Ministry of Energy and Natural Resources, provided that the foreigner and the employer fulfil their obligations under other laws; if the work lasts longer than six months, a work permit must be obtained (Art. 15(1)). The text of the Law refers to the Law No. 4817 on Work Permits for Foreigners; however, that Law was repealed by the International Labour Force Law No. 6735, which provides that references to Law No. 4817 are deemed to be made to Law No. 6735 (Law No. 6735, Art. 26(1)). Additional Article 1 of the Implementing Regulation, added in 2017, also regulates the six-month exemption by reference to Law No. 6735 and requires the duration of work, the contractor agreement, the place of work, passport details and professional qualification documents to be submitted with the application to the General Directorate.

For work exceeding six months, the general rules apply and the employer’s obligations under Law No. 6735 come into play; on this, see our guide Yabancı İşçi Çalıştırmada İşveren Yükümlülükleri (in Turkish). The resident representative of the petroleum right holder company must reside in Turkey and bear the company’s legal responsibility (Implementing Regulation, Art. 3, definition of “resident representative”; Law No. 6491, Art. 18(2)).

Petroleum market: refining, storage and fuel distribution

Petroleum market activities such as refining, processing, storage, transmission, distribution, transport and dealership fall within the Petroleum Market Law No. 5015 of 4 December 2003 and require a licence from the Energy Market Regulatory Authority (EPDK). A licence must be obtained for refining, processing, lubricant production, storage, transmission, eligible-user and bunkering activities relating to petroleum, and for fuel distribution, transport and dealership activities (Law No. 5015, Art. 3). Private-law legal persons engaging in licensed activities are subject to the Turkish Commercial Code; private-law legal persons engaging in market activities in Turkey that qualify as capital companies under the law of a foreign state are deemed resident in Turkey, with respect to their activities in Turkey, under the legislation on the protection of the value of the Turkish currency (Law No. 5015, Art. 3). The Law sets no nationality or percentage limit on foreign shareholding.

Under the Petroleum Market Licence Regulation, natural or legal persons that are resident in Turkey, registered in the trade or industry registry and liable to income or corporate tax may apply for a licence (Art. 7(3)). Under the text of the Regulation as amended on 1 November 2024, for refinery, transmission, storage, processing, distributor and bunkering-delivery licences the applicant legal person must be a joint-stock company or limited liability company under the Turkish Commercial Code No. 6102 and must have the minimum paid-in capital set by Board decision (Art. 7(7)(a)). For these licences, a foreign investor therefore needs to set up a joint-stock or limited liability company in Turkey or buy such a company. A distributor licence also requires an annual sales target of at least 60,000 tonnes of white products (petrol and diesel) in the marketing projection (Art. 7(7)(c)), and the distributor must establish a dealer network of at least fifty stations within one year (Art. 34/A). Licence holders must provide and maintain the minimum paid-in capital set by Board decision; otherwise the licence is terminated (Arts. 5 and 17(1)(e)).

Other rules important for a foreign investor are as follows. Licences cannot be transferred in any way; the only exception is the grant of the licence to another legal person at the request of lenders in project finance (Regulation, Art. 5). If there is a change in the ownership structure, the chair and members of the board of directors or the persons authorised to represent and bind a licence-holding company, EPDK must be notified no later than six months after the change takes place or is published in the Turkish Trade Registry Gazette (Regulation, Art. 18(5)); no provision requiring prior approval of share transfers in the petroleum market, like the one in the natural gas market, has been found. The end of the licence holder’s legal personality, including through mergers and acquisitions, terminates the licence (Regulation, Art. 17(1)(b)). Law No. 5015 prohibits the grant of a licence to persons with a final conviction for certain offences listed in Article 359 of the Tax Procedure Law in connection with breaches of the Anti-Smuggling Law No. 5607 or licensed activities. Nor is a licence granted to shareholders who held more than 10% of the shares of the licence-holding legal person on the date the offence was committed, to current or former chairs and members of its board of directors, or to the persons authorised to represent and bind it; these persons also cannot be direct shareholders of legal persons applying for a licence (Law No. 5015, Art. 3). The target company’s past shareholders and managers should therefore also be checked in acquisition due diligence.

There are also limits on market structure. A distributor’s domestic market share may not exceed 45% of the total domestic market; a distributor’s sales through the stations it operates itself may not exceed 15% of its total domestic market share (Law No. 5015, Art. 7). Petroleum stocks equal to at least ninety days of the net imports within the previous year’s average daily consumption must be held; these stocks are ensured through the obligation of refinery and fuel and LPG distributor licence holders to hold at least twenty times the average daily quantity of product they supply in their own depots or in licensed storage facilities. Twenty days of the total stocks of fuel and LPG distributors, excluding tank bottoms, are taken as minimum operating stocks and count towards the national petroleum stocks (Law No. 5015, Art. 16). For licence types and amendment obligations, see our guide Petrol Piyasasında Lisans Türleri (in Turkish), and for the LPG market our guide LPG (Otogaz) Piyasası ve İstasyonlar (in Turkish).

Natural gas market: import, wholesale and distribution

The import, transmission, storage, wholesale, export and city distribution of natural gas, compressed natural gas (CNG) activities and the liquefaction activity added in 2024 are subject to an EPDK licence under the Natural Gas Market Law No. 4646 (Art. 4). Under Law No. 4646, production is not considered a market activity; the exploration and production of natural gas remain subject to Law No. 6491. If private-law legal persons operating in the market are established as joint-stock or limited liability companies, all their shares must be registered shares (Law No. 4646, Art. 4; Natural Gas Market Licence Regulation, Art. 8). No limit on foreign shareholding or on the nationality of shareholders or managers has been found in the Law or the Regulation.

For a foreign investor, the most important rule in the natural gas market is the approval of share acquisitions. The direct or indirect acquisition by a natural or legal person of shares representing 10% (5% in publicly held companies) or more of the capital of a licence-holding legal person, and share transfers resulting in a shareholder’s stake exceeding or falling below these thresholds, are each time subject to the approval of the EPDK Board; the acquisition of voting rights and the pledging of shares are also subject to EPDK approval (Regulation, Art. 42). For storage licence holders, any change in shares covering 10% (5% in publicly held companies) or more of the capital is subject to approval even if no shareholder’s stake exceeds or falls below the thresholds. Under the text as amended on 24 December 2025, in calculating these percentages the shares held by a natural-person shareholder and his or her spouse and minor children, by companies in which they sit on the board of directors or supervisory board or are partners with unlimited liability, and, except for public legal persons, by companies in which 25% or more is held are deemed to belong to one person. The same amendment provides that if the share transfer is not completed within one year of the date of the Board’s permission, the permission becomes invalid and the transfer cannot proceed without a new permission, and that where a transfer completed after approval requires a licence amendment, an application for the licence amendment must be made within three months (Art. 42).

Imports are also tightly regulated. Importing companies must obtain a separate licence for each import connection; however, this requirement does not apply to spot LNG, spot pipeline gas and CNG imports (Law No. 4646, Art. 4(4)(a); provisional Art. 2). The annual quantity of natural gas imported by any single importer may not exceed 20% of the national consumption forecast for the current year determined by the Authority (Law No. 4646, Art. 4(4)(a)). Apart from production companies in Turkey, no legal person may sell more than 20% of the national consumption forecast; the Law also restricts market companies from holding interests in one another (Law No. 4646, Art. 7). Under provisional Article 2 of Law No. 4646, no importing company may conclude new gas purchase contracts with countries with which BOTAŞ has existing contracts until those contracts expire; connections for export purposes and cases where the Authority finds a domestic supply shortage are excepted. Liquefied natural gas (LNG) imports were excluded from these provisions by Law No. 5784 in 2008, and spot pipeline gas and CNG imports were added to the exception by Article 50 of Law No. 7103; the quantity of spot pipeline gas that may be imported in a calendar year is set by the Board after obtaining the Ministry’s opinion. Under Article 9/A, added to the Regulation by the 2025 amendment, the Ministry’s opinion is taken into account in import licence applications, and import contracts may not contain provisions that would make the State of the Republic of Turkey liable in legal disputes.

A city distribution licence is granted to the company that wins the tender opened by the Authority, for the licence term set by the Authority. A company granted a distribution licence must invite the municipality or municipal company in the city where it is authorised to become a shareholder in the distribution company at 10%, without requiring a capital contribution; this shareholding may be increased by up to a further 10% of the capital against payment (Law No. 4646, Art. 4(4)(g)). Licences cannot be transferred in any way (Regulation, Art. 5). For licensing and subscription rules in the natural gas market, see our guide Doğal Gaz Piyasası ve Abonelik (in Turkish), and for electricity and renewable energy investments our guide Can Foreign Investors Build Solar and Wind Power Plants in Turkey?

The three regimes compared

Which link of the oil and gas chain a foreign investor enters determines the applicable law, the competent authority and the approval regime for share transfers. The table below sets the three regimes side by side.

Cancellation, administrative fines and disputes

Law No. 6491 provides for the cancellation of a petroleum right for certain serious breaches. If the State share is not paid twice in a row, or three times in total, within one year, the exploration or production licence is cancelled (Art. 24(4)). Save for force majeure, if the committed work programme is not carried out at all for two consecutive years, the guarantee is forfeited and the licence is cancelled; forfeiture of the guarantee in proportion to the part of the work programme not carried out in a year is also provided for (Art. 24(6)). If production under a production licence does not start at all within one year, or production that has started stops, the General Directorate requires production to start within one hundred and eighty days; if production has not started by the end of that period and no acceptable justification is given, the producer is given a further one hundred and eighty days, and if production does not start by the end of that period the licence is cancelled (Art. 24(7)). Failure to complete the guarantee at the end of one year, or failure to remedy a breach of the Law despite a warning, may also lead to cancellation (Art. 24(2)-(3)). Cancellation decisions are made by the Minister (Art. 24(8)). Failure to provide the investment guarantee on time also leads to cancellation of the licence (Art. 7(4)).

Article 23 of the Law also provides for fixed-amount administrative fines; since these fines are increased each year by the revaluation rate under Article 17(7) of the Misdemeanours Law No. 5326, the amounts in force should be checked at the relevant date. An action against administrative fines imposed by the General Directorate may be brought before the administrative court within thirty days (Art. 23(4)). Objections concerning disputes between applicants or right holders over rights obtained or to be obtained under the Law are decided by the Ministry; actions against decisions taken by the Ministry that affect applications or rights arising from research permits, exploration licences and production licences are heard by the Council of State as the court of first instance (Art. 20(2)). The Law contains no provision on arbitration; a foreign investor’s rights under investment agreements to which Turkey is a party should be assessed separately (see our guide Investment Arbitration and ICSID).

In the petroleum and natural gas markets, EPDK’s powers to cancel licences and impose administrative fines are governed by Laws No. 5015 and No. 4646; for these procedures, see our guides Petrol Lisansı İptali and Doğal Gaz Lisansı İptali (in Turkish). For pasture and land use in petroleum activities, see our guide Maden, Petrol ve Jeotermal Faaliyetlerde Mera (in Turkish), and for the general framework of energy disputes our Enerji Hukuku Rehberi (in Turkish).

Checklist

Common mistakes

• Relying on a law that is not in force. The Turkish Petroleum Law No. 5574 never entered into force; Law No. 6491 applies to exploration and production.
• Assuming foreigners cannot hold petroleum rights. The Law provides that rights may also be granted to capital companies established under foreign law and sets no nationality restriction (Law No. 6491, Art. 22(5)).
• Applying as a natural person. Since the Law provides that petroleum rights are granted to capital companies or to legal persons that qualify as capital companies under foreign law, the conclusion is that natural persons and partnership-type companies cannot obtain rights (Art. 22(5)).
• Skipping prior permission on a share purchase. Every share transfer that may lead to a change of control requires the Ministry’s prior permission, and the Law sets no percentage threshold (Art. 21(9)).
• Not registering the transfer. A transfer of a petroleum right has no effect against the General Directorate or third parties unless accepted by the General Directorate and entered in the petroleum register (Art. 21(7)).
• Forgetting the President’s permission for fields beyond the territorial waters. In these fields the grant, transfer and extension of rights are subject to the President’s permission (Art. 4(1)).
• Confusing the State share with the mining “State right”. In petroleum, one-eighth of production is paid as the State share; the State right on mining licences is a separate regime (Art. 9(1)).
• Thinking an EPDK licence can be transferred. Petroleum and natural gas market licences cannot be transferred; the company is bought and the licence stays with the company (Petroleum Market Licence Regulation, Art. 5; Natural Gas Market Licence Regulation, Art. 5).
• Overlooking the 10% threshold in a gas company. Direct or indirect share acquisitions reaching the 10% (5% in publicly held companies) threshold, and stakes exceeding or falling below these thresholds, require Board approval, and the acquisition of voting rights and share pledges require EPDK approval (Natural Gas Market Licence Regulation, Art. 42).

Frequently asked questions

Can foreigners explore for and produce oil and gas in Turkey?

Yes. Research permits, exploration licences and production licences are granted to capital companies or to private-law legal persons that qualify as capital companies under the law of a foreign state (Turkish Petroleum Law No. 6491, Art. 22(5)). The Law contains no nationality or foreign-capital limit aimed at foreign companies.

Can a natural person obtain a petroleum licence?

Since Article 22(5) of the Law names only capital companies and private-law legal persons that qualify as capital companies under foreign law, the conclusion is that natural persons and partnership-type companies cannot obtain petroleum rights. The investment must be made through a capital company (a joint-stock company, a limited liability company or a partnership limited by shares) or through a legal person that qualifies as a capital company under foreign law.

Does a foreign company have to set up a separate company in Turkey?

Law No. 6491 does not require this; a capital company established under foreign law can also hold rights directly. However, the applicant must give an address in Turkey, notify a representative resident in Turkey within thirty days of obtaining a right (Art. 18) and submit documents showing its registration in Turkey within sixty days after becoming a petroleum right holder (Implementing Regulation, Art. 6(2)).

How long does an exploration licence last?

An exploration licence runs for five years onshore and eight years offshore and, if the conditions are met, may be extended by up to two years onshore and three years offshore; the Law also allows a second extension under certain conditions. Including extensions, the term may not exceed nine years onshore and fourteen years in the seas within the territorial waters; in areas where a discovery is made at the end of the exploration licence term, an additional period of up to two years may be granted for commercial evaluation (Law No. 6491, Art. 6(5)-(8)).

For how many years is a production licence granted?

Taking into account the work and financial investment programme, a production licence is granted for twenty years from its entry into force, at the applicant’s request, and may be extended twice, by up to ten years each time, if the production programme is found appropriate (Law No. 6491, Art. 8(3)).

How much is the State share and how is it paid?

An explorer or producer pays one-eighth of the petroleum it produces as the State share (Art. 9(1)). The State share is declared to the General Directorate by the evening of the twentieth day of the month following the month of production and paid to the relevant tax office by the end of that month; at the Ministry’s request it may also be paid in kind (Arts. 9(7) and 9(9)).

Is there a ceiling on the tax burden of petroleum companies?

Yes. The total of the taxes that petroleum right holders must pay on their net profits and the income tax they must withhold on behalf of their shareholders may not exceed 55% (Law No. 6491, Art. 12(1)). Payments of self-employment income to non-resident corporations for petroleum exploration activities are subject to 5% withholding (Art. 12(2)).

Can a foreign investor transfer its profits and capital abroad?

Yes. A petroleum right holder may transfer abroad, free of tax, its cash funds and other economic assets included in its capital, excluding the taxes, duties, fees and State share it owes; it may also keep abroad the foreign currency earned from the petroleum it exports (Law No. 6491, Art. 14).

How much of the petroleum produced can be exported?

In fields that petroleum right holders discovered after 1 January 1980, 35% of the crude oil and natural gas produced in onshore fields and 45% of that produced in offshore fields may be exported as crude or as products; the remainder is reserved for the needs of the country (Law No. 6491, Art. 22(12)).

Is permission needed to buy shares in a company holding a petroleum right?

Yes. Every share transfer that may lead to a change of control in the capital of a petroleum right holder registered by the General Directorate is subject to the Ministry’s prior permission (Law No. 6491, Art. 21(9)). The Law sets no percentage threshold; the parties apply jointly and the transfer is carried out within sixty days after the prior permission (Implementing Regulation, Art. 13(3)).

Can a petroleum licence be transferred to another company?

Yes; however, the transfer has no effect against the General Directorate or third parties unless it is accepted by the General Directorate and entered in the petroleum register (Art. 21(7)). The General Directorate may refuse a transfer to persons whose financial and technical strength is considered insufficient (Implementing Regulation, Art. 21(2)); for fields beyond the territorial waters, the transfer is subject to the President’s permission (Art. 4(1)).

Is separate permission needed to explore for oil offshore?

In the seas beyond the territorial waters, the grant, transfer and extension of research permits, exploration licences and production licences are subject to the President’s permission (Law No. 6491, Art. 4(1)). Within the territorial waters, the Cabotage Law No. 815 allows foreigners holding petroleum rights to carry out petroleum exploration and production activities (Law No. 815, Art. 3).

Can foreign personnel be employed without a work permit?

A petroleum right holder may employ the foreign personnel needed for petroleum operations for up to six months without a work permit, on the basis of a work-purpose residence permit issued on the Ministry’s favourable opinion, provided that the foreigner and the employer fulfil their obligations under other laws; for longer work, a work permit must be obtained under the International Labour Force Law No. 6735 (Law No. 6491, Art. 15(1); Implementing Regulation, additional Art. 1).

Can foreigners set up a refinery or a fuel distribution company?

Yes. The Petroleum Market Law No. 5015 sets no limit on foreign shareholding, but the activity requires an EPDK licence. Refinery, transmission, storage, processing, distributor and bunkering-delivery licences require a joint-stock or limited liability company under the Turkish Commercial Code and minimum paid-in capital; licences cannot be transferred (Petroleum Market Licence Regulation, Arts. 5 and 7).

Is EPDK approval needed to become a shareholder in a natural gas company?

The direct or indirect acquisition of shares representing 10% (5% in publicly held companies) or more of the capital of a licence-holding company, and share transfers that result in a shareholder’s stake exceeding or falling below these thresholds, are each time subject to the approval of the EPDK Board; the acquisition of voting rights and share pledges are also subject to EPDK approval (Natural Gas Market Licence Regulation, Art. 42).

When is a petroleum licence cancelled and where is an action brought?

The main grounds for cancellation are failure to pay the State share twice in a row, or three times in total, within one year, failure to carry out the work programme at all for two consecutive years, failure to start production despite the periods given, failure to provide the investment guarantee on time and failure to remedy a breach of the Law despite a warning (Law No. 6491, Arts. 7(4) and 24); under Article 24, cancellation decisions are made by the Minister (Art. 24(8)). Actions against Ministry decisions affecting these rights are heard by the Council of State as the court of first instance (Art. 20(2)).

Related guides

• Legal Guide for Foreign Investors in Turkey — company, stock exchange, mining, energy, real estate, tax and arbitration
• Can a Foreign Company Get a Mining License in Turkey? — the Mining Law and the State right
• Can Foreign Investors Build Solar and Wind Power Plants in Turkey? — YEKA, pre-licence and licence
• Buying a Turkish Company as a Foreign Investor: Which Approvals Do You Need? — Competition Board, EPDK and sector approvals
• Can a Foreign Company Open a Branch in Turkey? — registration, commercial representative and branch
• Dividend Repatriation from Turkey for Foreign Shareholders — dividends, withholding and residence certificates
• Can Foreigners Operate Ships in Turkey? — cabotage and the Turkish flag
• Investment Arbitration and ICSID — a foreign investor’s right to arbitrate
• Company Formation in Turkey for Foreigners — capital, documents and formation
• Petrol Piyasasında Lisans Türleri — licences under Law No. 5015 (in Turkish)
• Enerji Hukuku Rehberi — EPDK, licences and disputes (in Turkish)
• Yabancılar Türkiye’de Petrol ve Doğal Gaz Arayabilir mi, Üretebilir mi? — Turkish version of this article