(Bloomberg) – Turkey’s state energy company Turkiye Petrolleri AO plans to sell as much as $4 billion in Islamic debt as part of its push to expand oil and gas production, marking the firm’s first such international debt offering.
The company, also known by its Turkish initials TPAO, is preparing to issue the five-year sukuk to international investors by the end of the year, Energy Minister Alparslan Bayraktar told Bloomberg on Monday.
The debut sukuk follows non-deal roadshow meetings in London, Abu Dhabi and Dubai, where officials briefed potential investors on TPAO’s financial outlook and projects, including Black Sea natural gas production and the Gabar oil field in Turkey’s southeast, he said.
Owned by Turkey’s sovereign wealth fund, TPAO also has a growing portfolio of international projects including exploration plans in Libya, Oman and Pakistan alongside existing production in Azerbaijan, Iraq and Russia.
TPAO produced 33.7 MMbbl of oil and 2.2 Bcm of gas in Turkey in 2024, former CEO Ahmet Turkoglu told a parliamentary commission earlier this year. It also pumped 39.4 MMboe from international projects.
He said that the company made a profit of 15.4 billion liras last year — equivalent to around $390 million at the time of the comments.
Production is set to increase both at home and abroad. Turkey plans to increase output at the main Black Sea gas field, Sakarya, to 45 MMcm/d in 2028 from the current 9.5 MMcm/d, Bayraktar said. TPAO is also planning to develop unconventional reserves in the southeast in partnership with U.S.-based Continental Resources, Inc. and TransAtlantic Petroleum Ltd.
TPAO established a subsidiary, TPAO Varlik Kiralama, earlier this month to manage the sukuk issuance.
The debt sale comes as Turkey’s borrowing costs decline due to an easing of political tensions at home, the government’s commitment to orthodox economics and improved sentiment toward emerging markets.
That has fueled wave of issuances from both the state and private sector and led Gulf banks in particular to expand their lending in the country.
