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Dragon Oil continues investing in oil projects in Turkmenistan

22 November 2013 13:27 (UTC+04:00)
Dragon Oil continues investing in oil projects in Turkmenistan

By Aynur Jafarova

Dragon Oil, an oil and gas company (United Arab Emirates, Great Britain), which conducts its main work in the Turkmen section of the Caspian Sea, will continue to invest in the oil project in Turkmenistan.

The news was announced by Dragon Oil CEO Abdul Jaleel Al Khalifa at the Turkmenistan Oil and Gas exhibition and conference (OGT-2013) on November 21.

"The main asset of the company is concentrated in the Cheleken area in the Turkmen shelf of the Caspian Sea, where development has been ongoing since 2000 under a production sharing agreement (PSA). Some $2.8 billion has been invested," he said.

According to him, an impressive gross production growth has been observed in Turkmenistan since the commencement of the PSA.

Al Khalifa also said that the production target of 13,000 tons per day (100,000 barrels) is possible by 2015, and production can be kept at this level for at least five years thereafter.

Dragon Oil has operated in Turkmenistan since 1999 under a production sharing agreement (PSA). The company has been registered on the London and Dublin stock exchanges.

Under the PSA, Dragon Oil Ltd (Turkmenistan) was granted a production license as the operator for the exploration and development of oil and gas resources in the Cheleken Contract Area for 25 years from May 1, 2000, and an exclusive right to negotiate an extension of not less than 10 years.

Dragon Oil Ltd is a 100-percent subsidiary of Dragon Oil plc. It conducts its activity mainly in the Eastern sector of the Southern Caspian Basin in the contract area of Cheleken.

The Cheleken Contract Area covers approximately 950 square kilometers and comprises two offshore oil and gas fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov), in water depths of between eight and 42 meters.

In 2011, the company said it planned to invest up to $600-700 million in the next three years to develop the oil infrastructure of the Cheleken project. The company has a medium-term development program, which targets production of 100,000 barrels of oil per day to be achieved in 2015 and then maintained for at least five years.

Dragon Oil has invested more than $2.7 billion in expanding oil production in the Cheleken Contract Area. Until 2015, the company intends to attract over $1 billion for the development of projects.

The company is one of the largest foreign investors in Turkmenistan.

Speaking at the event, RWE Dea AG Exploration Manager in Turkmenistan Torsten Scholz said that some 17 prospective sites and structures were discovered at block 23 in the Turkmen sector of the Caspian Sea.

"Some 17 prospective sites and prospective structures have been discovered at the block. The first 3D seismic exploration was held in the transition zone of Turkmenistan, and seismic data processing was carried out," he said.

"Drilling at the first site (multiple complexes) will be carried out from the shore in 2014-2015," Scholz said.

In July 2013, Ashgabat hosted a presentation of RWE Dea, which has been working at the block 23 since 2009. The initial stages of the works and the database, seismic surveys, seismic data processing, and interpretation of seismic data were discussed at the presentation.

The company completed the 3D seismic survey, which was carried out in this sector of the Caspian Sea for the first time and covered about 400 square kilometers, in 2012. The license provides exploration for six years in line with the PSA.

Resource estimates are not known yet. Upon discovery of hydrocarbon reserves, a license will be issued for their commercial production for 25 years.

An exploratory well will be drilled in accordance with the results of seismological exploration.

Turkmenistan, which is rich with hydrocarbon reserves, is one of the key players of the energy market in the resource-rich Caspian region. The Central Asian state has the world's fourth largest natural gas reserves after Russia, Iran and Qatar. It produces about 70-80 billion cubic meters of gas a year.

OGT-2013, a three-day international exhibition and conference which was organized by Turkmen Oil and Gas Ministry and the Chamber of Commerce with the participation of British Summit Trade Events Ltd. was opened in Ashgabat on November 19.

The main theme of the conference was 'International cooperation in the oil and gas industry of Turkmenistan: the potential, achievements and priorities'.

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