Friday 19 August 2022

The signing ceremony

Dragon Oil signs $1bn extension deal with Turkmenistan

DUBAI, July 4, 2022

Dragon Oil, Dubai government’s exploration and production firm, has renewed its contract with Turkmenistan’s Turkmen Oil for a further period of 10 years from May 2025. The total value of the contract is $1 billion of which $500 million will be paid in cash, while the remaining $500 million will be allocated over the next 13 years. 
This includes the company's commitment towards the support of the Turkmen government's projects, community development, education, public health and some benefits of the co-production.
Moreover, Dragon Oil’s investments, during the contract extension period, are expected to reach another $7-8 billion to support expansion and development programmes. 
Future production levels
Future production levels would range between 60-70 thousand barrels per day. The cumulative production of crude oil is expected to reach 350 million barrels until the year 2035.
The signing ceremony of the agreement was held in the Turkmen capital, Ashgabat, with the presence of Engineer Ali Al-Jarwan, CEO of Dragon Oil and a few members of the company's executives.
The Cheleken complex, located in the East Caspian Sea in Turkmenistan, is the main producing asset of Dragon Oil, and consists of two major offshore oil and gas fields, Lam and Zhdanov, which have been successfully developed and maintained since 2000, in addition to one more potential complex, which all located around 10-40 kilometres off the coast of the Chiliken Peninsula and at water depths of 10 to 30 metres.
Production facilities
Over the past 22-year period, Dragon Oil has spent $8.1 billion on wells drilling and setting up the appropriate production facilities to aid a sustainable production, with cumulative production of 437 million barrels of crude oil.
Since 2018, Dragon Oil has shifted production from natural depletion of conventional oil to production supported by water injection, artificial lifting and lately gas injection.
Saeed Mohammed Al Tayer, MD & CEO of Dubai Electricity and Water Authority (Dewa) and Chairman of Enoc and Dragon Oil, expressed his delightness with the announcement of the extension of the partnership contract, which confirms the company’s solid commitment to strengthening its presence in Turkmenistan, emphasising that the company aspires to support the current expansion plans while continuing to work during the forthcoming period to launch several sustainable explorations within this promising market, creating long-term benefit for all.
New investments
Al Tayer added that the relationship between the UAE and Turkmenistan is developing significantly and progressing at a steady pace with the increase of new investments that contribute to the development and consolidation of relationship between the two parties in various economic and investment fields.
He pointed out the depth of relationship between the two countries through the investments made by Dragon Oil, which has worked for nearly 20 years in the field of oil and gas exploration in the Caspian Sea, to achieve mutual benefit through fruitful cooperation.
Al-Jarwan said: "We welcome the signing of the contract extension agreement, which represents a constant commitment by Dragon Oil towards its profitable investments in the oil and gas sector in Turkmenistan," adding that the agreement will allow offering more investments and completion of plans to increase the production capacity of the company.
A milestone
Al-Jarwan continued: "The signing of this contract also marks a milestone in Dragon Oil's journey in a sustainable strategic growth and within the plan to complete growth and expansion in its operating markets, including Turkmenistan, Egypt and Iraq, by continuing to intensify exploration work, develop fields and repair wells, to increase production capacity to 300 thousand barrels per day by 2026 compared to around 160 thousand barrels per day at the present time, according to its strategies and ambitions, which requires the development of existing assets and the acquisition of new opportunities.”
Al-Jarwan pointed out that Dragon Oil (Turkmenistan) Ltd has recently provided the operational concession to improve the performance of each sector, including drilling, maintenance and well intervention.
The integrated work teams will continue to contribute to the maximisation of production for the benefit of both the Dragon Oil Company and the government of Turkmenistan.
Over the past decade, Dragon Oil has evolved from a single-origin oil and gas company operating in Turkmenistan only, to a global operator and an international exploration and production platform, with production and exploration assets in Egypt, Iraq, Algeria and Afghanistan. It follows a strategy that relies on innovation and the use of the latest technologies in order to diversify its portfolio in order to achieve sustainable development and make it more worthwhile for its shareholders.-- TradeArabia News Service


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