SC «Turkmennebit» and «Dragon Oil (Turkmenistan) Ltd.» extended the Production Sharing Agreement until 2035
01 July 2022
Yesterday, June 30, in the Central building of the oil and gas complex of Turkmenistan, a contract was signed between the State Concern «Turkmennebit» and the company «Dragon Oil (Turkmenistan) Ltd.» on the extension of the Production Sharing Agreement until May 1, 2035.
Earlier with «Dragon Oil (Turkmenistan) Ltd.» on May 1, 2000, a Production Sharing Agreement was signed for 25 years, which expires on May 1, 2025.
As Dragon Oil CEO Ali Al Jarwan noted at the signing ceremony, under the new Agreement, the company intends to invest heavily between 2025 and 2035, which will contribute to a significant increase in the production of additional crude oil.
In turn, the chairman of the State Concern «Turkmennebit» Guvanch Agadzhanov noted that among the main tasks identified by the President of Turkmenistan Serdar Berdimuhamedov is an increase in the volume of production and processing of oil and gas, as well as the export of Turkmen energy resources and finished oil and gas chemical products.
In order to fulfill the tasks set by the head of state, the State Concern, on the basis of the Production Sharing Agreement, intends to accelerate the development of the Turkmen shelf of the Caspian Sea in the next 10 years, in particular, at the field of the contractual territory Cheleken.
Today, the main activity of Dragon Oil under this PSA is the development of the Jeytun and Jigalybeg oil fields, where it has been operating since May 2000. During this period, the company has invested more than 8 billion US dollars in the project.
Thanks to the “open door” policy, the necessary economic and legal conditions have been created in Turkmenistan to ensure a favorable investment climate for foreign business. Foreign partners receive substantial support in the form of tax, customs, visa, insurance and other benefits.
In turn, the interests of foreign investors are conditioned by the presence of huge natural resources, export and transit opportunities of our country, its intensive industrialization and developing market. As a result, the share of foreign investments in the economy of Turkmenistan is steadily growing from year to year.
A successful example of a mutually beneficial partnership is the long-term experience of cooperation between Turkmenistan and Dragon oil (Turkmenistan) Ltd. (UAE), headquartered in Dubai.
The company has been operating in the Turkmen part of the Caspian Sea for more than 20 years. Having received the appropriate license in 2000, the company began to produce hydrocarbons on the terms of the PSA in the Cheleken contract area. During this time, a large amount of work has been carried out to modernize and develop the infrastructure of the Jeytun and Jigalybeg oil and gas fields.
In particular, 5 new operating offshore fixed platforms, 3 hub platforms and 2 residential blocks were reconstructed and built here. Dozens of new wells were put into operation. Jack-up rigs «ELIMA», «NEPTUNE» and «Caspian Driller», as well as rigs «SAKSON» and «NIS» mounted on fixed offshore platforms are involved in drilling operations.
In addition, an integrated oil preparation and pumping shop, 14 raw material storage tanks with a total capacity of about 1.8 million barrels, mechanical workshops for the repair of automobile, tractor, lifting equipment and oil equipment, a seawater desalination station and other facilities have been built.
Due to the construction of additional oil storage facilities and pipelines at the Alaja oil loading station, it became possible to simultaneously load two tankers, which increased the company's export capabilities.
In general, all this made it possible to significantly accelerate the development of fields, increase the average daily hydrocarbon production by more than 10 times – from 7,000 barrels to 80,000 barrels per day. This was achieved, among other things, thanks to 17 wells drilled, 5 at the Jigalybeg field and 12 at the Jeytun field. A major overhaul of 6 wells was also carried out. Three more wells are currently being drilled.
The Board of Directors of the company has set a goal to ensure a stable level of oil production in Turkmenistan at the level of 100,000 barrels per day by 2025.
One of the key objectives of Dragon Oil is to conduct business from the position of a socially responsible partner. Now more than 2,200 people work at its facilities, of which over 90 percent are citizens of Turkmenistan. The company purposefully invests in training and advanced training programs for local personnel, opening up new horizons for professional growth, obtaining modern knowledge and experience for Turkmen specialists.
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