Mon 04-07-2022 23:26 PM
DUBAI, 4th July, 2022 (WAM) -- Dragon Oil, an exploration and production platform totally owned by the Government of Dubai, has renewed the partnership contract in Turkmenistan with the state-owned company, Turkmen Oil, until May 2025, for a period of ten additional years with a total value of US$1 billion.
US$500 million will be paid in cash, while the remaining US$500 million will be paid over the next 13 years, which 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.
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.
Over a 22-year period, the company has spent US$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.
The company’s investments, during the contract extension period, are expected to reach another US$7-8 Billion to support expansion and development programmes, while 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.
Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority (DEWA) and Chairman of ENOC and Dragon Oil, expressed his delight at 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.
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 also highlighted 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.
For his part, Ali Al Jarwan, CEO of Dragon Oil, stated, "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.
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."
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.