DUBAI, 4th July, 2020 (WAM) — Dragon Oil Company – an exploration and production platform wholly owned by the Government of Dubai – has signed an agreement to renew the production partnership in Turkmenistan with the state-owned Turkmen Oil Company, which expires in May 2025, for an additional 10 years, with a value of A total of one billion dollars, of which 500 million dollars will be paid in cash, while the remaining 500 million dollars will be paid over 13 years, including the company’s commitment and support for the Turkmen government’s projects in projects, community development, education, public health and some benefits of joint production.
The signing ceremony of the agreement, which took place in the Turkmen capital Ashgabat, was attended by Engineer Ali Al-Jarwan, CEO of “Dragon Oil”.
The Cheleken complex, located in the East Caspian Sea in Turkmenistan, represents the main producing assets of Dragon Oil and consists of two major offshore oil and gas fields, Lam and Zhdanov, that have been successfully developed and maintained since 2000, in addition to another potential complex where the These fields lie about 10 to 40 kilometers 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 drilling wells and setting up the appropriate production facilities to allow for sustainable production, with a cumulative production of 437 million barrels of crude oil.
Since 2018, Dragon Oil has shifted production from natural depletion of conventional oil to subsidized production by water injection, artificial lift and, more recently, gas injection.
It is expected that the company’s investments during the contract extension period will reach between another 7 and 8 billion dollars to support expansion and development programs, while future production levels range between 60 and 70 thousand barrels per day, and the expected cumulative production of crude oil from this extension will reach 350 million barrels. Until 2035.
His Excellency Saeed Mohammed Al Tayer, Managing Director and CEO of Dubai Electricity and Water Authority, Chairman of the Board of Directors of ENOC and Dragon Oil Company, expressed his happiness at the announcement of the extension of the production partnership, which is in line with the directives of the wise leadership of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, “may God protect him”, affirmed the company’s strong commitment to strengthening its presence and firm presence in Turkmenistan, indicating that the company aspires to support the current expansion plans while continuing to work during the coming period to launch more From discovering sustainably in this promising market, creating long-term value for the benefit of all.
He added that the relations between the United Arab Emirates and the State of Turkmenistan are developing significantly and moving at a steady pace with the injection of new investments that contribute to the development and consolidation of relations between the two sides in various economic and investment fields.
He praised the depth of relations between the two countries, pointing to the investments made by Dragon Oil, which has worked for more than 20 years in the field of oil and gas exploration in the Caspian Sea to achieve mutual benefit through fruitful cooperation.
His Excellency explained that signing this contract also represents a milestone in Dragon Oil’s sustainable strategic growth journey 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 about 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.
For his part, Eng. Ali Al-Jarwan, CEO of Dragon Oil, welcomed the signing of the agreement to extend the production partnership, which represents a renewed commitment by Dragon Oil towards its feasible investments in the oil and gas sector in Turkmenistan.. Noting that the agreement will allow for more additional investments and complete plans Increasing the production capacity of the company and investing technology and creativity in supporting production and shifting to process excellence to support economic feasibility.
Al-Jarwan explained that Dragon Oil Company “Turkmenistan” Ltd. recently provided the operational concession to improve the performance of each sector, including drilling, maintenance and well intervention, and the integrated work teams will continue to contribute to raising the level of production for the benefit of the parent company Dragon Oil and the government of Turkmenistan.
Over the past decade, Dragon Oil has evolved from a single-origin oil company operating only in Turkmenistan to a global operator and an international exploration and production platform with production and exploration assets in Egypt, Iraq, Algeria and Afghanistan.