Dragon Oil to expand Turkmenistan oil terminal

Dragon Oil PLC, which has just commissioned its 50,000 b/d oil terminal in Turkmenistan, is developing plans to double its capacity in 2010 when operations are expected to begin on Phase 2.

Uchenna Izundu
International Editor

LONDON, Mar. 15 -- Dragon Oil PLC, which has just commissioned its 50,000 b/d oil terminal in Turkmenistan, is developing plans to double its capacity in 2010 when operations are expected to begin on Phase 2. The terminal will deliver crude oil exports, via Iran, from the Cheleken Block contract area in the Caspian Sea.

During 2007-09, meanwhile, Dragon Oil plans to drill as many as 25 Cheleken Block development and appraisal wells in Dzheitun and Dzhygalybeg oil and gas fields, which currently supply the terminal. During 2006, gross production from the Cheleken contract area was 20,514 b/d. By yearend 2008, Dragon Oil aims to produce 40,000 b/d.

This year it will execute a three-rig development program using a jack up and two platform-based rigs at different times on the block.

The company has renewed its contract to deploy the Iran Khazar jack up for another 5 years, and it will drill a series of development wells this year from the LAM A platform in Lam field on the block.

Dragon Oil said it would start drilling in the second quarter, using both its platform-based CIS-1 drilling rig and Rig 40 drilling rig, which is being refurbished. "The workover program will continue throughout 2007, using the snubbing unit and the wireline units," it added.

Several undrilled structures identified from the 3D seismic study will be targeted by appraisal drilling in 2007, Dragon said. A full completion of 3D seismic data interpretation later this year will support a reevaluation of oil and gas reserves and the updating of the company's field development.

A jack up is drilling the first appraisal well on the LAM West structure. Later in the year, Dragon will drill an appraisal well in relatively undeveloped Zhdanov field as well.

The company said discussions are progressing with Turkmen authorities and other area operators to commercialize the 3.5 tcf of gas reserves on the block and associated gas that currently is flared.

Contact Uchenna Izundu at uchennai@pennwell.com.

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