Turkmenistan details Caspian license round

Turkmenistan has offered 11 eastern Caspian Sea contract areas in a licensing round due to close Nov. 28.

The round was announced at the American Association of Petroleum Geologists International Conference and Exhibition Sept. 10 in Vienna (OGJ, Sept. 15, 1997, p. 34).

Tender presentations will be held in Vienna, London, Houston, and Ashgabat, Turkmenistan. The Houston presentation is scheduled to take place in October.

The first round began Sept. 1, and the deadline for submission of tender applications is Nov. 28. The Turkmen government expects to report the results of the first round by Jan. 1.

Sizes of the blocks, offered under Turkmenistan's Dec. 30, 1996, Petroleum Law, are 400-2,750 sq km.

Caspian potential

Turkmenistan's Caspian shelf occupies more than 70,000 sq km and is divided into two regions: the central Caspian and the southern Caspian.

The regions are separated by the Apsheron-Prebalkan high, which marks the tectonic suture between two plates.

Turkmenistan's Caspian sector has a number of petroleum plays (see stratigraphic column, p. 40). This area contains 300 mud volcanoes and nine oil and gas fields.

About 80% of hydrocarbon resources are located at a subsurface depth of more than 3 km.

According to the Turkmen government, "The Pliocene reservoirs are the most prospective on the Cheleken high and in the central part of the South Caspian province, whereas the deeper Tertiary and Mesozoic plays may be prospective on the basin margin. Oil seeps have been recorded in Mesozoic rocks along the basin margin. In the central Caspian province, the main plays are expected to be in Mesozoic rocks."

Turkmenistan has identified more than 40 untested structural leads. And 23 undrilled structural and stratigraphic leads have been identified in the central Caspian province.

The Turkmen sector

Turkmenistan postulates undiscovered reserves on its Caspian shelf at 3 billion metric tons (22 billion bbl) of oil and 4.8 trillion cu m (168 tcf) of gas. Current production is from eight structures on the Apsheron-Prebalkan high.

Since the dissolution of the Soviet Union, exploration in the area has been curtailed by a lack of funds, and production has been erratic. According to the Turkmen government, this is "largely due to problems with old equipment and outdated technology," problems Turkmenistan hopes to solve by inviting foreign investors into the area.

In 1995, the Turkmen oil and gas industry ministry let contract to Western Atlas for a two-phase seismic study of the Caspian shelf. The first phase of the study was a 7,000 line-km seismic survey on the Caspian shelf in water depths greater than 10 m.

First-round bidders are required to purchase the $95,000 data package from Western Atlas.

Western Atlas also will conduct the second phase of the study, which will include 1,500-3,000 line-km of seismic data in shallower water (less than 10 m). The data are scheduled to be available in December.

Territorial disputes

The five countries that border the Caspian have been hotly debating littoral boundaries for more than 3 years.

The dispute centers on whether the Caspian is considered a lake or a sea.

If the Caspian is determined to be a lake, Turkmenistan, Azerbaijan, Russia, Kazakhstan, and Iran would share resource rights under a "legal condominium" arrangement. If deemed a sea, each country would have exclusive rights to a portion of the waters (OGJ, July 21, 1997, p. 23).

Russia and Iran claim the Caspian is a lake, while Azerbaijan would like to see it divided into five national zones. Turkmenistan, and to a large degree Kazakhstan, favor the so-called doughnut apportionment, under which each country would have exclusive rights to a 45-mile zone off its coast, with the center section shared by the five.

Turkmenistan claims an end to the disputes is in sight. At a meeting of the countries at yearend 1996, only Azerbaijan refused to accept the doughnut scheme, says the Turkmen government.

In February, Turkmenistan and Kazakhstan agreed to respect the national-sector boundaries until all five countries could agree on a single plan. This enabled both countries to continue exploration and development work in the Caspian.

"The Iranian border has been in effect since 1921 and is not in dispute," says the Turkmen government.

For the most part, the five countries are confining their activities to undisputed areas, although one disputed prospect flared the controversy anew between Azerbaijan and Turkmenistan (OGJ, Sept. 1, 1997, Newsletter). Contested areas will be negotiated on a block-by-block basis, says Turkmenistan.

Long-term goals

Despite having two giant oil fields-Cheleken with an original reserves estimate of 640 million bbl and Kotur-Tepe with 4 billion bbl of oil and 2.1 tcf of gas-Turkmen oil production was only 100,000 b/d in 1995 and 79,000 b/d in 1996. Gas production was 23 billion cu m in 1995 (2.2 bcfd) and 35.2 billion cu m (3.375 bcfd) last year.

The country plans to increase production to 200,000 b/d of oil and 130 billion cu m/year of gas (12.5 bcfd) by 2028. By that time, foreign investment is expected to account for 9 million tons/year of oil (180,000 b/d) and 90 billion cu m/year of gas (8.6 bcfd).

According to the state committee for statistics, Goskomstat, joint ventures produced 15% of the petroleum produced in Turkmenistan last year. Given the country's goals, foreign ventures should account for 90% of oil production in 2028 and 69% of gas production.