Dragon targets further production increase from Turkmen offshore fields

Offshore staff

ASHGABAT, Turkmenistan – Dragon Oil expects to employ three drilling rigs for all or part of this year on its fields in the Cheleken Contract Area of the Caspian Sea.

As in 2011, these will likely be theIran Khazar, Rig 40, and the NIS, to be joined in the second half of this year by the newly built Super M2 jackup and another 2,000-hp platform-based rig.

Last year,Dragon performed structural upgrades on four platforms adding four extra drilling slots for a jackup on the Dzheitune (Lam) platforms 21 and 22 and Dzhygalybeg (Zhdanov) platforms 21 and 60. The company also added six slots to the Dzheitune (Lam) A platform.

The Dzheitune (Lam) block-1 riser platform has been commissioned following re-connection of the pipelines feeding into this gathering station from the old block. Block-1 will serve as a gathering station and will help raise throughput capacity of the Dzheitune (Lam) West area.

Dragon expects to complete construction of the 16-slot Dzhygalybeg (Zhdanov) A and B platforms in summer 2012 and the first half of 2013, respectively. In both cases the design allows for deployment of either a platform-based or jackup rig.

During the second half of this year, work on the block-4 riser platform and installation of the associated pipelines also should be completed. This installation will act as a gathering station for production from new wellhead and production platforms on the Dzhygalybeg (Zhdanov) field.

An independent consultant has estimated contingent gas resources at the CCA fields at 1.4 tcf. Dragon says planned upgrades of and additions to offshore and onshore infrastructure should allow these resources to be converted to reserves in the future.

Commissioning of a gas compressor station in Hazar, Turkmenistan, has allowed gas flaring offshore to be reduced.

Dragon continues to discuss with the Turkmen government options for monetizing the gas, including a long-term gas sales agreement, targeting export markets. The company is also reviewing options for condensate recovery.

This year, its target is a 15% production increased by drilling and putting into production 13-15 wells and further workovers.

During 2012-15, it expects to maintain average production growth of 10-15% per year, taking gross field production to 100,000 b/ of oil in 2015 with the aim of maintaining this plateau for a minimum of five years.

This will involved deployment of up to three jackups, more platform-based rigs, construction of further new platforms, and execution of other infrastructure projects.

01/24/2012