Ashgabat, Turkmenistan, Jan. 3
By Huseyn Hasanov – Trend:
Thirty-two licensed blocks with projected reserves of 11 billion tons of oil and 5.5 trillion cubic meters of gas (excluding the contract blocks) in the Turkmen part of the Caspian Sea were put up for international tenders.
The Turkmen side considers it a priority to sign production sharing agreements (PSAs) with foreign companies.
According to local estimates, more than 80 percent of reserves on the Turkmen part of the Caspian Sea are in sediments located at a depth of over 3,000 meters. New perspectives are associated primarily with two major oil and gas basins - Middle Caspian and South Caspian.
Turkmenistan annually produces about 10 million tons of oil. The production is ensured by the Turkmennebit State Concern and companies from the UK, Malaysia and UAE operating based on PSAs.
Petronas, Dragon Oil, Buried Hill, RWE Dea AG, Itera and Eni have been involved in the development of the Turkmen part of the Caspian Sea. Negotiations are also underway with the companies of Europe, the US and the Persian Gulf.
Block 1
The PSA was signed in 1996. The operator is the Petronas Carigali (Malaysia). The total area of the contract territory is about 1,467 square kilometers and it includes Diyarbekir, Magtymguly, Ovez, Mashrykov and Garagol Deniz fields.
Proven reserves are at least 1 trillion cubic meters of gas, more than 200 million tons of oil and 300 million tons of gas condensate.
Project Status
Petronas conducted seismic surveys, drilled several dozens of exploration, appraisal and exploitation wells. The company also prepared fields in the Turkmen sector of the Caspian Sea for operation.
Production and export of oil began in May 2006. The current oil transportation route passes through Azerbaijan.
Gas production became available in 2011. A gas processing plant and a gas terminal were commissioned in the vicinity of the Kyyanly settlement. Presently, there is possibility to provide CAC-3 (Central Asia-Center) gas pipeline, passing through Russia, with gas.
The company installed equipment that allows producing gas in a volume of more than 5 billion cubic meters per year and oil in a volume of 35,000-40,000 barrels per day.
The unrealized Caspian Gas Pipeline, meant to run along the Caspian coast to Russia through Kazakhstan, could bring back the traditionally strong positions of Russia's Gazprom JSC in the region, and the Trans-Caspian Gas Pipeline, meant to run to Europe through Azerbaijan and Turkey, could also count on gas from the Caspian Sea. These projects could also allow Turkmenistan to diversify energy routes.
Petronas has invested about $10.5 billion in the fuel and energy sector of Turkmenistan.
Cheleken Block
The project’s operator is Dragon Oil (UAE-UK). A PSA was signed with the Turkmen government in 1999. The company carries out its main activity in the eastern sector of the South Caspian Basin, in the Cheleken Contract Area.
The contract area is about 950 square kilometers. It includes the deposits of Jeitun, Jigalybek and Chelekenyangummez. The proven and explored reserves of oil and condensate in the contract area stand at 663 million barrels.
Project Status
Dragon Oil remains one of the biggest investors in Turkmenistan, having invested $6.4 billion in the development of the Cheleken Contract Area.
Over the years, the average daily oil production has been steadily increasing – from 7,000 barrels per day in 2000 to 86,700 barrels per day by the end of 2018.
From January to August 2018, more than 2.6 million tons of oil was produced as part of the project. Drilling is carried out using rigs by companies Elima, Mercury, Caspian Driller and Sakson.
Dragon Oil plans to increase average daily oil production to 100,000 barrels by 2019 or 2020.
Dragon Oil exports oil through the port of Baku, Azerbaijan and through Makhachkala, Russia.
Since the start of the project, several dozens of new wells have been commissioned, 10 offshore platforms, additional oil storage facilities have been built.
Block 3
A PSA was signed in 2007. The project's operator is Buried Hill.
Project Status
A 2D seismic survey has been carried out. The latest operations are related to the analysis of seismic data and development of a drilling strategy.
The parties have recently paid attention to new opportunities after the signing of the Convention on the Legal Status of the Caspian Sea in August 2018.
Block 21
A PSA was signed in 2009. The operator of the project is Russian ARETI, which was created as a result of rebranding of ITERA International Group of Companies.
The block includes two structures – West Erdekli and South Erdekli. The company said the studies proved that they are highly prospective in terms of hydrocarbon resources.
Project Status
According to processing of the 2D/3D seismic data, obtained after explorations, the recoverable reserves amount to about 800 billion cubic meters of natural gas and 95.5 million tons of liquid hydrocarbons.
Total investments in the company’s project are valued at $6 billion.
ARETI previously reported that it does not rule out participation in the development of the blocks 21 and 22 within the Zarit Joint Venture.
Block 23
Block 23 operator is RWE Dea AG (Germany). A PSA was signed in 2009.
The block is located in the southeastern region of the Turkmen shelf of the Caspian Sea and covers an area of nearly 940 square kilometers. The agreement envisages carrying out explorations within a six-year period.
Resource estimates are unknown. If a hydrocarbon reserve is discovered, a license will be issued for commercial production for a period of 25 years. Total expenditures in the initial period of four-year explorations are estimated at $60-80 million.
Project Status
RWE Dea summarized the results of a 3D seismic survey in 2013 that was carried out in the area for the first time covering approximately 400 square kilometers.
Blocks 19 and 20 (in stage of negotiations)
Italy’s ENI is showing interest in these blocks with a reserve of over 500 million tons of oil and 630 billion cubic meters of natural gas.
Under a PSA, ENI in 2014 extended the contract on onshore Nebit Dag Block in Turkmenistan for additional 10 years.
ENI has invested about $2 billion in Turkmenistan since 2008. Its activity covers a contract area of over 1,000 square kilometers in Turkmenistan’s Balkan Province.
