Azerbaijan, Baku, August 9 / Trend E. Ismayilov /
Dragon Oil company (UAE) has been producing oil in the Turkmen sector of the Caspian Sea since 1996. According to the contract for the transportation of raw materials to the world markets through the Baku port, it transports most oil through the Baku-Tbilisi-Ceyhan oil pipeline, operated by BP, the Dragon Oil report on initial results of the first half said.
The report said that the contract for the transportation of oil through the territory of Azerbaijan was signed June 16 for a period of 12 months. It involves the transportation of oil under FOB Aladja Jetty and then in a western direction. Dragon Oil is planning to sell a significant portion of its products on this route during the term of the contract.
The company's revenues from oil transportation through the territory of Azerbaijan totaled $70.4 million in the first half compared to $16.7 million for the same period of last year. Dragon Oil received income worth $ 205.9 million in January-June by selling oil to Iran compared to $231.9 million in January-June 2009. Revenue from oil transportation in other areas in the first half amounted to $0.3 million compared to $0.2 million for the same period of the last year, the report said.
Previously, the company primarily used the southern route through Iran on "swap". The term of the agreement for the exchange of crude oil with the National Iranian Oil Company expired in late March 2010. Earlier this year the contract was extended until July this year. The negotiations on further actions have not been completed yet.
The controlling package of shares in Dragon Oil is owned by Emirates National Oil Company (ENOC). It is owned by the government of Dubai. The PSA contract was signed with the Turkmen government for a period of 25 years in 1999.
The contract area includes two oil and gas fields in the Caspian Sea - Jeitun and Jigalibeg. According to the independent auditor, the proven resource base for hydrocarbons of this block hits 636 million barrels of oil. Forecasted gas reserves are estimated at 3.2 trillion cubic feet.