Azerbaijan, Baku, Oct.19 / Trend, E. Ismayilov /
Dragon Oil (UAE), which has been an oil producer in the Turkmen sector of the Caspian Sea since 1996, has extended its contract until December 31 2012 with a subdivision of the State Oil Company of Azerbaijan (SOCAR) - Socar Trading on sale of its share of oil production under FOB Aladja Jetty, it was stated on the company's official website on Wednesday.
Turkmen oil is transported through Baku and further via Baku-Tbilisi-Ceyhan oil pipeline. As is expected, oil prices within this contract extension will be determined from 10 to 13 per cent discount for Brent depending on the level of world oil prices.
According to the company CEO Abdul Jaleel Al Khalifa, oil producer Dragon Oil is focused on maintaining long-term stability of production and sales. He said the export route through Baku is soundly reliable for this fundamental aspect of the business.
He added "We will continue to consider alternative routes for the future."
Previously the company mainly used the southern route through Iran on the supply system "swap". In late March 2010, the agreement for the exchange of crude oil from the National Iranian Oil Company (NIOS) expired. Earlier this year the contract was extended until July of 2011, negotiations on further actions have not been completed yet.
The Emirates National Oil Company holds the controlling stake in Dragon Oil which is owned by the Dubai Government. The contract PSA (PSA) with the Turkmen Government was signed in 1999 for a period of 25 years.
The company conducts development at the Jeitun and Jigalibek fields on the Caspian shelf within a contract signed with the Turkmen government. According to an independent auditor, the attested hydrocarbon resource base of this block is 636 million barrels of oil, probable reserves of gas are estimated at 3.2 trillion cubic feet.