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 contracted blocks) in the Turkmen part of the Caspian Sea, were put for international tender.
The Turkmen side considers it a priority to sign the production sharing agreements (PSA) 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 on a PSA basis.
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. The negotiations are also underway with the companies of Europe, the US and the Persian Gulf. In November 2017, France’s Total company said that it is ready for investments in Turkmenistan.
"Block 1"
The PSA contract was signed in 1996. The operator is the Petronas Charigali (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 as part of the "Block 1" contract area.
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 has conducted seismic surveys, drilled several dozens of exploration, appraisal and exploitation wells. The company also prepared raw materials from the Turkmen sector of the Caspian Sea for industrial production.
Industrial production and exports of oil began in May 2006. The current oil transportation route passes through Azerbaijan.
Gas production has become available since 2011. A gas processing plant and a ground 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 fuel.
In November 2017, the company said that it is ready to supply commercial gas from the Turkmen sector of the Caspian Sea in the volume of five billion cubic meters starting from the 3Q18, for a period of 20-25 years, if necessary.
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.
"Cheleken block"
The project's operator is the Dragon Oil (UAE-UK). A production sharing agreement (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 territory.
The total area of the contract territory 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 territory stand at 663 million barrels.
Contingent oil and condensate reserves amount to 63 million barrels. Gas reserves stand at 1.3 trillion cubic feet. Prospective gas resources amount to 1.3 trillion cubic feet.
Project status
Dragon Oil remains one of the biggest investors in Turkmenistan, having invested $5.96 billion (4.84 billion for capital expenditures and $1.12 billion for operating expenses) in the development of the Cheleken contract area.
The company’s specialists planned to drill 18 offshore wells and overhaul the existing ones in 2017. Average daily oil production at the Dzheitune and Dzhygalybeg fields has been steadily increasing – from 7,000 barrels per day in 2000 to 10,800 tons (35,000 barrels) in 2017. Dragon Oil plans to increase average daily oil production from offshore platforms in the Cheleken Contract Area of the Turkmen shelf of the Caspian Sea to 100,000 barrels by 2021.
Dragon Oil exports oil through the port of Baku (Azerbaijan), the rest is exported through Makhachkala (Russia).
Since the start of the project, several dozens of new wells have been commissioned, ten offshore platforms, additional oil storage facilities have been built, and it has become possible to load two tankers simultaneously.
"Block 3"
A production sharing agreement (PSA) was signed in 2007. The project's operator is Buried Hill company.
Project Status
A 3,000-kilometer 2D seismic survey has been carried out. The latest operations were related to the analysis of seismic data and development of a drilling strategy. The company aims at long-term relations with Turkmenistan.
"Block 21"
The PSA contract 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 the structures are highly perspective in terms of hydrocarbon resources.
Project status
According to results of processing of the 2D/3D seismic data, obtained after the exploration work, the estimated recoverable reserves amounted to about 800 billion cubic meters of natural gas and 95.5 million tons of liquid hydrocarbons.
Total capital 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"
Operator - RWE Dea AG company (Germany). PSA was signed in 2009.
The license block is located in the south-eastern region of the Turkmen shelf of the Caspian Sea and covers an area of nearly 940 square kilometers. Under the agreement, the license envisages carrying out exploration work within a six-year period. Some 17 prospective facilities and structures were discovered.
Resource estimates are unknown. If the hydrocarbon reserve is discovered, a license will be issued for its commercial production for a period of 25 years. The total expenditures during the initial period of the exploration for the period of four years were estimated at $60-80 million.
Project status
RWE Dea summarized the results of the 3D seismic survey in 2013 that was carried out in this zone for the first time and covered an area of approximately 400 square kilometers.
"Block 19 and 20" (stage of negotiations)
Italy’s ENI company shows interest in these blocks with the reserve of over 500 million tons of oil and 630 billion cubic meters of natural gas.
Under the PSA, ENI in 2014 extended the contract on onshore Nebit Dag block in Turkmenistan for additional 10 years.
ENI invested more than $1.5 billion in Turkmenistan since 2008 until 2016. Its activity covers the contract area of over 1,000 square kilometers in Turkmenistan’s Balkan province.