Principal Interests

Dragon Oil's principal asset is the Cheleken Contract Area in the eastern section of the Caspian Sea, offshore Turkmenistan, which we operate through the Production Sharing Agreement (‘PSA’) signed with the Government of Turkmenistan in 1999, effective in May 2000.  Dragon Oil’s production reached the landmark level of 50,000 bopd at the turn of 2009-10.  The average daily rate of production in 2009 rose 9% to 44,765 bopd compared to 40,992 in 2008.  In H1 2010 the average daily rate of production reached 46,420 bopd, an increase of 8% over the previous comparable period (H1 2009: 42,808 bopd)

Dragon Oil is focused on driving production growth from our high quality asset base through maintaining a good supply of rigs and significant investment in infrastructure.  Our drilling programme utilises both jack-up and platform-based drilling rigs. Dragon Oil's own refurbished platform-based Rig 40 began drilling its first well in January 2009.  The contract for the Iran Khazar jack-up drilling rig, which we have successfully employed since 2005, has been extended until May 2011.  The platform-based NIS rig has also been secured for the 2010-11 period, starting from December 2009.  In early 2010, Dragon Oil awarded a contract for a Super M2 jack-up rig to be delivered in Q4 2011 which will be a newly-built, powerful rig, capable of drilling wells faster and more efficiently.

In terms of infrastructure development, we recently announced contract awards for two additional production platforms to be built in late 2011 and early 2012 to maximise crude recovery  The Dzhygalybeg (Zhdanov) A platform will be able to support a platform-based rig or a jack-up rig, and the Dzheitune (Lam) C platform will support a jack-up rig.  The new 30” trunkline and Phase 2 expansion of the Central Processing Facility are also due to be completed during the second half of 2010.

Dragon Oil continues to progress its diversification strategy.  Our dedicated New Ventures Team continue to focus on late stage exploration and development opportunities in North Africa, the Middle East and Central Asia where we believe we have the best strategic fit. 

The development and commercialisation of our 3.1 tcf 2C contingent gas resources from the Cheleken Contract Area remains a top priority.  Our contractors, Saipem, are expected to deliver the final Front End Engineering Design (FEED) study for a potential onshore gas treatment plant by Q3 2010.