LAM/Zhdanov overhaul program lifts production off Turkmenistan
Jeremy Beckman
Jeremy Beckman, Editor, Europe
Production activity is heating up off Turkmenistan. In nearshore Block 1, Petronas Carigali is about to start an extended well test via a specially modified jackup platform.
In the adjacent Cheleken contract area, Dragon Oil’s long-time redevelopment of the LAM and Zhdanov fields is entering a new phase. New platforms and processing facilities should allow the company to more than double oil output to 50,000 b/d.
The Cheleken acreage extends over 950 sq km. Zhdanov (Dzhygalybeg) and LAM (Dzheitun) were discovered respectively in 1967 and 1972. Both are elongated oilfields with associated gas, in water depths ranging from 10-37 m. They were partially developed by Soviet contractors between the mid-1970s and late ‘80s by over 115 wells, with production sent to the Turkmen coast for processing.
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Map shows Cheleken contract area offshore Turkmenistan.
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At that time, the offshore crude was mixed with crude from the onshore Cheleken field and processed at central gas-oil separation and oil-water separation facilities located at Cheleken. By 2001, however, only 16 of the Soviet era wells were still in service, producing cumulatively less than 8,000 b/d.
Following the breakup of the Soviet Union, Larmag Energy Assets, a Dutch independent oil producer, took charge of development in a joint venture with Turkmen state oil company Turkmenneft. Dragon Oil bought part of Larmag’s interest in the joint venture in 1993, acquiring 100% interest four years later. Emirates National Oil Co. Ltd. LLC (ENOC) owned by the government of Dubai, UAE, acquired a controlling interest in Dragon Oil in 1998.
Dragon signed a production-sharing agreement (PSA) with the government of Turkmenistan that became effective in 2000. The PSA’s duration - 25 years, with the possibility of a 10-year extension - reflects the fields’ untapped potential. In June 2005, proven and probable reserves were nearly 658 MMbbl of oil, with best estimate contingent gas resources of 3.5t cf.
Today, technical engineering and planning is conducted from Dragon’s base in Dubai, while the company’s field operations and logistics base is in Hazar, Turkmenistan. Dragon has also retained a country office in the capital Ashgabad.
When Dragon took the reins at LAM/Zhdanov, most of the existing platforms were either abandoned or in need of major upgrades. Some of the unserviceable facilities were still connected to live wells, forcing the company into a systematic program of platform and well decommissioning. Management had to balance the costs of this program - potentially debilitating for a company Dragon’s size - with the need to raise revenue through increased production.
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(Above) Flaring at the LAM22 platform.
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Volume 66 Issue 3
March 2006
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