Dragon sustains Caspian drilling program

Offshore staff

ASHKABAD, Turkmenistan -- Dragon Oil averaged daily production of 42,808 b/d from its fields offshore Turkmenistan during the first half of 2009.

This represents an 11% increase on the comparable half last year, although production tailed off a little due to two new wells coming on stream only at the end of May. And some production was lost from the Dzheitune (Lam) A/127 well due to operational issues, although these should be resolved following a workover later this year.

The two latest wells, Dzheitune (Lam) 13/133A and 28/134, were completed respectively by the Rig 40 and Iran Khazarrig. 13/133A was targeted initially at the field’s southern flank beyond the fault line, but was found to be wet. It was then sidetracked to reach the planned depth.

In April, Dragon announced it had reached agreement to extend the Iran Khazar’s contract for a further two years from May 2009. The rig is currently drilling the Dzheitune (Lam) 13/136 well, which should come on stream this month. Another well (13/135) drilled by Rig 40 should also start up shortly.

Last month, the company contracted the jackup Astra for six months starting in November, and it expects to drill two wells during the contract term. Elsewhere, a rigless workover operation on the Dzheitune (Lam) 13/96 led to incremental production of 783 b/d. Dragon also hopes to secure another platform-based drilling rig later this summer.

During the first half of the year, Dragon’s total capital expenditure in the Cheleken Contract Area was around $155 million. Spending on infrastructure was concentrated on the Dzheitune (Lam) B platform (currently undergoing installation); laying of a 30-in. (76-cm), 40-km (24.8-mi) export trunkline; the Phase 2 expansion of the Central Processing Facility; upgrading of the Dzheitune (Lam) 63 platform; and phase 2 of the Aladja jetty on the Turkmen coast.

The company says that limited availability of contractors in the Caspian Sea region is one of the chief risks to its operations. It is responding by forming contacts with new contractors, focusing on rigorous due diligence in light of the various infrastructure programs it plans over the next three to five years.

07/21/2009