TURKMENISTAN - The PSAs.

Normally the production sharing agreements are for 25-year production periods with possible five-year extensions. They are negotiated on a case-by-case basis. But the main terms are uniform in all PSAs, under the petroleum law.

In the Turkmen sector of the Caspian, there are two PSA operators: Petronas of Malaysia and Dragon Oil of Ireland. Dragon is controlled by Dubai's state-owned Emirates National Oil Co.

Petronas in mid-1996 was the first company to get a PSA. It moved into offshore Block 1, 1,467 sq km, with a 100% interest. This has proved to be rich in petroleum. In Sept. 2002 Petronas made a big discovery with its East Livanov 2A well, where three tests yielded 14,176 b/d of oil and 19.05 MCF/day of gas in a Pliocene Variegated series. This was the fourth probe to be sunk in block 1 (Gubkin).

Petronas said the results supported the view of high prospectivity in the Turkmen sector of the Caspian. Potential reserves in the three earlier finds - East Livanov, Gubkin and Barinov - are put at about 2.6 bn barrels of oil equivalent. Appraisal work is underway to confirm the commerciality of these finds.

In Block 2, Dragon Oil is producing from the Cheleken oilfields, Lam and Zhdanov. In June 2002 its Lam 22-103 development well successfully tested 3,700 b/d of oil. It spudded Lam 22-104 at the end of June.

Lam 22-103 well, Dragon's third, went into production in July and this raised the company's output to 12,000 b/d of oil and 25 MCF/day of associated gas. Dragon aims to increase its oil production capacity to 75,000 b/d by 2008 (see Part 2).

ExxonMobil, however, pulled out of Turkmenistan earlier this year after disappointing results at the onshore Garashsyzlyk-2 block in the west of the country. Following test drilling begun in 2001, it said investment in the block's fields, Kotur Tepe/Barsa Gelmes, was not justified. It closed its offices in Ashgabat and Balkanabat.

The block's reserves have been estimated at about 1 bn barrels of oil equivalent. ExxonMobil's partners in this are Monument Oil & Gas of the UK (Lasmo which now is owned by Agip), and TurmenNeft (see background in Vol. 55, No. 10).

Burren Energy, which bought out Monument in the onshore Nebit Dag block, is currently developing its Burun field. It is embarked on extensive re-completion programme on more than 100 wells. It currently has 50 wells producing approximately 8,000 b/d of 33o API sweet crude oil. It exports its production in tankers that ply the Caspian, carrying the crude to both Iran and Azerbaijan (see Part 2).

The company also holds four other developed oil and gas fields within the Nabit Dag PSA as well as a number of prospective discoveries. Pado Oil, an Austrian company, has a joint venture PSA with TurkmeNeft that covers the Khazar concession in the eastern Cheleken region. This PSA was signed in 2000.

So far, however, there has been little activity beyond studying data on the Southern Kamyshlydja prospect provided by TurkmenNeft.

Tracer Petroleum and and the local CanNeft in late 2001 formed a joint venture, under a PSA, to develop the Adzhiyap gas field in south-western Turkmenistan, bordering Iran to the south and the Caspian Sea to the west. CanNeft has estimated the field's reserves at 3-6 TCF.

The block has 12 structures. One of these, drilled in the 1980s, logged a gas column of 60 metres. Testing then was prevented due to a collapsed casing.