Dragon hones focus on sustainability in Turkmenistan [Global Gas Perspectives]
Dubai-based Dragon Oil is taking steps to utilise more of the natural gas it extracts off the coast of Turkmenistan over the coming years, as part of a push to reduce flaring to near zero by 2027, CEO Ali Rashid Al-Jarwan told NGW on the sidelines of the OGT-2024 conference on October 23. Alongside this focus on sustainability, the company also plans to kick off exploration drilling at a new site later this year and ramp up production at its existing fields.
Dragon, wholly-owned by Emirates National Oil Co. (ENOC) has been operating for nearly two and a half decades at the Cheleken oil block, situated in Turkmenistan’s zone of the Caspian Sea. In 2022, it agreed to extend its production-sharing contract (PSC) for the block for another ten years until 2035, pledging to invest a further $7-8bn in the project over that period.
Oil output at Cheleken, which comprises the Dzheitune and Dzhygalybeg fields, currently fluctuates between 50,000 and 60,000 barrels/day, Al-Jarwan said. The block is the biggest oil producer in Turkmenistan, which last year lifted 8.3mn tonnes, or 167,000 b/d, in total.
Dragon’s target is to raise its extraction rate in the country to 70,000 b/d in the years to come, according to Al-Jarwan.
“We have a development plan to be implemented, and we are utilising technology and innovation to unlock the potential,” he explained. “There is really a lot of potential left at Cheleken. We’ve achieved only a 10% recovery factor, so there is a long way further to go over the next 10 years.”
Dragon also plans to start exploratory drilling at Block 19 near Cheleken this year, following the completion of a $35mn 3D seismic survey with Turkmenistan’s state oil company Turkmennebit, Al-Jarwan confirmed in February. The company has contracted the Kazakh-built Satti rig for the purpose.
Sustainability push
While oil is the main focus at Cheleken, Dragon aims to make use almost all the natural gas produced at the block by 2027 instead of flaring it, by increasing gas lift and gas reinjection, and supplying more gas onshore for sale to the Turkmen government. Currently, the company utilises above 70% of gas at Cheleken.
“Of course it makes sense, to utilise the gas instead of flaring it. And it will make even more sense if we monetise the gas through sale,” he said. “This is especially true if we can get some emissions credits from the UN. That’s another avenue for improving the economics.”
Dragon is also working with international companies to improve monitoring of methane emissions and leak detection, carry out preventive maintenance and replace leaking equipment parts. In a speech at the forum in Ashgabat, Al-Jarwan described reductions in methane leaks as “a cost-effective opportunity for the industry.”
These efforts are part of a broader push by Dragon to increase sustainability across its operations in Turkmenistan and the other countries where it is active, including Egypt and Iraq. It aims to eliminate flaring in those two countries in 2025. The company is using AI to maximise production potential and data analytics to optimise operations, reduce the ecological impact and prevent accidents.
Dragon already recycles most of the water used in its oil operations, but wants to increase the share further, Al-Jarwan said. The company is also assessing options for powering its operations with renewable energy. It is installing solar systems in Turkmenistan and Iraq, he said.