Turkmen Napeco received shares in Dragon Oil PSA
Turkmen state-owned Napeco has recieved 5pc share in Dubai-based Dragon Oil’s production-sharing agreement (PSA) in the Cheleken field in western Turkmenistan, Napeco’s general director Maksat Pirliyev told Argus at the sidelines of the Oil and Gas Turkmenistan conference in Ashgabat.
The two firms made the deal during the conference, Pirliyev said. Dragon Oil’s license is valid until 2035, following an extension in July.
Besides the agreement with Dragon Oil, Napeco is involved with two other Turkmen projects. The firm has a PSA with Mitro International at the East Cheleken field, valid until 2025. And it has a 10pc stake in a project with Italian firm Eni at the East Cheleken field as a contractor.
For the trading side of its operations, Napeco has a joint venture with Vitol, registered in the UAE, which trades crude oil, petrol, gas condensate, heavy oils and bitumen. Napeco itself does not export the crude oil that it produces or receives through PSAs, with crude oil exported only by companies operating in Turkmenistan under their share of those agreements. Napeco processes its share of Turkmen crude oil at the Turkmenbashi refinery plant, and then sells the ready-made products.
Napeco can choose whether to sell through its joint venture with Vitol or through its loyalty deal at the state-owned commodity exchange. In the majority of cases, selling through the joint venture is more profitable, Pirliyev said.
The pricing of the oil products is based on a discount to Brent oil prices and is sold FOB from the Caspian region.
Napeco’s operations have been unaffected by the inability to use the Russian Caspian port of Makhachkala, the Napeco general director said. The firm’s main export route for crude oil and oil products is through Azerbaijan, with some supply also sent through Georgia to Europe.
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