Although Dragon Oil has reduced its loss before tax from $6.76 million (€6.4 million) to $2.7 million (€2.6 million) in the six months to June 30th, 1999, its financial position "still remains difficult", according to the group.

It is, however, confident that the steps required to improve its position have been taken. The interim statement said it was on schedule to increase production in 2000 and implement a development programme on its main asset in Turkmenistan.

Dragon is "actively seeking short-term and long-term facilities" to fully develop the reserves in block 11. "This is clearly a priority for the group and will be the main focus of our efforts in the second half of 1999." The latest results show a rise in sales to $15.3 million (€14.5 million) from $4.7 million. Production costs, however, were higher. The higher price in oil would increase the revenues from crude sales in Turkmenistan and improve its financial position, the company said.