Dragon Oil has placed $18 million (€14.5 million) worth of new shares to fund an exploration project.

The company, which works in Turkmenistan and produces oil in the Caspian Sea, said it placed 36.5 million new ordinary shares, equal to about 10 per cent of the existing share capital, at a price of 49 cent each.

"The placement was materially oversubscribed. Application will be made to the Irish Stock Exchange and to the London Stock Exchange for the new ordinary shares to be admitted for trading" Russia's Aton Capital Group said yesterday. The shares are expected to begin trading on January 2nd 2004.

Dubai-based Emirates National Oil owns two thirds of Dragon Oil, which said earlier this year it planned to raise output in Turkmenistan by 15 per cent to 20,000 barrels a day this year.

Dragon sells its output to refiners around the Caspian Sea or it is swapped with Iran which takes the crude to its northern refineries and repays Dragon with its own oil in the Middle East.