DRAGON OIL generated record revenue in 2011, reaching more than $1 billion. However, the UK-listed explorer which is focused on Turkmenistan said it expected a delay in reaching a natural gas sales agreement with the central Asian state because demand for the fuel has weakened.
Dragon is seeking agreement on gas sales terms with the government in Turkmenistan, where it has three trillion cubic feet of resources. It pumps out gas in conjunction with crude oil.
Dragon plans to build a gas-treatment plant in the Caspian Sea state, allowing it to strip liquids from the fuel before selling it or burning it off. The company has reduced gas-burning, a process known as flaring, by injecting the fuel into the Turkmen pipeline network, chief executive Abdul Jaleel Al Khalifa said.
In the absence of a sales agreement, such injections into the grid mean Dragon is effectively giving the gas away.
The company plans to award contracts to build the treatment facility this year, and extract liquids from 2014.
It said output last year rose by 30 per cent to about 61,500 barrels of oil a day, and it targets a 15 per cent gain in 2012. – (Additional reporting Bloomberg)
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