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Dragon Oil says production growth curbed by delayed Caspian rig

BY EDUARD GISMATULLIN

DUBAI, United Arab Emirates (Bloomberg) -- Dragon Oil Plc, an explorer focused on Turkmenistan, said 2014 production growth will be at the lower end of its forecast after delivery of a rig was delayed.

Output growth will be near the bottom of a 10 percent to 15 percent range, the company said today in a statement. Dragon is waiting to receive the Caspian Driller rig in Turkmenistan after its delivery was pushed back by contractors.

“Continued delays in the arrival of the Caspian Driller have been the biggest disappointment during the past two years, forcing us to review and adjust our drilling plans,” Dragon said in the statement. The rig will now arrive in June or July, CEO Abdul Jaleel Al Khalifa said by phone.

Dragon contracted Yantai CIMC Raffles Offshore Ltd. to deliver the Caspian Driller after the rig was assembled at a Russian shipyard in the Caspian Sea. While the facility was inaugurated in December 2012, it’s yet to be completed after the contractors “dragged and dragged,” Al Khalifa said.

No one was available to comment at Yantai CIMC’s office in the Chinese province of Shandong.

Dragon also said today that net income dropped 15 percent to $512.6 million in 2013 as revenue slipped 9.3 percent. The Dubai-based company maintained its 100,000-barrel-a-day production target for 2015, having raised output last year to an average of about 73,750 barrels a day from 67,600 barrels a day.

Dragon, which plans to spend about $1.5 billion on projects through 2016, has expanded outside Turkmenistan and will drill its first exploration wells in the Philippines and Iraq this year. It’s in talks with potential buyers outside Turkmenistan for its Caspian Sea gas, the CEO said, declining to name any.

Al Khalifa expects to award a contract to construct a gas processing plant by July. The facility, which would strip oil liquids from gas, would cost as much as $500 million to build and be completed in 2016. Dragon held about $2.5 billion in cash and deposits on its balance sheet at the end of 2013, sufficient to meet the required investment.

02/18/2014

 

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