May 21, 2014 / 9:16 AM / 4 years ago

Turkmenistan eyes over $3 bln in oil investment this year

AVAZA, Turkmenistan, May 21 (Reuters) - Turkmenistan, with the world’s fourth largest natural gas reserves, expects more than $3 billion in direct foreign investment from companies looking at its Caspian Sea oil reserves, a senior official said on Wednesday.

While gas output is rising fast on growing exports to China, oil production has been relatively modest, staying barely changed at around 10 million tonnes a year.

Malaysia’s Petronas and London-listed Dragon Oil are producing oil, while Germany’s RWE, Russia’s Itera and Cyprus-headquartered Buried Hill are prospecting for oil on the sea shelf.

“In 2013, (foreign) contractors’ investments in the Turkmen sector of the Caspian totalled more than $2.5 billion,” Yagshigeldy Kakayev, head of the Turkmen state agency on management and use of hydrocarbon resources, told a gas congress in the Caspian resort of Avaza in western Turkmenistan.

“Our preliminary data show that already this year these investments are set to exceed $3 billion.”

Kakayev said the Caspian Sea shelf accounted for 55 percent of total foreign investment in the development of Turkmenistan’s hydrocarbons.

Kakayev said the Turkmen sector of the Caspian Sea included 32 licence blocks, and five of them were now being developed by foreigners in production sharing agreements.

“The remaining blocks are an issue of direct negotiations for all interested sides,” he said.

Turkmenistan’s government estimates that its sector of the Caspian Sea shelf may hold 12 billion tonnes of oil and more than 6 trillion cubic metres of natural gas.

A Turkmen official, who declined to be named, told Reuters that Western energy majors including BP, Total, Gaz de France, Eni, Chevron and ExxonMobil had displayed interest in developing the offshore oil and gas deposits. He gave no further detail. (Reporting by Marat Gurt; Writing by Dmitry Solovyov, editing by William Hardy)

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