<article><p>Dubai-based Turkmenistan producer Dragon Oil has broken its crude marketing ties with Azerbaijan state-owned Socar, a relationship that for Dragon had become decreasingly profitable.</p><p>Dragon said last week that it had secured two export routes for its Cheleken crude, via the Aladja jetty through Baku and Makhachkala in Russia from 1 January for 12 months. Socar has marketed all Dragon's Cheleken crude at Baku since 2010 and a source close to the company said that Socar remained one of the parties to the agreement, but this is not the case.</p><p>Dragon has repeatedly said it was looking for alternative marketing arrangements.</p><p>Dragon is entitled to 55pc of the 80,510 b/d pumped at Cheleken in the third quarter. Production is forecast to climb to 100,000 b/d in 2015. The company exports all of its crude.</p><p>Until 2010, the company marketed crude through Iran under a swap arrangement, but that ended amid contract disagreements. Iran has for the past two years said it wishes to reinstate crude swap arrangements with Central Asia producers, although its ability to do so at present is constrained by US and EU sanctions. Should sanctions be lifted, Dragon would probably want to revisit Iran as a possible export route.</p><p>The other possible export route is through Kazakhstan and Dragon has had discussions but these came to nothing because of capacity constraints in the Kazakh system.</p><p>bw/ts</p><p><br> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><p><u><a href="http://www.argusmedia.com/Info/General/News" target="_TOP"> Request more information </a></u> about Argus' energy and commodity news, data and analysis services. </p><p><i> Copyright © 2015 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.argusmedia.com </a> - All rights reserved. </i></p></article>
