Dubai state-owned Dragon Oil plans through organic growth to raise production to 200,000 b/d by beginning of 2025, and then through acquisitions to 300,000 b/d by 2026, with an eye specifically on Asia-Pacific.
The company's chief executive Ali Al Jarwan said today its production was 171,000 b/d in 2022, up from 163,000 b/d the year before, and is currently at around 175,000 b/d.
"So if we continue adjusting our productivity in the countries we are producing in, this could reach an organic growth to 200,000 b/d by the beginning of 2025," Jarwan said.
The organic growth Jarwan mentioned is tied to pre-existing upstream assets, mainly in Turkmenistan and Iraq. In the former, Block 19 in the offshore Caspian Sea is part of the expansion plan.
"There is potential [in Block 19] but we still have to assess," he said. An agreement between Dragon Oil and Turkmenistan's state-owned Turkmennebit was signed in November 2022 covering 3D seismic studies in the block, which Jawan noted today is adjacent to Dragon Oil's Cheleken concession.
"So the idea is if we have more hydrocarbon resource there, it could add to our production," he said. Last October, Dragon Oil said it expects to increase crude output from Cheleken to about 60,000 b/d after signing a 10-year extension to its production-sharing agreement (PSA) with Turkmennebit. It projected an increase in production to 70,000 b/d by 2025.
Dragon Oil sells all its Turkmenistan output to trading firm Vitol under a monthly contract valid for two years.
Dragon Oil also holds 30pc equity in Iraq's Block 9 concession, which includes the Faihaa field near the Iranian border. Baghdad has had plans to increase production from the field to 100,000 b/d by end of 2022, from around 22,000 b/d in 2019, but these have fallen behind schedule.
"Faihaa has increased production to 65,000 b/d in recent days," Jawan said today. "Hopes are to reach 100,000 b/d by end of 2024, which constitutes phase 1 of the field's expansion." Beyond that is a second phase. Trading firm Trafigura sells Dragon Oil's Iraqi production whenever the company receives its allocated volumes, Jarwan said today, which is the country's form of payment for several oil companies operating there.
On the potential for acquisitions to push production up by a further 100,000 b/d, Jarwan said these could be in countries where Dragon Oil has a presence and said "there are promising opportunities in general in countries like Malaysia, Indonesia or Vietnam." He said current prices and market conditions favour upstream investment, and the company is actively looking for expansions in the gas sector as a priority and as a way of diversifying.
Dragon Oil is a subsidiary of Dubai's state-owned Enoc.
