Dragon Oil, the company majority-owned by the Dubai Government, has lodged a 34 per cent drop in net profit for last year to US$314.4 million (Dh1.15 billion) after lower oil prices and delays in drilling. In its earnings report yesterday, the firm announced a plan to spend up to US$870 million (Dh3.19 billion) over three years on infrastructure in Turkmenistan to boost oil output and sell natural gas that is wasted due to the lack of a market.
The firm's average oil production rose 9 per cent last year, well below its target of 15 per cent. But Dragon briefly boosted output to 50,000 barrels per day (bpd) by December, a 21 per cent rise from 2008. Dragon said output would average at least 51,000 bpd this year. It said it would spend up to $700m on oil infrastructure through to 2012 to raise oil output by between 10 and 15 per cent a year. Abdul-Jaleel al Khalifa, the chief executive, said Dragon would also spend about $250m on drilling each year.
A bigger challenge is securing a market for the natural gas produced with oil, most which is burnt off by Dragon offshore. Dragon has not been able to reach an agreement with the Turkmen government. A 40km pipeline to carry oil and gas onshore and expansion of a processing plant met with delays last year, but Mr al Khalifa said they should be completed by August. firstname.lastname@example.org