Ashgabat, Turkmenistan (Platts)--16Nov2012/638 am EST/1138 GMT

Turkmenistan, which has vast resources of natural gas, is also moving into a phase of renewed oil exploration with a number of companies saying this week they are planning exploration wells for 2013.

Russia's Itera said at a conference in Ashgabat Thursday that it planned to drill its first well in the Turkmen sector of the Caspian Sea next year, and two other Caspian offshore operators, Germany's RWE and Cyprus-based Buried Hill Energy, told Platts they would also drill their first wells in 2013.

Itera Vice President Gennady Skidanov told the annual Oil and Gas Turkmenistan conference that his company intended to drill its first well in Block 21 in the first half of next year.

Itera has previously stated that preliminary estimates, derived from seismic surveys, indicate recoverable oil reserves of some 219 million mt along with some 92 billion cubic meters of natural gas at the block.

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Total investment required for actual production is in the region of $6 billion, Itera has said.

Two other companies with production sharing agreements in Turkmenistan for offshore Caspian Sea development will also start drilling next year, corporate sources told Platts.

A senior official at RWE, which operates Block 23, told Platts: "We will drill our first well by the end of next year."

RWE completed seismic surveys in August and is currently interpreting the data. The company anticipates the cost of seismic and drilling activity at around $300 million and full field development at around $5-6 billion.

SERDAR DRILL

Corporate sources told Platts that Buried Hill, which has held the license for the offshore Serdar field since 2008, is also intending to drill its first well next year.

This is particularly controversial as ownership of the field, which lies in the center of the Caspian, is disputed by Azerbaijan, which calls the field Kyapaz.

In July, Azerbaijan formally protested that Buried Hill was conducting seismic activity at Serdar/Kyapaz in defiance of a 2008 agreement between the two countries under which, according to Azerbaijani accounts, both sides promised to refrain from efforts to develop Serdar/Kyapaz pending resolution of their maritime boundary dispute.

Turkmenistan's prospects for developing oil are considered to depend very considerably on its ability to develop both proven and presumed resources in its sector of the Caspian.

A senior Turkmen official told Platts that an official target of producing 110 million mt by 2030, presented in a slide show at the Ashgabat conference on Wednesday, was not correct.

The official said the current goal is "70 million mt, mainly in the Caspian."

Turkmenistan produced 10.7 million mt (216,000 b/d) in both 2010 and 2011.

--John Roberts, john_roberts@platts.com
--Edited by Stuart Elliott, stuart_elliott@platts.com

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