Turkmenistan will not invite foreign oil companies to invest in the exploration or production of its prized onshore gas fields, Energy Minister Bairamgeldy Nedirov has told potential investors.
Instead, international energy companies will be restricted to offshore blocks in Turkmenistan's sector of the Caspian Sea and service contracts at onshore gas fields, Reuters reports.
"No, there is no possibility. Onshore, we do not do any production sharing agreements," Nedirov told reporters when asked if China's CNPC and other firms would be invited to develop the country's onshore gas fields.
Restricted to offshore oil fields, Dubai-based Dragon Oil , Malaysian state oil major Petronas and other foreign oil firms invested around $3 billion under offshore production sharing agreements (PSAs) in 2010, and that total was expected to increase this year.
Deputy director for the Turkmenistan state agency for hydrocarbon resources Ashirguly Begliyev told investors at a two-day road show in Singapore that investment based on PSAs had grown gradually since 2005.
“The majority of the investment has been made in the Turkmenistan's sector of the Caspian Sea," Begliyev said.
Oil production under PSAs was expected to rise by 25% to 42 million barrels in 2011 from 33 million barrels last year, he said.
Of that total, 29.2 million barrels will be from the Caspian Sea compared to 19.75 million barrels in 2010.
Turkmenistan plans to triple gas production to 230 billion cubic metres over the next two decades and forecasts a more than six-fold increase in oil output to 529 million barrels per year. With a population of only 5 million, it will export nearly 80%.
The nation has been looking to diversify energy sales from its traditional market, Russia, and is courting investors from the West, China and other Asian countries keen to exploit oil fields and the world's fourth-largest natural gas reserves.