Dragon Oil, a subsidiary of Dubai’s Emirates National Oil Company (Enoc), has renewed its contract with Turkmenistan’s state-owned company Turkmen Oil for an additional ten years.

The renewed contract will be effective from May 2025 and is valued at $1bn, reported UAE state news agency WAM.

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Of the total value, Dragon Oil will pay $500m in cash while the remaining amount will be paid over the next 13 years.

Over a period of 22 years, Dragon Oil has invested approximately $8.1bn in well drilling and production infrastructure in Turkmenistan. The firm has a cumulative production of 437 million barrels of crude oil.

Future investments are anticipated to reach between $7bn and $8bn. This is expected to result in production levels increasing by 60,000 to 70,000 barrels a day, reaching approximately 350 million barrels by 2035.

Dragon Oil’s main producing asset is the Cheleken complex, located in the East Caspian Sea in Turkmenistan. It comprises two major offshore oil and gas fields, Lam and Zhdanov.

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The partnership also covers another potential complex located approximately 10km to 40km off the coast of the Chiliken Peninsula.

Dragon Oil CEO Ali Al Jarwan said: “We welcome the signing of the contract extension agreement, which represents a constant commitment by Dragon Oil towards its profitable investments in the oil and gas sector in Turkmenistan.

“The signing of this contract also marks a milestone in Dragon Oil’s journey in a sustainable strategic growth and within the plan to complete growth and expansion in its operating markets, including Turkmenistan, Egypt, and Iraq, by continuing to intensify exploration work, develop fields, and repair wells, to increase production capacity to 300 thousand barrels per day by 2026.”