Turkmenistan: Dragon Oil Makes Tempting Prize for ENOC

Dubai's state-owned Emirates National Oil Company (ENOC) has made an offer to buy up Dragon Oil, a company operating almost exclusively in the Turkmen portion of the Caspian Sea.

ENOC already owns a 52 percent stake in the company, and experts say its interest in acquiring 100 percent ownership is due to the likelihood that new export pipeline routes will soon open. Dragon Oil currently exports 80 percent of its oil output through Neka in northern Iran and the remaining 20 percent through Azerbaijan.

According to the company's annual report released in late March, options to be pursued this year include use of the Baku-Tbilisi-Ceyhan (BTC) pipeline. Dragon Oil also holds rights to an estimated 84.9 billion cubic meters of gas reserves in the Caspian, although no extraction has begun.

Dragon Oil rebuffed an attempt by Lukoil to buy a controlling share of the company in 2005. The company boasts of excellent relations with the Turkmen government. However, it recently dismissed senior managers for soliciting bribes from contractors. [For background see the Eurasia Insight archive].