Country Report

Turkmenistan upstream summary

12 October 2020

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12 October 2020

Turkmenistan upstream summary

Report summary

Turkmenistan is Central Asia's largest gas producer. Galkynysh (South Iolotan), the world's second largest gas field, will underpin future production. Turkmenistan exports gas to China via the Turkmenistan-China Gas Pipeline and is now highly reliant on the Chinese gas market. Turkmenistan's economy is tightly controlled and its investment climate is challenging. Only service contracts are currently available for onshore upstream projects. PSCs can be negotiated for offshore Caspian Sea acreage, where Dragon Oil and PETRONAS operate large-scale projects.

Executive summary
Key facts
Location maps
Key companies
- National companies
  - Turkmengaz and Turkmenneft
  - NAPECO (Turkmen National Oil and Gas Company)
- IOCs
  - Offshore
  - Onshore
- Service sector
Geology
- Introduction
- Amu Darya basin
- Petroleum plays
  - Pre-salt
  - Post-salt
- South Caspian basin
- Petroleum plays
- Mangyshlak basin
- Petroleum plays
- Deryalyk-Dovdan trough (sub-basin)
- Surkhan-Vakhsh basin
- Petroleum plays
Exploration
- Licensing
- Overview
- Current IOC licences
  - Offshore
  - Onshore
- Future licensing
  - Offshore
  - Onshore
- Historical licensing
  - Tender (service contract) for shallow-water North Kotur Tepe discovery (2017-18)
  - Licensing rounds (1991-2000)
  - Ad-hoc awards
  - Previous talks
- Drilling
  - Drilling activity
- Overview
  - Offshore
  - Onshore
- Soviet-era exploration
  - Amu Darya basin
  - South Caspian basin (onshore)
  - South Caspian basin (offshore)
- Recent NOC activity
  - Amu Darya basin
  - South Caspian basin (onshore)
  - South Caspian basin (offshore)
- IOC activity
  - Amu Darya basin
  - South Caspian basin (onshore)
  - South Caspian basin (offshore)
  - Future drilling plans
  - Offshore
  - Onshore
Reserves and resources
- Turkmen classification system
- Reserves by basin
- Liquids
- Sales gas
Production
- Liquids
  - Historical production
  - Future production
- Gas
  - Historical sales production
  - Future sales production
Infrastructure
- Introduction
  - Liquids
  - Gas
- Oil infrastructure
  - Existing liquids pipelines
- Rail and sea transportation
  - Rail infrastructure
  - Ports and shipping
- Refineries
- Gas infrastructure
- Existing gas pipelines
  - Turkmenistan-China Gas Pipeline
  - Central Asia-Centre (CAC)
  - Gas pipelines to Iran
  - Other export pipelines
  - Key domestic pipelines
- Planned gas pipelines
  - Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline
  - Trans-Caspian Gas Pipeline (TCGP, Turkmenistan-Azerbaijan)
- Gas processing plants (GPPs)
- Gas-feed projects
  - Operational projects
  - Proposed / speculative projects
Costs
- Introduction
- Capital costs
  - Capital expenditure by location
- Operating costs
  - Operating expenditure by location
Policy and regulation
- Key legislation
  - Petroleum Law (Law on Hydrocarbon Resources), 2008
  - Law on the Subsurface, 1992
- Other important laws
  - Law on Joint Stock Companies, 1991
  - Law on Enterprise Activities, 2000
  - Law on Foreign Investment, 1992
  - Law on Foreign Concessions, 1993
  - Decree on Resource Use, 1999
  - Tax Code, 2004
  - Law on Trunk Pipeline Transport, 2013
  - Law on Gas and Gas Supply, 2013
  - Decree abolishing the State Agency for Management and Use of Hydrocarbon Resources and Ministry of Oil and Gas, 2016
- Regulatory body
  - Previous regulatory bodies
- State oil company
  - Key state-owned companies
- State participation
- International boundaries
- Legal status of the Caspian Sea
  - Overview
  - North Caspian Sea
  - South Caspian Sea
Fiscal terms
- Overview
- Upstream
- Midstream / downstream
  - Pipelines
- Current fiscal terms
- NOC-operated assets
- PSCs
  - State equity participation
  - Bonuses, rentals and fees
  - Royalty and other production taxes
  - PSC cost recovery
  - PSC profit sharing
  - Corporate income tax (CIT, profit tax)
  - Contractor revenue entitlement
  - Liquids and natural gas pricing
  - Domestic market oil obligation (DMO)
  - Abandonment fund
  - Excess profit tax
  - Fiscal/contractual ring-fences
  - Dividend withholding tax
  - Indirect taxes
  - Sample cash flow
- Historical background
- JVs
- PSCs
  - Original 1994 model terms