Block-1 is within Turkmenistan’s section of the Caspian and has estimated reserves of 2 billion barrels of oil and 10 trillion cubic feet of gas.

The Business Times, citing an anonymous Petronas official, said, “Petronas intends to begin trial productions by mid-2005 [and] we are working on that pace.”

“This year, Petronas plans to drill three new wells. This stems from an agreement with Turkmenistan on exploring and developing three offshore fields, namely Gubkin, Zhdanov and Livanov.

“We were awarded the blocks in the Caspian Sea quite sometime ago,” added the insider, referring to the fact Petronas signed a PSC with Turkmenistan to conduct E&P operations in the Caspian Sea in 1996.

While the source did not elaborate further, it is understood the firm plans to invest around US$130 million to explore Turkmenistan’s section of the Caspian Sea Shelf.

In related news, Turkmenistan President has invited Petronas to take part in a pipeline project which will see around 30 billion cubic metres per annum of natural gas being transported to Europe via Russia and the Ukraine.

The project is expected to cost US$1.5 billion.

According to the informant, “The national oil company is looking at the proposal but has not made any decisions.”