Turkmenistan Signs Gas, Oil Agreement

The Chalyk Energy company plans to spend US$140 million (euro105 million) to drill 12 oil wells up to 3,600 meters (nearly 12,000 feet) deep in the southeastern town of Iolotan, the presidential press service said in a statement.

Niyazov said last month that the Iolotan fields contained an estimated 7 trillion cubic meters of natural gas, adding to the Central Asian state's proven commercial reserves of 2.8 trillion cubic meters.

Last month, Turkmenistan invited the China National Petroleum Corp. to participate in the development of the Iolotan fields. The CNPC plans to invest US$152 million (euro115 million) in tapping the fields.

Turkmenistan possesses the second-biggest gas reserves among all ex-Soviet republics, after Russia, and its resources are playing an increasingly important role in regional geopolitics.

In April, Turkmenistan concluded an agreement to build a gas pipeline to China. Currently Russia's state gas giant Gazprom controls the only transit route for Turkmen gas exports.