Nigeria grants approval for Nexen to farm-in offshore block

Dec 30, 2003 01:00 AM

The Federal Government of Nigeria gave Sovereign Oil and Gas approval for the farm-in of a wholly owned subsidiary of Nexen of Canada into Oil Mining Lease (OML) 115 offshore Nigeria. OML 115 is owned by Oriental Energy Resources, a leading Nigerian oil independent. Sovereign is Technical Advisor to the company.
OML 115 covers around 61,000 acres (248 sq km) located in shallow water 35 miles (55 km) offshore Nigeria's prolific south-eastern producing area. The primary reservoir objective is the Qua Iboe sands that have accumulated multi billion-barrel reserves of high quality crude oil in nearby fields offsetting OML115.

Sovereign's President Joseph M. Bruso, Jr. said, "OML 115 is located in one of the richest oil tracts in the world. The block lies at the centre of a 1.2 mm-acre tract with over 7 bn barrels of proven oil reserves. The area produces over 1 mm bpd of oil."
Under the terms of the farm-in deal, Nexen will have a 40 % participating interest, assume the role of Technical Advisor to Oriental, and fund 100 % of the costs of a new 3D seismic programme and the drilling of up to three exploration wells. Oriental retains a 60 % participating interest, and will serve as Operator.

Renewed interest in OML 115 began two years ago when Sovereign commenced mapping of OML 115's existing 2D and 3D seismic data. This initial exploration effort revealed new large-potential oil reserves within the Qua Iboe interval in subsurface traps located in around 150 feet of water.
"Based on Sovereign's regional experience and our latest 3D seismic mapping, we believe several 100 mm barrels of new oil reserves are likely on OML 115," said Bruso. "Sovereign's technical staff discovered, named, and helped develop the nearby super giant Zafiro Field with over 1.2 bn barrels of reserves, and still growing," said Bruso, "So, we know the look and feel of what works geologically in this part of offshore West Africa.”

"Sovereign also assisted Oriental with initialling farm-in negotiations for the adjacent Okwok Field in OML 67, owned by the Nigerian National Petroleum Corporation (NNPC) and ExxonMobil.”
"OML 115 will be a low cost project, with these Qua Iboe reservoirs located offshore in shallow water at easy drilling depths," added Bruso. "We are pleased to have Nexen join the project with their experienced offshore Nigerian operating team and their plans for fast tracking OML 115 to early production."

It is expected that the block-wide new 3D seismic programme will begin in OML 115 as soon as possible, subject to seismic vessel availability, with one or more exploration wells planned in 2004.
Sovereign Oil & Gas Company is a privately held, Houston-based company providing access to capital, technology and industry partners for national and independent oil companies outside North America.

Source: Vanguard
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