Austrian OMV to acquire interest Block 5A in Sudan

Jun 17, 1997 02:00 AM

June 3, 1997 International Petroleum Corporation has reached an agreement with Austrian OMV Aktiengesellschaft (OMV) whereby OMV will acquire a 27.5 % interest in IPC's Block 5A project in Sudan, subject to final government approvals.
On February 6, 1997, IPC signed an Exploration and Production Sharing Agreement with the Sudanese government over Block 5A. As previously announced, Petronas Carigali Sdn Bhd (Petronas) has a pending assignment of a 30 % interest in the block. Once all government approvals are obtained, the partners will together assign a 5 % interest to Sudapet (a Government of Sudan owned company) bringing the final interest distribution to: IPC 40.375 percent, Petronas 28.5 percent and OMV 26.125 percent. IPC will continue to act as operator for the group.
Block 5A is located adjacent to and on the same geological trend as the block currently being exploited by a consortium of companies made up of Petronas, Chinese National Petroleum Company (CNPC), State Petroleum (a subsidiary of Arakis Energy) and Sudapet. Several recent discoveries, including that recently announced at Umm Sagura (less than 20 km from the Block 5A boundary), have dramatically increased the prospectivity of the area. Proven oil reserves are now estimated to be between 600 to 800 mmb. The consortium has recently signed a pipeline agreement with the Sudanese Government which provides for approximately 100,000 bopd pipeline capacity to be made available to third party users. The 1,540 kilometre pipeline is expected to be completed by the end of 1999 and will have a total capacity of a least 250,000 barrels of oil per day.
IPC's current plans in Block 5A are to commence a 1,350 km seismic survey later this year to help better define and upgrade prospects in preparation for the 1998/1999 drilling season. A minimum of 2 exploration wells are required under the terms of the Exploration and Production Sharing Agreement.

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