South African oil exploration and production firm SacOil announced Tuesday that the government of the Democratic Republic of Congo has granted a 'Presidential Ordinance' to Total E&P RDC for its interest in 60 percent of Block III.
The approval means that a work program approved by the Block III Operations Committee (OpsCom) for 2012 will now begin in the next few weeks.
The initiation of the work program follows extensive work undertaken by Total over the past six months. An 'airborne gravity and magnetic feasibility' study as well as satellite imagery of the topography, physiography and vegetation of the block was completed in order to provide a geo-referenced numerical model for future operations in the block.
A budget to the end of 2012 of $30 million has been approved by the OpsCom and will fund the initial work program. An airborne gravity and magnetic survey, as well as the acquisition of a 2D seismic exercise on the northern area of the Block III located outside the Virunga National Park, will be done during 2012.
This seismic survey will estimate the properties of the rock and map the potential oil and gas prospects. Subject to positively identifying structures that may contain oil and gas, Total intends to drill an exploration well, which will determine the oil and gas potential and commercial viability of Block III.
Following the farm-out of Block III to Total in March 2011, SacOil is carried for the entire work program and will not be required to contribute any further capital into this project until final investment decision, which is when a development plan is put in place.
"The granting of the ordinance is a significant step for progressing the asset in that the required testing and evaluation of the oil and gas prospects can begin in earnest. We believe that there is huge potential in this asset due to the neighboring oil and gas discoveries in Uganda which suggest that Block III is in an attractive and hydrocarbon prospective address. We look forward to positive test results," said Robin Vela, SacOil's chief executive officer.
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