Benin Eyes Return to Oil Production in 2014 after Lost Decades
COTONOU, Oct 24 (Reuters) - Benin's government said on Thursday it hoped oil production would restart in the West African nation next year in blocks controlled by South Atlantic Petroleum (SAPETRO) from neighbouring Nigeria.
Cotton-dependent Benin, a tiny neighbour to the west of oil-giant Nigeria, started producing oil in the 1970s but output remained low and stopped by the end of the 1990s when funds for operations dried up.
"Talks are under way to secure the final signature so that production can start by July 2014 at the latest," said Barthelemy Kassa, Benin's minister for mines and energy.
Speaking after talks with Benin's President Boni Yayi on Thursday, Daisy Danjuma, vice president of SAPETRO, said the firm was sitting on 87 million barrels of oil in Benin's onshore Block 1 and output could start at 7,500 barrels per day.
SAPETRO has a further 110 million barrels of oil in the Seme offshore block to the east of Cotonou but production from there would was not be expected before 2015, Kassa added.
SAPETRO was set up by Danjuma's husband, former Nigerian chief of army staff General T.Y. Danjuma. It owns oilfields in Nigeria in joint ventures with France's Total and China's CNOOC.
It also bid last month for Chevron's stake in three blocks in the Niger Delta, according to sources involved in the sales.
Benin's economy depends heavily on cotton, which provides a livelihood for some 500,000 families in a country of around 10 million people.
London-listed Tullow Oil is also exploring for oil in Benin, where it has four blocks.
In a sign of the risks of operating in the region, Benin has borne the brunt of the shift west of gangs of pirates that previously operated in Nigeria's waters.
The government said that hikes in insurance premiums after attacks off Benin in 2011 led to a 70 percent drop in traffic to Cotonou port, which is a key source of cash for the government.
(Writing by David Lewis; editing by James Jukwey)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Total CEO: US Shale Oil Industry To See Wave Of Investment (Oct 18)
- Total's CEO Says Will Try To Move Ahead With Iran Gas Project (Oct 17)
- Total Expands Presence in Mexico (Oct 12)
Company: Tullow Oil more info
Operates 1 Offshore Rigs
- Tullow Oil Signs Exploration Contracts Offshore Ivory Coast (Oct 11)
- Britain's Tullow Launches Oil, Gas Exploration In Zambia (Aug 11)
- European Oil Producers' Weak Hedging Shows Bet on Price Rebound (Jul 31)
Company: CNOOC more info
- CNOOC Completes Test Runs at Huizhou Refinery in Guangdong - Report (Oct 09)
- Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
- China's CNOOC Begins Oil Partner Hunt in Mexico Deep Waters (Sep 15)
Company: South Atlantic Petroleum Ltd. more info
- Benin Eyes Return to Oil Production in 2014 after Lost Decades (Oct 24)
- NNPC Greenlights EPC Awards for Egina (Jun 21)
- CNOOC Acquires 45 % Stake in OML 130 Offshore Nigeria (Jan 09)