Loon originally announced its award of the exclusive right to negotiate a PSC covering Block 9 on June 1, 2006 and today's signing was the culmination of a lengthy process of negotiation that followed the original award. As part of the signing process, Loon has posted a bank guarantee of US$7.5 million.
Block 9 is a large and under-explored area located at the northern edge of a hydrocarbon-producing basin called the Homs Basin, which contains the large Palmyra, Cherrife Da and Ash Shaer fields. Despite its proximity to substantial oil and gas reserves, Block 9 contains only two exploration wells, one drilled in 1977 and the other in 1995. The area of Block 9 is approximately 43 square kilometers smaller than originally awarded as a two-kilometer strip of land along the coast, together with the city limits of Latakia, has been excluded from the original contract area.
Under the terms of the Block 9 PSC, Loon has a first phase exploration period of four years during which it has committed to acquire 600 kilometers of 2D seismic and drill two exploration wells. The exploration period can be extended for up to nine years in phases by performing additional work on an agreed basis.
Loon has a 100% interest and is the operator of Block 9. ANSCO Inc., subject to the approval of the Ministry and SPC, has the right to acquire a 5% working interest in Block 9 on a heads-up basis.
Loon is an international oil and gas exploration and production company having direct interests in Brunei, Syria, Colombia, Peru, Tunisia and Slovenia and an indirect interest in Pakistan through its shareholding in Jura Energy Corporation. Loon has offices in Calgary, Alberta, Canada, Dubai, United Arab Emirates and Bandar Seri Begawan, Brunei Darussalam.
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