Ramco & Hellenic Form JV to Explore Offshore Montenegro

Ramco Energy and Hellenic Petroleum have formed a joint venture for the exploration of their extensive acreage offshore Montenegro. Ramco has been involved with the Ulcinj block in the Adriatic since 1998, when through its Medusa subsidiary it entered into a contract with the Montenegrin State Oil Company, Jugopetrol Kotor (JPK). The original contract between Ramco (51%) and JKP (49%) led to the acquisition of new seismic data, in 2000 to supplement the extensive existing seismic and drilling data from earlier exploration activity. The interpretation of this data led to the identification of a number of potentially significant oil and gas leads and was a key factor in Hellenic's decision to acquire an interest in JPK.

Hellenic acquired a majority share of JPK following last year's privatization process and their involvement comes at an important stage in the exploration process, as a substantial number of sizeable prospects are being risked and prioritized and a future work program agreed. Under the original contract Ramco was responsible for funding the exploration program until a declaration of commerciality. In order to accelerate the exploration program Ramco has agreed to transfer an 11% interest in the contract to JPK for a pro rata share of past costs and JPK has agreed to fund its share of future costs after the first well has reached its target depth and a decision made to test.

This year's work program includes the acquisition of around 200 sq km of 3D seismic over a shallow water area of high potential, thought to be gas bearing. This would be followed in 2004 with a well to test the structure. There is an option for a further Ramco funded exploration well if required.

Stephen Remp Ramco's Executive Chairman said: "We are delighted that Hellenic is our new partner in Montenegro. Our own extensive technical studies supported by recent gas discoveries and developments in the region reinforce our positive view of the block. The involvement of Hellenic, a company with considerable technical expertise combined with the regional knowledge and experience of JPK will be a catalyst to accelerate the activity in this high potential acreage."

Athanassious Karachalios Hellenic's Managing Director and CEO, added: "Our co-operation with Ramco, a company with such caliber, indicates once more our continuous efforts to accelerate our involvement in the area of hydrocarbon exploration and exploitation. This, in addition to our participation in other similar projects, strengthens our confidence to meet the target of obtaining at least 80 million barrels of proven reserves by 2006".

Both companies welcomed the statement of the Minister of Economy Mr. Darko Uskokovic "This project is very important for Montenegro. The Government of Montenegro and Ministry of Economy are committed to supporting the implementation of this project. If the results are positive an acceleration of progress of the Montenegrin economy is expected and this will foster Montenegro's joining the EU".


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