The government of Nicaragua signed an exploration and production agreement with Infinity Energy Resources on March 5, 2009, according to a report from Reuters. The contract is for the exploration of two separate licenses 40 miles off of the east coast of Nicaragua in the Caribbean Sea.
According to the agreement, Infinity will invest $30 million in exploration projects. The company will have exploration rights for six years, and if Infinity strikes oil, it will earn 30 years of production rights.
"I hope we, too, will have oil, regardless of what the prices are," said Nicaraguan Energy Minister Emilio Rappaccioli at a news conference.
Currently with no oil production, Nicaragua is dependent on fuel imports. Despite this, the exploration agreement was stalled by, but ultimately overcame, legal objections from local indigenous groups.
According to Infinity's website, the Texas-based company was awarded the Caribbean concession in May 2003; and in May 2005, the company completed a development and production contract. Additionally, seismic interpretation to determine future exploration on the 1.4 million acre license commenced in 2007.
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