Under the terms of the agreement PetroCanada Mellita Inc., a wholly owned subsidiary of PetroCanada, will become operator and will fund 100% of the cost of an exploration program, up to US$13.5 million, in return for a 72.5% interest in the 845,000 acre permit. The exploration program will consist of up to 2274 km of 2D marine seismic, 75 km of 2D land seismic and the drilling of two exploration wells; one offshore and one on Djerba Island. This transaction is subject to final approval by the Tunisian authorities.
ETAP, the Tunisian State Oil Company, has the right to elect to participate for up to 50% in the development of any discoveries made on the permit. In the event of a discovery, Centurion and PetroCanada would be reimbursed for exploration costs equal to ETAP's participating interest and ETAP would pay its share of future development costs.
The land seismic has already been acquired and the marine seismic program is currently underway with completion expected during the first week of September. Following processing and interpretation of the seismic, drilling locations will be selected and drilling is likely to be conducted as early as the first half of 2004.
Said Arrata, President and CEO of Centurion stated that "Centurion is pleased with the opportunity to explore our offshore Tunisian block jointly with one of the largest fully integrated Canadian oil companies, and we look forward to a successful joint operation with PetroCanada in Tunisia."
In commenting on the signing, Norm McIntyre, President of Petro-Canada said "PetroCanada's strategy is to expand its international business through the acquisition of assets in which we have a significant working interest and, where possible, as operator. The Mellita opportunity is an excellent fit with this strategy and adds new exploration in North Africa, one of our existing core areas of activity."
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