As a result of the farm-in to Blocks L6, L8 and L9 held by Afrex Limited and Pancontinental Oil & Gas NL, Woodside will hold a 50% interest and operate those blocks on behalf of the joint venture. Afrex will have a 30% interest and Pancontinental 20%.
Woodside will earn its stake by carrying the cost of acquiring 2,000 kilometers of 2D seismic in the initial phase of the exploration program. This is estimated at US $1.25 million and will take Woodside's total Kenyan investment to about US $4.25 million. The farm-in is subject to ratification by the Kenyan Government.
The blocks cover predominantly offshore acreage in water depths up to 1,500 meters. The blocks also contain some coastal onshore acreage.
The farm-in follows Woodside's entry in May 2003 to four other Kenyan blocks – L5, L7, L10 and L11 – in a transaction with Dana Petroleum (E&P) Limited, a wholly owned subsidiary of Dana Petroleum plc, and Star Petroleum International, a wholly owned subsidiary of Global Petroleum Limited. Woodside has a 40% interest and is operator of these blocks.
Under both transactions, Woodside's commitment is limited to the acquisition of offshore 2D seismic. Both joint ventures have the option of entering the second exploration phases which would include exploration drilling in each of the blocks renewed.
Seismic acquisition across all seven blocks is under way and is expected to be completed before the end of 2003. Woodside's Director of New Ventures, Agu Kantsler, said the latest farm-in provided Woodside with at a relatively low-cost entry to additional exploration targets in this under-explored region which the company could mature by using its strong technical skills and by leveraging from its success in deepwater off Mauritania and the Gulf of Mexico.
"The addition of the seismic survey in these blocks to our current seismic contract will provide economies of scale in operations and our technical evaluation which will benefit both of the Woodside joint ventures and Kenya," Dr. Kantsler said.
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