Lukoil Spuds Second Well on Egyptian Shelf

Lukoil has started drilling its second exploration well at North-East Geisum offshore block in the Gulf of Suez in the Red Sea.

The well is being drilled by GlobalSantaFe's jackup, GSF Rig 124. The well will take approximately 45 days to be drilled. The target well depth is 1574 meters.

Lukoil Overseas was granted the right to operate on North-East Geisum, as well as on the neighboring West Geisum block in January 2003, based on the open tender arranged by the Egyptian General Petroleum Corporation (EGPC). A concession agreement between Lukoil Overseas and the Egyptian Ministry of Oil was signed in June 2003. The first exploration well in North-East Geisum was drilled at the end of 2004, having shown the presence of hydrocarbons in the cross-section.

The total in-place reserves of both blocks are estimated at 261 million barrels of oil (on average). Two oil and gas prospects have been identified within the blocks. The total area of the blocks is 132 square kilometers.

The exploration program for both blocks covers a period of four years and particularly includes drilling of four exploration wells in the second work stage. The initial minimal exploration investment program is planned at US $27.8 million.

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