Two US Cos to Explore for Oil and Gas Off Nicaragua Coast

MANAGUA, Mar 31, 2006 (Dow Jones Commodities News via Comtex)

Two U.S. companies will invest $100 million to search for oil and natural gas off Nicaragua's Caribbean coast, officials said Thursday.

The exploration concessions were granted to Kansas-based Infinity Energy Resources Inc. (IFNY) and Louisiana's MKJ Exploraciones SA, said Donald Espinoza, director of hydrocarbons for the Nicaraguan Energy Institute.

MKJ will explore some 8,000 square kilometers (3,100 square miles) in the Isabel and Tyra areas, and Infinity will search in a 6,000-square-kilometer (2,300-square-mile) region, including a portion of Tyra and an area known as Perlas, Espinoza told Channel 63 television.

"There are strong indications of the presence of oil and natural gas, but we need to confirm whether there are commercial quantities," Espinoza said.

Before they exercise their 30-year concessions beginning at the end of the year, the companies must present environmental impact reports, he added.

Another U.S. company, Industrias Oklahoma Nicaragua SA, is already drilling onshore wells in a 3,400-square-kilometer (1,300-square-mile) area near the Pacific coast.

Espinoza said the government plans to seek bids in 2007 for the exploration of an additional 74,000 square kilometers (29,000 square miles) in the Caribbean.

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