Cameroon awards first oil licence on Bakassi

On 15 June, the government-managed National Hydrocarbons Corporation (SNH) awarded its first petroleum exploration contract on the previously contested Bakassi peninsula. The production-sharing contract for Bakassi West was awarded to a consortium led by Dana Petroleum (a subsidiary of the Korean National Oil Company), which heads a consortium of four firms.

The four-year agreement, worth US$31 million and could be extended by a further two-year period to increase to the tune of US$71 million, will be operated by Dana, with equity interests held by Canada's Madison Petrogas and Cameroon's Soft Oil & Gas Ltd.

The ceremony was overseen by Cameroon's Minister of Mines, Industry and Technological Development Emmanuel Bonde, while the accord was signed for Cameroon by the Executive Manager of SNH Adolphe Moudiki and Dana's country manager John William Downey.

The contract authorises the consortium to acquire, process and interpret seismic 2D data and the drilling of two exploration wells.

Thought to be rich in oil, Bakassi was under Nigerian control for at least 15 years until 2008, when the peninsula was returned to Cameroon following an October 2002 ruling by the International Court of Justice. Although Nigeria has accepted the ruling, the area has faced pockets of resistance from armed splinter groups undermining Cameroon's authority there.

The groups have severally captured Cameroon troops and foreigners operating in Bakassi, urging Cameroon and governments of the captives to pay ransom. In 2010, Cameroon fortified the area with the anti-terrorist Rapid Intervention Battalion, causing a reduction in the groups' activities. Operating under the moniker Bakassi Freedom Fighters (BFF), the groups have not been entirely deterred, however, and made their last attack in October 2011, killing two Cameroonian soldiers.

For more news and expert analysis about Cameroo, please see Cameroon Politics & Security.

© 2012 Menas Associates

Dana discovers new oil field onshore, Gulf of Suez

Dana's Fin-1X exploration well has discovered a new oil field, in the North Zeit Bay Production Sharing Contract (PSC) area onshore in the Gulf of Suez. The new discovery follows the finding of the Lorcan oil field, made last month in the same PSC area. The Fin-1X well drilled to a depth of 10,038 ft, approximately 3km from the Lorcan discovery, promises good quality oil bearing sands in the Kareem formation.

The Fin discovery together with Lorcan, which flowed at 4,714 b/d confirms that the area will be lucrative in terms of development and production. A preliminary development chart has been submitted to the Egyptian General Petroleum Corporation (EGPC) for approval, and according to Dana's estimates that these two discoveries have proven up initial reserves of 10-12 million barrels of oil.

Once all the plans are approved by the EGPC, and the Egyptian Ministry of Petroleum and Mineral Resources, Dana intends to negotiate early oil production with EGPC. The full development plan is to tie production from this PSC area back to the East Zeit oil and gas processing plant, which is situated just 15km to the south east of the Lorcan and Fin oil fields. Drilling on the North Zeit Bay concession will also continue in 2011.

To find out more about Dana Petroleum please visit Dana Petroleum's, web site which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Dana Petroleum signs agreement with BG to acquire 50 per cent interest in the El Manzala

Dana Petroleum has signed an agreement with BG to acquire a 50 per cent interest in the El Manzala concession, located in the Mediterranean Sea, offshore Egypt. The concession is a large production sharing contract (PSC) area, covering some 630sq km, situated in the offshore Nile Delta region.

Dana will finance the cost of the next exploration well up to an agreed cap in order to earn the 50 per cent interest. The company has assessed that this area is prospective in both the Pliocene play, analogous to Dana's two gas discoveries in the West El Burulus concession (WEB-1 and Papyrus), as well as having further potential in the deeper high pressure horizons. The deal is subject to standard regulatory procedure, and will add significantly to Dana's expansion in Egypt's offshore Nile Delta region.

“We look forward to working with BG, 50/50 in this large concession in the eastern part of the Nile Delta, with a plan to drill in early 2011. This further extends Dana's strategic position and growth opportunities across Egypt, where we are already 50/50 partners with Gaz de France in the western area of the Nile Delta, together having made two gas discoveries with our first two wells at WEB-1 and Papyrus. Dana is also 50/50 partners with Apache in the Western Desert where the group has made, and successfully brought onstream, several oil discoveries," said, Dana's chief executive, Tom Cross.

To find out more about Dana Petroleum please visit Dana Petroleum's web site, which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates