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RWE Dea to Start Drilling on Area 58 in Libya

01-25-2008

RWE to spend at least $76 million and drill two exploration wells in blocks it won in a gas bidding round last month, Libya's National Oil Corporation (NOC) said.

RWE Dea was awarded permits to explore in the blocks 1, 2, 3, and 4 at area 58 in Syrenica basin in the north African country's first gas-focused exploration licensing round since the lifting of international sanctions.

RWE's share in the project agreement is 3% with the rest going to NOC, although the German company's share will fall once commercial production begins and continue falling as it grows, NOC said.

At a signing ceremony in the Libyan capital, RWE also agreed to pay a signature bonus of $5 million one month after the agreement was signed.

The gas round followed three previous exploration rounds focused on oil since the sanctions were lifted after Libya scrapped its prohibited weapons.