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Eni to Invest on Non-Conventional Oil in Congo

05-20-2008

Eni SpA signed a deal with Congo Republic for exploration and development of Tar Sands. Studies of a 100-square-km (39-square-mile) section of the deposits at Tchikatanga and Tchikatanga-Makolas indicate recoverable reserves of between 500 million and 2.5 billion barrels, Eni said in a statement. The deposits cover 1,790 square km (690 square miles).

"I believe that the opening of this new front for non-conventional oil in Africa could be an extraordinary event, a new frontier," Chief Executive Paolo Scaroni told reporters at the signing.

Eni has about 7 billion barrels of reserves. Eni will invest 3 billion euros ($4.68 billion) in the Republic of Congo from 2008 to 2012 and will generate equity production of 150 million barrels of oil equivalent, the statement said.

As part of the spending, it will invest in a biofuels programme and become a 20 percent shareholder in a 450-megawatt power station near the Djeno oil terminal.

Scaroni also said the Western consortium it heads aims to complete details of an accord soon with Kazakhstan on the giant Kashagan oil field.

The two sides initialled an agreement in January but the Kazakh energy minister said last week that it could impose sanctions if the consortium decides to delay production.

Scaroni said late on Sunday that Eni would increase its crude oil output from the Republic of Congo this year by 30 percent, from production of 80,000 barrels a day.

Eni is the second-biggest oil producer in the Republic of Congo after France's Total SA.

Congo Republic expects its crude oil production in 2008 to rebound to 105 million barrels, more than 20 percent up on last year's output of 238,000 bpd. Output in 2007 was reduced by a platform fire in Total's Nkossa field.

Republic of Congo ranks behind sub-Saharan Africa's biggest oil producers Nigeria, Angola and Equatorial Guinea, and its reduced 2007 production also lagged behind neighbouring Gabon. (Reporting by Giancarlo Navach and Christian Tsoumou; editing by Rory Channing)