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Africa Oil Corp. Begins Puntland Somalia Seismic Survey

05-24-2008

Africa Oil Corp, a Canadian based oil and gas company has begun seismic mapping of Puntland Somalia.

The company expects a strong prospect of encountering hydrocarbons like across Golf of Aden in Yemen. The predecessor of ConocoPhilips, Conoco, had exploration rights in the semi-autonomous northern Puntland area before the 1991 civil war that plunged the Horn of Africa nation into anarchy, which is now relatively in peace.

Africa Oil has rights to 80 percent of the Nugaal and Dharoor blocks there, with its joint venture partner, Australian independent Range Resources, holding the remainder.

Africa Oil is obliged to spend $50 million on exploration to obtain full rights to the 80 percent, and it has the right to farm out 20 percent of that stake to third parties with the agreement of Range Resources.

Puntland's government in January 2007 entered into a production-sharing agreement with the two companies.

The site is a humid, barren area of about 2,600 sq km (1,004 sq miles) near Dharoor town, some 350 km (217 miles) east of the port of Bosasso on the Gulf of Aden.

"The exploration will run until December when we hope to start drilling for oil. We have heavy equipment to conduct a 2,500 sq km seismic survey," Kim Watson, company official said. A hundred local people have been employed in the operation, he said.

Watson also said they have carried out a similar survey in nearby Nugaal region. Both Range and Africa Oil have been given access to seismic data collected before 1991, and have expressed optimism they will strike oil.

In 2007, Puntland faced stiff opposition from the internationally recognized interim Somali government, part of which refused to honor a 2005 deal reached with Range giving it exclusive concession rights over the blocks.