Lukoil Completes Acquisition of Three Oil Properties Off West Africa

MOSCOW. Oct 22 (Interfax) – Lukoil (RTS: LKOH) has completed acquisition of three exploration blocks in the Gulf of Guinea off West Africa, Vice President Leonid Fedun said.

Fedun did not disclose details of the deal, but said the properties had cost several hundreds of millions of dollars. The blocks, which are located in very deep waters, are believed to contain large reserves.

It was earlier reported that Lukoil Overseas, the operator of Lukoil’s international projects, signed an agreement with American oil and gas company Vanco Energy to acquire a 56.66% share in three exploration projects on prospective offshore blocks in the Gulf of Guinea (West Africa) in April.

Two blocks, CI-101 and CI-401, are located offshore Cote d’Ivoire and Cape Three Points Deep Water block is located offshore the Republic of Ghana. Like block CI-205 (Cote d’Ivoire) acquired in 2006, all the three blocks are located in the deepwater area of the Gulf of Guinea 50- 100 kilometers from the coast and from the geological point of view are confined to the Tano basin, where the presence of commercial oil and gas has been proven.

The total area of the blocks is about 15,000 square kilometers and water depth within the blocks ranges from 200 to 3,000 meters. State petroleum companies, PETROCI Holding (blocks CI-101 and CI- 401, Cote d’Ivoire) and Ghana National Petroleum Company (Cape Three Points Deep Water block, Ghana), are parties to the contracts each with a 15% share.

Exploration of blocks CI-101 and CI-401 is carried out under the Production Sharing Agreement signed in September 2005. The exploration period is 5.5 years and includes acquisition and reprocessing of existing 2D seismic data, additional 2D (completed as of now) and 3D seismic surveys, as well as drilling of one exploration well on each block. Exploration on Cape Three Points Deep Water block is carried out under the Petroleum Agreement signed in August 2002. The exploration period is 7 years and includes reprocessing of existing 2D seismic data and 2D and 3D seismic surveys (completed as of now). In 2008, drilling of one exploration well is planned on the block.

Lukoil Overseas signed an agreement to acquire a 63% stake in a PSA to explore and develop the CI-205 deep-water block off Cote d’Ivoire last July.

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