Niger has awarded nine production sharing agreements to five exploration companies that will seek to follow the lead of China National Petroleum Corp., which established the country’s first hydrocarbon production in late 2011.
Niger’s council of ministers approved four PSCs for International Petroleum Ltd., Perth. They are the Manga 1, Manga 2, Aborak, and Tenere Ouest blocks.
Nigerian companies received four blocks. Labana Petroleum was awarded the Dibella 1 and Dallol blocks, Sirius Energy took the Grein block, and Advantica Gas & Energy got Mandaram 2. Genmin of Bermuda won Djado 1.
IPL expects its PSCs to be signed before the end of the third quarter of 2012. Exclusive exploration authority is granted for an initial 4 years and can be renewed twice for 2 years each for a maximum tenure of 8 years.
If a commercial deposit is established, an application is made for allocation of an exclusive development authorization with an initial duration of up to 25 years and renewal for a maximum of 10 years, IPL said.
Minimum work program in the initial 4 years is to conduct a gravity and magnetic survey, reprocess and reinterpret existing seismic lines, shoot and interpret new 2D seismic, and conduct exploratory drilling.
IPL’s blocks are in southeastern Niger in the West African rift subsystem, a component of the Western Central African rift system. The blocks include parts of the Termit and N’Dgel Edgi rift basins that contain continental to marine Early Cretaceous to Recent clastic sediments.
The areas of the blocks are Manga 1 12,900 sq km, Manga 2 11,490 sq km, Aborak 24,640 sq km, and Tenere Ouest 21,920 sq km.
IPL’s blocks lie west of and adjacent to the Agadem and Tenere blocks owned and operated by CNPC. IPL noted that CNPC started up the Agadem integrated oil production and refining project in November 2011 in which oil produced on the Agadem block is shipped through a 463-km pipeline to a 20,000 b/d refinery at Zinder, Niger, about 75 miles north of the border with Nigeria.
Agadem represents Niger’s first sustained commercial oil production.
The Zinder refinery produces gasoline, diesel, fuel oil, and LPG for domestic use first and exports as available.
CNPC’s Tenere block covers the northern part of the Termit-Tenere rift basin in eastern Niger. The Termit-Tenere rift basin is one arm of a series of rift basins that extend across north-central Africa. Similar basins in Libya, Chad, and Sudan are producing oil.
CNPC has made a series of oil and gas discoveries with several hundred million barrels of proved and probable reserves on the Agadem block, which covers the southern half of the Termit-Tenere rift, IPL said.
Meanwhile, the Grein block lies north of CNPC’s Tenere block, and Dibella is east of CNPC’s Bilma block. Mandaram 2 is west of IPL’s Manga 1 and 2 blocks. Dallol is in southwestern Niger along the Nigerian border, and Djado 1 adjoins Niger’s borders with Algeria and Libya. Numerous blocks remain unlicensed in Niger.