Nexen Inc., Calgary, the former Canadian Occidental Petroleum Ltd., signed a memorandum of understanding for a production sharing agreement for Yemen Block 59.
If all goes as planned, this will be Nexen's seventh block in Yemen. Block 59 is near the Yemen-Saudi border, 250 km north of Nexen's Masila block, which is producing 230,000 b/d of oil.
Nexen will operate the block with 60% and Occidental Petroleum Corp. will hold 40%.
Nexen said it is the most active oil company in Yemen, with more than 23 million undeveloped acres. "Much of this acreage is along Yemen's northeastern border where we are targeting large Paleozoic plays similar to those producing in Saudi Arabia," said a statement.
Executive Vice Pres. and Chief Operating Officer Charlie Fischer said the company plans to shoot 1,000 km of seismic and drill one well on Block 59. "We are currently shooting seismic on our other blocks near the Yemen-Saudi border and are mobilizing a fourth rig in Yemen in the second quarter focussed exclusively on exploration drilling. We will capitalize on this ongoing activity to accelerate our evaluation of Block 59."