By OGJ editors
HOUSTON, Jan. 17 -- The indigenous Cameroon company EurOil Ltd., a wholly owned subsidiary of UK-based BowLeven PLC, signed a joint venture agreement Jan. 14 with Tulsa-based Syntroleum Corp. to negotiate a joint production sharing agreement with Cameroon for natural gas-condensate production from Block MLHP-4 off Cameroon.
The agreement, pending successful negotiations with the government, also calls for joint assessment, development, and gas production from Sanaga Sud field, which lies within the block.
The two companies bid for the block in mid-2002 under Cameroon's New Petroleum Code, securing the right to negotiate the license. EurOil received the formal notice of acceptance in December.
Sanaga Sud field is in the Douala/Kribi-Campo offshore basin, 20 km northwest of Kribi. Mobil Producing Cameroon Inc. drilled the discovery in 1979 and appraised it in 1981 with two additional wells. However, the lack of gas markets precluded any further drilling activity on Block MLHP-4 since then.
Productive intervals for the field fall at 1,000-1,600 m subsea in water less than 20 m deep. Sanaga Sud field's recoverable gas is estimated at more than 600 bcf, said Mobil New Exploration Ventures Co. in a 1992 paper published by the American Association of Petroleum Geologists.
Terms of the JV agreement call for Syntroleum and EurOil each to have a 50% working interest in Block MLHP-4 and to share equally in the cost of assessing and developing the block, extracting gas liquids, converting the gas to liquids, and developing other possible natural gas applications such as electric power generation or iron ore smelting.
Syntroleum, with support from EurOil, will complete a gas reserve and project assessment study for a proposed gas-to-liquids plant in Cameroon to utilize gas produced from the block. Phase 1 would involve analysis of previous data developed for the block to determine the reserves in the field.
The two parties intend to complete the negotiation and execution of a joint operating agreement by mid-2003. Assuming successful production-sharing negotiations, EurOil will be designated operator of Block MLHP-4, but Syntroleum said it would retain the option to be named operator subject to certification by the Cameroon government.