PRODUCTION SLATED FROM TWO FIELDS OFF COTE D'IVOIRE

Aug. 8, 1994
Cote d'Ivoire has agreed to buy gas from companies developing Block CI-11 to generate electricity following a major power sector conversion and expansion. Block CI-11 operator UMIC Cote d'Ivoire Corp. (UMIC) and partners for 1 year beginning in fourth quarter 1995 will sell the government of Cote d'Ivoire at least 20 MMcfd of gas. Beginning in the second year and through the seventh year of the agreement, Cote d'Ivoire will take or pay for at least 50 MMcfd. UMC is a unit of

Cote d'Ivoire has agreed to buy gas from companies developing Block CI-11 to generate electricity following a major power sector conversion and expansion.

Block CI-11 operator UMIC Cote d'Ivoire Corp. (UMIC) and partners for 1 year beginning in fourth quarter 1995 will sell the government of Cote d'Ivoire at least 20 MMcfd of gas. Beginning in the second year and through the seventh year of the agreement, Cote d'Ivoire will take or pay for at least 50 MMcfd.

UMC is a unit of United Meridian Corp. (UMC), Houston.

The gas is to come from Block CI-11's Lion and Panthere fields, both about 8 miles offshore. The Block CI-11 group late last year disclosed the Panthere gas-condensate discovery and earlier this year the Lion oil and gas discovery.

A gas sales agreement calls for UMIC and partners to receive about $1.70/Mcf during the first 4 years, after which the purchase price will be adjusted based on the price of West Texas intermediate crude oil.

In the development plan for 335,000 acre Block CI-11, partners originally proposed laying a 10 in. pipeline to deliver gas to the capital city, Abidjan.

The government of Cote d'Ivoire tentatively agreed to the proposed plan, but because of expected additional gas markets, Block CI-11 partners agreed to increase the size of the line to 14 in.

With added compression, the larger line could transport as much as 90 MMcfd of gas.

Block CI-11 partners and Lion and Panthere holdings are operator UMIC with 25% and 28% interests respectively, national oil company Ste. Nationale d'Operations Petrolieres de la Cote d'Ivoire 40% and 10%, International Finance Corp. 15% and 26%, Global Natural Resources Corp. 10% and 18%, and Pluspetrol SA 10% and 18%.

BLOCK CI-11 STATUS

In December 1993, UMC disclosed that the 1 Panthere wildcat flowed 30 MMcfd of gas and 732 b/d of condensate. That announcement was followed in late last April with the news that the 1 Lion wildcat flowed a combined 23,700 b/d oil and 65 MMcfd of gas from seven zones (OGJ, May 9, p. 88).

UMC Pres. and Chief Executive Officer John B. Brock said Block CI-11 oil production of about 20,000 b/d will be the main economic driver of the development.

He said, "But the sale of associated gas from the Lion well, supported by gas from the Panthere discovery, gives the government an attractive alternative to importing distillate or fuel oil for the power sector, while enhancing the economic return to UMC and its partners."

The development plan tentatively approved by Cote d'Ivoire calls for Block CI-11 partners to drill six delineation wells in Lion and Panthere fields.

Block CI-11 partners have installed a wellhead platform in about 200 ft of water in Lion field and one in 260 ft of water in Panthere. A jack up drilling rig converted to a production unit is to be installed alongside the Lion wellhead platform in first quarter 1995.

Partners expect to start producing oil into a tanker by Apr. 1, 1995.

Until the project's 8 in. crude oil pipeline is installed - at the same time partners lay the 14 in. gas line - the tanker will deliver crude to Sir refinery at Abidjan.

Early in 1995, partners are to order pipe and mobilize equipment for pipelay operations. Pipeline construction plans include two bores, one for a beach crossing where the lines make landfall and another under Vridi Canal, the ship channel connecting Abidjan Harbor and the Atlantic Ocean. Gas is to begin flowing through the link to Abidjan's generating station by October 1995.

A total investment of $142 million will be required to implement the plan through start of production.

About $30 million has been spent to date.

UMIC is awaiting Cote d'Ivoire's decision on the award of Block CI-12, a 353,000 acre tract offsetting Block CI-11. UMIC earlier this summer collected a combined 8,500 line km of 2D seismic data in two surveys on the block.

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