Talisman to spend $120 million (Can.) in Sudan this year

Talisman Energy Ltd. drilled a successful oil wildcat on its controversial Sudan concession and plans to spend $120 million (Can.) on exploration and development in Sudan by Dec. 31. The decision to proceed comes despite criticism from human rights groups, who claim oil development funds a long-running civil war against Sudanese in the south.

Mar 23rd, 2001


By an OGJ Online Correspondent


CALGARY, Mar. 23�Talisman Energy Ltd. drilled a successful wildcat on its controversial Sudan concession and plans to spend $120 million (Can.) on exploration and development in Sudan by Dec. 31.

Jim Buckee, Talisman CEO, said the Shelungo test was the first well drilled on the west side of the concession and produced significant quantities of oil. Evaluation drilling will be required.

Talisman has 25% interest in the 12.2 million-acre Greater Nile Oil Project (GNOP) in southern Sudan. Critics allege revenues from the project help the Khartoum government fund the war against Sudanese in the south (OGJ, Jan. 17, 2000, p. 38).

Last year, Talisman endorsed recommendations in an Amnesty International report regarding oil operations and the civil war. Talisman agreed to set up its own human rights monitoring program in Sudan (OGJ Online, Aug. 21, 2000).

The state oil companies of China, Malaysia, and Sudan are partners in GNOP, which is producing 211,000 b/d of crude that is exported.

Talisman�s share of production is 52,750 b/d. Production is forecast to increase to 65,000 b/d in 2002. Talisman plans to drill 17 exploration wells and 25 development wells on the Sudan acreage this year.

In a report to analysts, Talisman also reported success in its deep drilling program for gas in the Alberta Foothills.

Talisman said it drilled 21 successful wells in 2000, up 62% from 1999, and spent $119 million, up 77% from 1999. It booked 130 bcf of proven gas reserves in 2000. Talisman expects to spend $139 million on deep drilling in the Alberta Foothills this year.

The company said five gas wells drilled in the region in fourth quarter 2000 all produced high rates on testing. Three wells flowed at levels near 10 MMcfd, one produced at 13 MMcfd and a fifth produced at 15 MMcfd.

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