Anadarko resumes exploration on Saharan blocks in Algeria

A group led by Anadarko Petroleum Corp. Monday signed an amended production sharing agreement with state-owned Sonatrach. The agreement concerns Blocks 404, 208, and 211 in the Sahara Desert.


By the OGJ Online Staff


HOUSTON, Mar. 26�A group led by Anadarko Petroleum Corp. Monday signed an amended production sharing agreement with state-owned Sonatrach. The agreement concerns Blocks 404, 208, and 211 in the Sahara Desert.

Anadarko Algeria Corp. is operator with 50% interest. Its partners are Lasmo PLC unit Lasmo Oil (Algeria) Ltd., and Maersk Olie Algeriet AS, a unit of Maersk Olie og Gas AS, Denmark. Lasmo and Maersk Olie each hold 25% interest.

Under terms of the three-phase exploration program, Anadarko and its partners will spend at least $55 million. During the first 5 years, 400 sq km of 3D seismic and 1,100 km of 2D seismic will be shot and processed, the results of previous seismic surveys will be reprocessed, and six exploration wells will be drilled.

Seismic acquisition is expected to begin this year, and exploration drilling probably will begin next year. If options for years 6-7 are exercised, an additional well will be drilled each year.

Anadarko, Lasmo, and Maersk Olie will fund the exploration investment. Sonatrach will participate 51% in the development and exploitation of discoveries.

The exploration phase of Anadarko's original PSA in Algeria ended in 1998. During that program, Anadarko drilled 20 exploratory wells of which 12 resulted in discoveries.

Robert J. Allison, Anadarko chairman and CEO, said, "These are the same blocks we began to explore in 1989, and we know a great deal about this area. We already have many ideas to investigate on these blocks, and with additional seismic, we expect to identify even more."

The Anadarko-Sonatrach association has discovered nearly 2.8 billion bbl of oil. Anadarko drilled its first well in Algeria in 1991 and made its first oil discovery in 1993.

Production facilities under construction will increase production capacity to 500,000 b/d by mid-2003 from 75,000 b/d currently.

In addition to the three blocks covered by the amended PSA, Anadarko was the winning bidder in February for Block 406b, covering more than 687,000 acres.

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