Inpex buys stake in Nganzi block in Congo (former Zaire)

Inpex Corp. was approved by the government of Congo (former Zaire) to acquire a 20% participating interest of the onshore Nganzi block with Soco Exploration & Production DRC, a subsidiary of Soco International PLC.

Aug. 26, 2010

2 min read

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Aug. 26 -- Inpex Corp. was approved by the government of Congo (former Zaire) to acquire a 20% participating interest of the onshore Nganzi block with Soco Exploration & Production DRC, a subsidiary of Soco International PLC.

Inpex has 32.28% interest in the block, which has been producing oil since 1975.

Under terms of the farmin agreement, Soco said Inpex received a 20% interest in block and agreed to pay 40% of the drilling costs, with half of the funding obligation subject to certain caps on cost overruns, associated with a three-well exploration drilling program.

Following the initial three-well program, Soco said Inpex will fund its share of costs associated with the block. In addition, Inpex will fund its share of all the historical costs certified as cost recoverable incurred by Soco E&P DRC on the Nganzi block.

An Inpex spokesman declined to specify the value of the agreement, but he said the Japanese firm, quoting Soco, expects about 200 million bbl of reserves for each of three structures the partners plan to test drill this year.

According to Soco, each well is anticipated to take 40-50 days to drill with another 2-3 weeks added if testing is required. “Predrill estimates place mean recoverable resources at approximately 200 million bbl of oil per each of the three structures to be drilled,” Soco said.

The Nganga-1 well was spudded July 15, and is now drilling in the 12¼-in. section of the hole just prior to running and cementing the 9 5/8-in. casing, Soco said. Following this, the well will be drilled into the primary reservoir section.

In connection with the Inpex purchase, Japan Oil, Gas & Metals National Corp. said it will invest about ¥3.34 billion in the Nganzi project, providing the funds between 2010 and yearend 2014 by purchasing shares of the Congo unit of Inpex that will own the 20% stake.

Following the Inpex farmin, operator Soco will retain a 65% share in the 800 sq km Nganzi block, while the national oil company, La Congolaise des Hydrocarbures, will hold the remaining 15% stake.

Contact Eric Watkins at [email protected].