Sterling Cedes Cameroon, Renews Somali Block (Update)
Updates with details of Somaliland licence, which were released after initial report was published
London-listed Africa explorer Sterling Energy said August 5 it has issued a notice of surrender for its Ntem Concession, offshore Cameroon, effective by end December 2016; it expects no material costs associated with the surrender. It also secured a renewal of an onshore Somaliland licence.
Sterling CEO Eskil Jersing expressed disappointment that no acceptable solution for all parties had been found to progress activity at Ntem: "Given the declaration of force majeure in May 2014, the remaining potential on the block and the challenging macro landscape, we have made the decision to formally surrender the Ntem Block. Our focus remains on securing transformative, exploitation led M&A opportunities."
The Ntem offshore area has been disputed between Cameroon and neighbouring Equatorial Guinea for over a decade. Cameroon state oil and gas company SNH publicised the Ntem Concession as an 'open block' late last year. Sterling disputed this and reserved its rights to the concession. However it now has decided to surrender the concession instead and focus on other activities.
Sterling also announced August 5 that the Somaliland government in East Africa has granted a further two-year extension to the current period of the Odewayne production sharing agreement (PSA) to November 2 2018, with options to extend it by subsequent optional 18-month, one-year and one-year extensions to a maximum of May 2 2022. Genel is operator with 50% and carries all exploration costs out to May 2 2020, while Sterling has 40%. For the initial two-year extension, minimum work obligations remain unchanged - namely acquisition of 500km of 2D seismic.
Separately, Canadian Natural Resources said in its 2Q results on August 4 that its gas production offshore West Africa reached 39mn ft3/d, a 56% increase from 25mn ft3/d in April-June 2015. Second quarter 2016 represented the first full quarter of production at Espoir and Baobab offshore Cote d'Ivoire following completion of CNR's successful infill drilling programs.
Espoir and Baobab are CNR's only producing fields offshore Africa, others are exploration blocks (Photo credit: CNR)
CNR's offshore West African oil production also increased over the same period from 17,070 to 30,858 b/d. Baobab produced first oil in 2005.
Mark Smedley