Petro- Canada signed six new exploration and production sharing agreements (EPSAs) with Libya's National Oil Corporation (NOC). The terms of the new agreements, including the signing bonus, match those of the heads of agreements signed in December 2007.
Under the terms of the agreement the Canadian firm has 30 years to develop the assets. During the company’s tenure it will redevelop existing producing fields operated by Harouge Oil Operations ( a joint venture operation Co- owned with NOC) and continue on with a significant exploration program operated by Petro-Canada. Under the financial terms of the new agreements, Petro-Canada will pay 50% of all development costs and will receive an initial 12% entitlement share of production.
Petro-Canada estimates that there are gross contingent and prospective resources of almost two billion barrels of oil associated with the redevelopment program, requiring a total investment of approximately $7 billion gross. Over the next five to seven years, the redevelopment program is expected to double current production levels from existing fields to approximately 200,000 bpd.
The company also expects to invest $460 million for an exploration program in the sirt region, one of the world’s most prolific basins, where the company has already hit with seven out of nine wells drilled.
The proposed exploration program includes 10,000sq km of 3D seismic, 600 km of 2D seismic and 50 exploration and appraisal wells. Petro-Canada will pay 100% of all exploration costs .
The initial reserves impact of the new EPSA contracts will be reflected in Petro-Canada’s 2008 reserves statement. Beyond this point, on a proved and probable basis the majority of reserves will be booked as individual field plans mature over the next two five years.
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