11 January 2013

Liberia: AP Oil Drill Not for Production

Two days after the Australian firm African Petroleum (AP) announced that it has started tapping into oil deposits situated off the coast of Liberia, the National Oil Company of Liberia (NOCAL) says the ongoing appraisal drilling by AP is not for production as is being reported, but aimed at evaluating the size and nature of their reservoir to determine the number of confirming or appraisal wells required.

On Tuesday, January 8, 2013, AP said it had started drilling its Bee Eater-1 well offshore Liberia, about 6 miles from what it said was a proven high-quality reservoir, estimating the mean recoverable resources for the Bee Eater area at more than 840 million barrels of oil.

But in an apparent attempt to lower Liberians' high expectation over the emerging development, a NOCAL release issued in Monrovia on Thursday argued that "even if the ongoing appraisal programs determine the commercial viability discoveries, commercial production of oil in our off shore basin may yet be a decade away."

As such, NOCAL reemphasizes that AP is in the process of appraising their discovery,which they announced in February 2012, saying only further drilling will determine if there are commercial quantities of oil and that the announcement by AP was intended to inform the public, as required by all public companies, about the potential prospects of its ongoing appraisal program.

Liberia's Oil Sector regulatory body further said oil and gas exploration phases include exploration drilling, appraisal, development, production and decommissioning.

"The process from exploration to exploitation on average, takes at least 5-7 years.The ongoing appraisal drilling by AP is aimed at evaluating the size and nature of their reservoir to determine the number of confirming or appraisal wells required...," NOCAL said.

In closing, NOCAL said appraisal drilling program will determine whether potential discovery in Block LB-09 is commercially viable (as determined by the terms of the agreement), which could eventually ensure a progression to the development phase.

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