Niger-focused oil and gas company Savannah Petroleum has announced the signing of a production sharing contract (PSC) with the government of the west African country for the R1/ R2 license area
The company said that the PSC will represent the single largest direct foreign investment into Niger by an unnamed UK company and see Savannah Petroleum invest an estimated minimum US$100mn into Niger over a period of eight years.
The PSC was recently signed by Foumakoye Gado, Niger’s minister of energy and petroleum, and Andrew Knott, CEO of Savannah Petroleum.
The R1/R2 permit lies on the Termit Trough, part of the broader Central African Rift System (CARS). Savannah Petroleum said that CARS consists of a series of highly oil prolific cretaceous and tertiary rifts, where over six billion barrels of oil has been discovered to date across fields in Sudan, South Sudan, Chad and Niger. R1/R2 consists of approximately 30 per cent of Niger’s original Agadem Permit, where China National Petroleum Company (CNPC) made an estimated 77 discoveries from 99 exploration wells, thus discovering 832mn barrels of 2P reserves over the 2008-2013 period.
In a Competent Persons Report recently commissioned by Savannah Petroleum and conducted by geological consultancy Robertson, the permit has been estimated to contain up to 819mn barrels of gross prospective resources in the primary Eocene horizon alone.
Gado said, “The R1/R2 PSC is a landmark contract for the Niger’s oil and gas industry. The agreed US$34mn signature bonus is the largest paid for a PSC without any existing oil discoveries in the history of Niger and reflects the license area’s substantial exploration prospectivity. The company’s planned work programme should see Savannah test the exploration potential it has identified on the license in an efficient and effective manner.”
Andrew Knott, CEO of Savannah Petroleum, added that the signing of the PSC was followed by a twelve-month period of technical evaluation and analysis of the R1/R2 area by them.
