Caracal Energy has completed a farm-in agreement with GlencoreXstrata for a 25 per cent stake for the development of two onshore oilfields in Chad
Under the terms, GlencoreXstrata will earn a 25 per cent working interest in the Badila and Mangara exclusive exploitation authorisations (EXAs) with Caracal Energy, a Canadian oil exploration company, retaining a 50 per cent working interest.
Under another agreement between GlencoreXstrata and Chad’s state-owned Société des Hydrocarbures du Tchad (SHT), the former has acquired a further 10 per cent working interest in the EXAs, with SHT retaining the remaining 15 per cent.
According to company sources, GlencoreXstrata will fund US$300mn of Caracal Energy’s working interest share of joint venture expenditures in the oilfields up to a maximum of US$100mn per year.
Glencore has also acquired a 33.3 per cent working interest in the exclusive exploration authorisations (EEAs) granted under each of Caracal Energy’s three production sharing contracts (PSCs) in Chad.
The three PSCs cover an area of 26,103 sq km in southern Chad.
The Badila and Mangara oilfields have a combined size of around 100 sq km and are located within 95km of each other within the same PSC.
Gary Guidry, Caracal Energy’s chief executive officer, said, “This transaction with Glencore is a very important step in the development of the assets in Chad. We have been working with Glencore on this transaction since July 2012 and we look forward to continuing the partnership as we drive the project towards first oil production within the next few weeks.”
Alex Beard, head of Glencore’s oil commodity department, said, “The closing of this transaction represents an important milestone in the continued growth of our E&P business.”
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