OilVoice - Lukoil Overseas Acquire Interest in Exploration, Development, and Production Project on the Deepwater Block CI-205, Cote d'Ivoire

Lukoil Overseas Acquire Interest in Exploration, Development, and Production Project on the Deepwater Block CI-205, Cote d'Ivoire

Tuesday, July 18, 2006

Lukoil Overseas has signed an agreement to acquire a 63% interest in the exploration, development, and production project on the deepwater block CI-205 offshore Cote d'Ivoire from Oranto Petroleum International Ltd, a private Nigerian company.

Preconditions for the completion of the deal include the customary approval of the appropriate government authorities of Cote d’Ivoire and the appointment of Lukoil Overseas the operator of the project.

Currently, the project is the subject of a production sharing agreement between the Republic of Cote d'Ivoire, represented by the Ministry of Mines and Energy and the Ministry of Economy and Finance, and the consortium of Oranto Petroleum International Ltd 90% and the National Petroleum Company of Cote d`Ivoire, Petrochi Holding 10%.

Block Cl-205 is located in the Gulf of Guinea and is assigned to the Tano Basin with proven oil and gas potential and lies 15 kilometres from the recently discovered Baobab oil field, the largest in Cote d'Ivoire. The size of the block is 2,600 square kilometres and distance to shore is approximately 100 kilometres.

The PSA was signed in July 2001 and over the past 5 years 2,400 square kilometres of 3D seismic and 4,900 line kilometres of 2D seismic were acquired. The exploration period is split into three phases with combined duration of 7 years. Presently, the project is in the second exploration phase, which requires the consortium to drill an exploration well. Upon a discovery of hydrocarbons, the block's development period will be 25 years with a possible extension for an additional 10 years.

The national petroleum company Societe Nationale d’Operations Petrolieres de la Cote d’Ivoire, Petrrochi Holding is a wholly owned by the Cote d'Ivoire government. The holding company includes Petrroci Exploration-Production, the upstream arm, Petroci Gaz, the gas distribution grid, and Petroci Industrie-Services, the petroleum services company. The average production is approximately 100,000 barrels per day, nearly two-thirds of which come from the Baobab field.

Oranto Petroleum Ltd is a subsidiary of Atlas Petroleum International Ltd and is currently working on 10 blocks in Nigeria, Equatorial Guinea, and Republic of Cote d'Ivoire. Its production exceeds 10,000 barrels of oil per day. Atlas specializes in the development of offshore oil fields. The company's main partners are TransAtlantic Petroleum, Devon Energy, Noble Energy, Pioneer Natural Resources, Nexen, and Roc Oil.