By Moses Aremu
Lukoil’s agreement to purchase a 37.5% stake in Cameroon’s Etinde Field provides the Russian player its first near-producing asset on the African continent.
It also extends its West African portfolio eastwards, from Cote D’Ivoire and Ghana and Sierra Leone.
Lukoil is buying the stake from the AIM listed Bowleven, who is also selling 12.5% to New Age, already a 25% shareholder. Etinde is estimated to contain a total of 263MM barrels of oil equivalent. “Thirteen out of the sixteen wells drilled at the site demonstrated positive results, and the discovered reserves are now being appraised”, Lukoil says in a press release announcing the deal. “The drilling of two more wells is scheduled for next year. The final investment decision is expected in 2015”.
The 50% sale to Lukoil and New Age will amount to around $250Million, with $170Million paid once the deal has been finalized, $40Million in deferred payments after prospecting drilling in Etinde area and $40Million once two wells have been drilled. Lukoil’s 37.5% is worth about $185Million
Lukoil’s only production asset in Africa is the Meleiha production concession (Western Desert), where it holds 24%, with a contract validity period to 2024. Meleiha is one of the company’s first foreign production projects, but its main international cash cow is in the West Qurna-2 project in Iraq, where production is 120,000BOPD..
Lukoil’s adventure in Africa includes exploratory assets in Ghana, Sierra Leone and Cote D’Ivoire. It has encountered oil in the last country, but none so much as to lead to talk of field development.