Genel Energy plc has announced it has signed a farm-out agreement relating to the SL10B13 block, Somaliland, with OPIC Somaliland Corporation (‘OSC’), with all its share of future capital investment coming from CPC Corporation, Taiwan, the state-owned enterprise of Taiwan. Under the agreement, OSC receives a 49% working interest in the block for a cash consideration of 49% of all Genel’s historic back costs, plus a cash premium. Genel previously held a 100% working interest, and will continue as operator.
“Somaliland has significant underexplored potential, with geology analogous to Yemen”, Genel says in a release. “The SL10B13 block is highly prospective, with multiple stacked prospects with over 5Billion barrels of prospective resources identified from the interpretation of the 2D seismic data acquisition completed in January 2018”.
Our editors note that the claim: “5Billion barrels of prospective resources”, does not mean that there is 5Billion barrels of crude or condensate or their equivalent in natural gas sitting in the reservoirs. “Prospective resources” are just that: “prospects”. They are not even yet stock tank oil in place or stock tank gas in place, let alone reserves.
Genel’s statement says that the field partners will now work together to plan exploration drilling in this block, with an aim of drilling a well in 2023. It is currently estimated that a well can be drilled for a gross cost of c.$40Million.
“The prospective SL10B13 area is c.150 kilometres from the port at Berbera, offering a route to international markets”, the company explains, adding: “The agreement has been approved by the Government of Somaliland”.