Dec. 5 (UPI) -- Lower operating costs mean there's more interest in examining the oil and gas potential in the deep waters of Sierra Leone, an African-focused company said.
African Petroleum said its regional subsidiary signed agreements with the government of Sierra Leone to use state-owned data to examine the possibility of drilling in the deep waters off the nation's coast. The company said there's been little interest so far in tapping waters that run as deep as 2 miles because the market was prohibitive to the capital investments required.
"Based on recent discussions we have held with industry players, we are aware of an increased appetite for material ultra-deep offshore opportunities, driven by the advancements in drilling technology and the decrease in operating costs," CEO Jens Pace said in a statement.
African Petroleum said its acreage offshore West Africa could hold as much as 7.4 billion barrels of oil. Performance during the first half of the year, however, showed an $11.5 million loss, against a 3.6 million profit during the same time last year.
The company already has licenses to operate in four countries in West Africa, one of the more promising frontier basins in the world. Two Gambian blocks combine for an estimated 1 billion barrels of unrisked barrels of oil and are in close proximity to the SNE oil field offshore Senegal, considered one of the largest discoveries in the world when announced in 2014.
West African countries have been at odds over their maritime borders, while officials there have been vetting their corporate options as the potential for oil evolves.
Licenses signed Tuesday with Sierra Leone's government were nearly cut in half in terms of acreage by parliamentary action and the company said it had to modify the minimum expense requirements according to the rule, though it provided little explanation for the decision.
The licenses expire in 2019 and the company needs to make a decision to commit to drilling before then.