Niger looks to capitalize on oil wealth

Aug. 8 (UPI) -- The government of Niger said Wednesday it's eager to capitalize on the potential launch of new crude oil production as soon as possible.

British energy company Savannah Petroleum, which has a core focus on Africa, signed a memorandum of understanding with Niger's government to move forward with an early production scheme for discoveries made in the southeast of the country.

"As a government, we are keen to see that these and future discoveries commence production as soon as possible, given the positive contribution to economic growth, tax revenues and our local communities that they have the potential to deliver," Niger Minister of Energy and Petroleum Foumakoye Gado said in a statement.

Savannah has two production sharing contracts in Niger and found the area is relatively underexplored, though Chinese companies have posted successes in drilling operations. Though it provided no estimate of the total potential reserves, the company said it's made oil discoveries at three wells in its license area in Niger's Agadem Rift basin.

After completing its third well in a drilling campaign in June, the company said it estimated the unrisked recoverable reserves at the Kunama prospect in the broader basin at 35 million barrels. Final results from Kunama-1 are pending.

The company has a memorandum of understanding with the governments of Niger and Nigeria to examine construction of a pipeline that could carry oil out of Niger to export terminals.

"We expect the Niger-Nigeria Export Project to provide one of the potential routes to market for Savannah's existing and future discoveries in Niger," CEO Andrew Knott said in a statement.

Nigeria is a member of the Organization of Petroleum Exporting Countries whose economy emerged from recession in the second quarter of last year. The country's central bank said the economy was steadily improving on the back of higher oil prices.

Pipeline construction though Nigeria could contain an element of risk given security concerns in the nation's southern coastal states.