Aug. 28 (UPI) -- Malaysian energy company PETRONAS is funding 80 percent of the costs to drill into an emerging oil basin off the coast of Gambia, a project developer stated.
Australian energy company FAR Ltd., which has a core focus in West Africa, said the Gambian government signed off on a deal that brings a subsidiary of Petroliam Nasional Berhad in as a partner in the Samo prospect offshore.
"By securing the approval of the Gambian Ministry of Petroleum and Energy, FAR has achieved another milestone towards its objective of drilling the substantial oil resource potential of the highly prospective Blocks A2 and A5 in The Gambia," FAR Managing Director Cath Norman said in a statement.
PETRONAS took a 40 percent stake in the Samo prospect for $6 million in cash and agreed to fund 80 percent of the exploration costs for the first well, up to a maximum of $45 million.
After reviewing seismic data, FAR last week selected a final well location for Samo, a frontier drilling effort off the coast of Gambia. Seismic data are used to get a better understanding of the reserve potential in frontier prospects
Drilling is scheduled for the fourth quarter and will last about 40 days. It will be the first well drilled offshore Gambia in 40 years. 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, one of the largest finds in recent years.
FAR's joint venture partners in March completed a geotechnical study of a 2,900-square-mile permit area off the coast of Senegal that includes the flagship SNE oil discovery. The results revealed another 198 million barrels to the estimated 641 million barrels in the best estimate scenario of contingent reserves.
FAR already has a drillship contracted for the well. The Australian company estimates the Samo prospect contains prospective resources of 825 million barrels of oil.
PETRONAS had no statement on the farm-in.