OAO Novatek has acquired a 50% working interest in the concession agreement for oil and gas exploration and development at the El-Arish offshore block in Egypt from Tharwa Petroleum S.A.E. Tharwa Petroleum S.A.E. holds the remaining 50% working interest.
The offshore block, comprising an area of approximately 2,300 square kilometers, is located along the Mediterranean coast and is adjacent to the north coast of the Sinai. Half of the block lies at depths of up to 50 meters with the remaining area reaching depths of up to 500 meters.
The concession agreement provides for a minimum exploration period of four years, which will include undertaking geophysical studies of the concession block as well as the drilling of two wells. Novatek will have the opportunity to extend the exploration period to nine years if preliminary results require further study. The concession agreement provides for a twenty-year development period for each commercial discovery with a possible five-year extension.
‘The El-Arish offshore block is the Company’s first international project. Our participation in the concession is consistent with Novatek’s long-term strategy of expanding its resource base and geographically diversifying its core activities in order to establish a stable base for production growth,’ commented Novatek’s CEO, Leonid Mikhelson at the signing ceremony in Cairo.