U.S. energy major Chevron Corporation (CVX) aims to commence its exploratory drilling activities off the coast of Liberia in the fourth quarter of 2011.
The company has obtained a drill ship for this purpose and will perform the operations in the first deepwater well in blocks LB-11, LB-12 and LB-14.
In September 2010, with the approval of the Liberian government, Chevron acquired a 70% interest in the three aforesaid deepwater concessions. These are located between 12 miles and 110 miles to the south of the capital, Monrovia, covering a total area of 3,700 square miles.
Per the deal between Chevron and Liberian authorities signed last year, the domestic unit of the company will carry out the three-year drilling program to explore for oil offshore. However, the financial terms of the deal were not disclosed.
According to management, Liberia presents a lucrative investment opportunity for Chevron as the country's natural resources are vastly unexplored. Hence, management remains optimistic about stepping into the Liberian oil and gas sector and believes that the deal will reinforce the company's foothold in West Africa.
Chevron's presence in Africa spreads across Angola, Chad, the Democratic Republic of the Congo, Nigeria and the Republic of the Congo. We believe that Chevron’s upgraded technology and operational efficiency will drive this project to success.
Following this drilling operation, the Liberian government expects to move a step ahead in strengthening the energy sector of the country, which does not produce crude oil but holds a fertile acreage.
As Liberia slowly recovers from the aftereffects of prolonged military violence, international oil companies are gradually venturing into contracts to discover and produce oil from offshore Liberia and other areas in West Africa.
In November last year, Anadarko Petroleum Corporation’s (APC) exploration well, Mercury 1, discovered oil in offshore Sierra Leone, near Liberia's border. Anadarko expects the well to have 135 net feet of oil pay in two Cretaceous-age fan systems.
California-based Chevron Corporation has an impressive portfolio of new development projects, a track record of solid operating performance and financial flexibility. We expect the company to perform above the industry levels and maintain our Outperform rating.
ANADARKO PETROL (APC): Free Stock Analysis Report
Be the first to comment