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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Elroy Jetson who wrote (48743)	3/27/2006 6:25:53 PM
From: mishedlo	of 116555

Chevron and Exxon strike it big in Africa By Richard Orange 26 March 2006 US giants Chevron and Exxon Mobil have made an African oil discovery that could hold more than a billion barrels worth of oil and gas. The find promises to be one of the largest finds this year, potentially opening up a new province off the shore of the West African island state of São Tomé and Principe. A source who has seen the results told The Business that the Obo-1 well, completed on 15 March, had found oil and gas in significant qualities. He said: “It is an encouraging result. Everyone is pleased.” Geological studies of the prospect suggest it could hold even more oil and gas than the Akpo field in the Nigerian waters to the north, which is thought to have recoverable reserves of more than a billion barrels. The source said Chevron and Exxon would meet on Tuesday to plan their next moves. He said Chevron, the operator of the field, had not yet decided when it would drill more wells to prove the exact size of the recovery. There is a severe shortage of oil rigs off West Africa, where the field has been discovered, making it extremely expensive to drill further at short notice. The companies would not be able to confirm the full extent of the discovery until they had drilled more wells. It took four wells before the full extent of the Akpo field had been proven. Another source said the consortium was still examining the data and was unlikely to agree on how to release the result until April. Chevron is the operator of the field with a 51% stake, Exxon holds 40%, with an alliance of Nigerian oil companies Dang-ote Energy Equity Resources and Afren holding the remaining 9%. The discovery will turn São Tomé into the oil industry’s newest resource-holder. The 160,000 inhabitants of the tiny former Portuguese colony could see their lives transformed in a way that has sadly eluded the inhabitants of the far more populous Niger Delta to the North – so long as São Tomé’s rulers manage to prevent a corrupt few siphoning off most profits. Campaigners for transparency in oil producing countries were optimistic about São Tomé after the country put into place a petroleum law modelled on that of Norway, with transparency over oil revenues and an oil fund for future generations. thebusinessonline.com

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