PGS will acquire and market high quality 3D seismic data ahead of future São Tomé license rounds. The Company will also assist the Government of São Tomé and Príncipe with marketing the exploration opportunities and prospectivity of the São Tomé shelf to the international oil industry. The most popular area of interest is expected to be concentrated in the Northern part of the shelf which lies adjacent to a number of world class oil discoveries in deepwater Nigeria - the most recent discoveries are located in Block 246.
Petroleum Geo-Services' acquisition and marketing of seismic data will be completed in phases and is dependent on the timing of the license rounds and subject to the levels of industry prefunding.
The agreement covers all of São Tomé's territorial waters, including an area known as the São Tomé - Nigeria Joint Development Zone (JDZ). Until recently, this area was the subject of a territorial dispute between the São Tomé and Nigerian Governments. The JDZ was created as a result of negotiations between the two Governments. Soon to be ratified, this will serve as a legislative framework for permitting and promoting oil and gas exploration on the acreage.
Reidar Michaelsen, Chairman and Chief Executive Officer of Petroleum Geo-Services, commented, "This represents another example of PGS' strategy to work with local governments and the international oil and gas industry to increase interest and accelerate exploration and ultimately the development of new hydrocarbon provinces around the world. This agreement is similar to agreements PGS has successfully employed in Nigeria and Brunei previously.'
Background
The republic of São Tomé and Príncipe lies in the deepwater Gulf of Guinea. It is a large under-explored territory situated within a proven hydrocarbon system. The northern part of the territory contains a deepwater extension of the Niger Delta and is situated near world class oil fields found offshore Nigeria, such as Akpo and Agbami. The recently discovered La Ceiba field in Equatorial Guinea proves that a separate hydrocarbon system also exists to the east of São Tomé.
The Island Republic currently has no proven oil or gas reserves, either onshore or offshore, and therefore no upstream oil industry. Its downstream oil industry is wholly dependent on imported refined petroleum products.