Petroguin prepares to grant concession of oil blocs in Guinea Bissau

30 August 2007

Lisbon, Portugal, 30 Aug – Guinea Bissau’s state oil company, Petroguin, is preparing to grant concessions for oil blocs, the Guinean oil minister told Portuguese news agency Lusa Wednesday.

Speaking in Lisbon, where he was due Thursday to take part in a meeting on oil exploration in Guinea Bissau, Soares Sambú said that several concession proposals submitted by foreign oil companies to Petroguin, “are being negotiated.”

“We have been approached by several foreign companies [interested in exploration],” said the Guinean minister.

Saying he did not have any information on the exploration work underway, Sambú declined to comment on news that there had been significant results in the second well (Eirozes-1) drilled by the consortium led by Premier Oil in the Casamança-Bissau sub-basin.

Soares Sambú noted that the available information “indicates the existence of oil,” but that “the problem is moving on to the production phase,” given that “so far” reserves had not been found of sufficient quantity and quality.

Surveys carried out in the past showed the presence of a large amount of sulfur in the crude oil and its removal implies added costs in the production process, and could even make it unfeasible.

The first well drilled by the consortium, Espinafre-1, was sealed and abandoned on March 23, “after problems were found in the stability of the well,” according to the latest report from Premier Oil.

The second well, Eirozes-1, the results of which will be known at Thursday’s meeting, began on March 31.

Premier Oil is the operator of blocs 4A and 5A (Esperança) and 2 (Sinapa), both in the Casamança-Bissau sub-basin, in partnership with Occidental Petroleum and Sterling Energy. (macauhub)