Lukoil enters Republic of Congo project for $800m

Umar Ali 7 June 2019 (Last Updated June 10th, 2019 08:19)

Russian oil and gas company Lukoil has acquired a 25% interest in the Marine XIII licence offshore the Republic of Congo for $800m.

Lukoil enters Republic of Congo project for $800m
The Marine XII licence contains 1.3 billion barrels of oil equivalent. Credit: New Age.

Russian oil and gas company Lukoil has acquired a 25% interest in the Marine XII licence offshore the Republic of Congo for $800m.

The company signed a sale and purchase agreement with African energy company New Age through its subsidiary New Age M12 Holdings. New Age plans to use the proceeds from this transaction to strengthen its balance sheet and redeploy into opportunities at earlier stages in its African portfolio, including the adjacent Marine III licence.

The Marine XII licence is located on the Congolese continental shelf 20km offshore, covering 571km2 in water depths of 20m-90m. The licence covers five discovered fields, with proved and provable resources of 1.3 billion barrels of oil equivalent.

The Nene and Litchendjili fields in Marine XII launched in 2015 and currently produce 28,000 barrels of oil and gas condensate per day, as well as 1.7 million cubic metres of marketable gas per day.

The project is operated by Italian oil and gas company Eni, with a 65% operating interest. State-owned company Société Nationale des Pétroles du Congo is also a partner in the project, with a 10% interest.

New Age CEO David Stoopin said: “I am pleased to announce the sale of our interest in Marine XII. This sale highlights the success of our strategy of identification and early entry into under-valued proven acreage with upside potential.

“The Republic of Congo continues to be a key area of operations for New Age and the knowledge and understanding that we have gained from Marine XII will be applied to our work programme in the neighbouring block Marine III, where we have a high level of equity and are the operator.

“The proceeds from the sale of Marine XII further strengthen New Age’s financial position and also position the Company to pursue further growth opportunities in Africa. These include Marine III, as well as the Etinde development in Cameroon and exploration and appraisal projects in South Africa and Ethiopia.”

Lukoil president Vagit Alekperov said: “Entering this project is in line with our M&A strategy. The project is characterized by explored reserves, substantial production growth potential, access to well-developed infrastructure and it also fits our technological expertise.

“On top of that, the project is already free cash flow positive. We are also pleased to expand our partnership with Eni that is well-experienced in international offshore projects and known for its successful footprint in the region.”

The transaction is subject to customary conditions, including approval by the government of the Republic of Congo.