The Government of Somaliland has granted a two-year extension to Sterling Energy for its existing work period of the Odewayne production sharing contract (PSC).
Sterling Energy said the amendment to its existing contract reflects delays which will be incurred when the unit is being established.
The PSC, which was awarded in 2005, covers block SL6 and part of blocks SL7 and SL10 in onshore Somaliland, a region of 22,840km².
It is currently in its third phase, which is due to expire in November 2016, with an outstanding minimum work obligation of acquiring 500km of 2D seismic. The minimum work obligation during the fourth phase of the PSC, which will expire in May 2018, is for the acquisition of 1,000km of 2D seismic and drilling one exploration well.
The government will set up a trained and equipped oilfield protection unit (OPU) that enables in-country operators to safely carry out future seismic and drilling operations. The OPU is anticipated to enter into service by the end of the year.
Sterling Energy chairman Alastair Beardsall said that the company looks forward to starting seismic operations in the Odewayne area as soon as possible.
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By GlobalData"We thank the government of the Republic of Somaliland for granting the two-year extension to allow for the necessary preparations to be made for the future conduct of operations in a safe and secure manner," Beardsall added.
The PSC’s current holders are Genel Energy Somaliland with a 50% stake, Sterling Energy with a 40% interest and Petrosoma with a 10% stake.
