RE-OPENING OF THE OFFSHORE PETROLEUM PROSPECTIVE ACREAGE IN SEYCHELLES

The Republic of Seychelles announced today the reopening of the offshore acreage for oil prospection. During the last two years, applications were not being accepted from oil companies as the government reviewed the terms and conditions of its Model Petroleum Agreement and other related laws.

The President of the Republic of Seychelles, Mr James Alix Michel, said that the invitation to international oil companies into the existing offshore petroleum exploration industry had come about as a result of many months of systematic and detailed review of the legal, fiscal and commercial terms for exploration investments. Substantial support had been given for such work by the Commonwealth Secretariat, World Bank and IMF, which had each supplied specific experts to assist PetroSeychelles and the Government in this task.

The President said “On the one hand, we wish to accelerate investment in this sector so that we can get more exploration wells drilled soonest to get some measure of the petroleum endowment of the nation, but we also have to be cautious that if we are successful in discovering sizeable petroleum fields, the people of Seychelles, the ultimate resource owners, must get an appropriate share of the benefits”.

Under the new “Seychelles Licensing Initiative”, qualified oil companies are invited to submit their proposal for specific areas in the EEZ. Following a submission by a qualified company that has the necessary financial and technical standards, other oil companies will be invited to bid on the same Area and will have 90 days to submit their proposals. At the end of 90 the days, one of them will be selected to negotiate a Petroleum Agreement for the Area.

One of the main features of this revised licensing system is that more emphasis will now be placed on work programmes submitted by the companies in the review and appraisal of their tenders. “We will force competition by allowing other companies to apply for the same area. We want bona fide explorers to invest in Seychelles and drill wells to test our petroleum potential rather than speculate and sit on an area for their own commercial purposes,” said the President.

A string of recent oil and gas discoveries made in onshore and offshore East Africa have greatly increased the prospectivity of offshore Seychelles because of its geological affinity with this part of the world. The industry recognises the unique potential of the offshore acreage in the vast Seychelles’ Exclusive Economic Zone (1.3 million sq.km). This potential remains largely untested as only four exploration wells have been drilled to date, of which hydrocarbon shows were encountered in three of them.

Mr Eddy Belle, the CEO of PetroSeychelles, the state-owned entity that is the “arm” of the government overseeing oil exploration in Seychelles, said that there is definitely a working petroleum system offshore as evidenced by oil shows in the wells and the regular occurrence of tar balls which have been linked to potential source rocks found in the well.

The re-opening of the offshore acreage also coincides with the launching of the new PetroSeychelles Website, www.petroseychelles.com, where more information on the “Seychelles Licensing Initiative” is available.

Further information may be obtained from:

Chief Executive Officer, Mr Eddy Belle
OR
Exploration Manager, Mr Patrick Joseph

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