Seychelles offers oil and gas exploration blocks

offshore seychelles-hakonthingstad flickrEast Africa has become a focus for exploration after oil discoveries in Uganda and Kenya as well as natural gas finds in Tanzania and Mozambique. (Image source: hakonthingstad/Flickr)Seychelles has invited oil and gas companies to bid for its offshore exploration blocks, ending a two-year moratorium and introducing new rules for bidders

The East African nation does not have a fixed number of exploration areas, but companies can bid for areas of up to 10,000 sq km each out of its 1.3mn sq km exclusive economic zone.

Seychelles President James Aliz Michel said, “We want explorers to invest in the country and drill wells to test our petroleum potential.”

Under the new licensing rules, once a company approaches the government on a first-come, first-served basis for an exploration area, competitors will have up to 90 days to submit bids for the same block.

Once the 90-day bidding period expires, the government will select the company that has the financial ability to conduct exploration and go into production if it strikes commercial quantities, oil and gas regulator PetroSeychelles said.

The license also stated that exploration companies will be required to pay 10 per cent of petroleum revenues as a royalty, up from a previous five per cent.

President Michel added that while Seychelles wished to attract investment to the sector and get more exploration wells drilled, it also had to have the right conditions in place so that its citizens would benefit in the event of sizeable discoveries.

PetroSeychelles said that among the significant features of the revised licensing system, the regulator will pay more attention to the details of each bidder’s plan and proposed time frame for exploring and developing an area.

East Africa has become a focus for exploration after oil discoveries in Uganda and Kenya as well as natural gas finds in Tanzania and Mozambique, Reuters reported.

Currently, Afren and Australia’s WHL Energy are the only companies holding exploration licences in Seychelles.

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