[Editor's note: this story was updated at 10:20 a.m. CT June 5.]
ExxonMobil Corp. (NYSE: XOM) signed a production-sharing contract with the government of Equatorial Guinea for deepwater block EG-11 for an undisclosed amount, the Houston-based company said June 5.
Deepwater block EG-11, located west of Malabo, measures about 307,000 acres (1,242 sq km) and is adjacent to the Zafiro Field located in Block B.
"Block EG-11 is the jewel among a group of already very prospective blocks that we are signing in 2017," said Gabriel Obiang Lima, the minister of mines and hydrocarbons in Sub-Saharan Africa's third-largest producer.
ExxonMobil already operates the Zafiro Field, the largest oil producing field in Equatorial Guinea, and Obiang Lima said the deal was not part of the 2016 licensing round, whose winning bidders are expected to be announced later on June 5.
Following ratification of the contract by the government, ExxonMobil will carry out the work program as operator with an 80% working interest. GEPetrol holds a 20% working interest.
The agreement also includes a commitment to acquire new and reprocess existing 3-D seismic data. In addition, ExxonMobil will work with the government of Equatorial Guinea to further develop the national workforce, according to the release.
“We look forward to building on our more than 20-year history of safe operations in Equatorial Guinea with this new high-quality exploration opportunity,” Steve Greenlee, president of ExxonMobil Exploration Co., said in a statement. “We are excited to add block EG-11 to our leading global deepwater acreage position and to expand the value of our important business in Equatorial Guinea.”
Mobil Equatorial Guinea Inc. operates the Zafiro Field with 71.25% interest. GEPetrol has 23.75% interest and Equatorial Guinea has 5%. The field is in water depths between 122 m and 853 m (400 ft and 2,800 ft) and has produced more than 1 billion barrels in its more than 20 years of production, the release said.
ExxonMobil Exploration and Production Equatorial Guinea (Offshore) Ltd. holds an 80% interest in block EG-06, which is adjacent to block EG-11.
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