Niger-focused Savannah Petroleum has signed a production sharing contract which it says will represent the single largest direct foreign investment into Niger by a UK company.
Savannah revealed on Friday it had been awarded the PSC for the R1/ R2 license area and plans to invest a minimum $100 million in Niger over an eight year period.
“The agreed $34 million signature bonus is the largest paid for a PSC without any existing oil discoveries in the history of Niger and reflects the license area’s substantial exploration prospectivity,” Niger’s Minister of Energy & Petroleum, Foumakoye Gado, said.
“The company’s planned work program should see Savannah test the exploration potential it has identified on the license in an efficient and effective manner.”
R1/R2 consists of roughly 30% of Niger's original Agadem permit, an area where Savannah says China National Petroleum Corporation made an estimated 77 discoveries from 99 exploration wells, unlocking 832 million barrels of proven plus probable reserves between 2008 and 2013.
It added that a report it commissioned from geological consultancy player Robertson estimated the permit area to have the potential to contain up to 819 million barrels of gross prospective resources in the primary Eocene horizon alone.