Nicaragua goal: for US player MXJ Xploration
Nicaragua hands oil keys to US player
Nicaragua has signed a contract with a unit of US oil company MKJ Xploration to let it explore and develop oil and natural gas fields off the country's Caribbean coast, the company said.
The deal, signed by Nicaraguan President Daniel Ortega, kicks off the first serious exploration for oil in Nicaraguan waters, MKJ Xploration head Eric Conrad told a news conference in the Nicaraguan capital.
The company will search for oil over six years in two areas about 60 miles (100 kilometres) off Nicaragua's east coast, Conrad said. If the company finds any, it will have the rights to produce oil and natural gas there over 30 years, he said.
Nicaragua had tried to close the oil deal during the administration of Ortega's predecessor, Enrique Bolanos, but a court voided an agreement in 2006 after two regional councils challenged it on grounds they had not been consulted by federal authorities.
The regional councils authorised the plan in December, Reuters reported.
Conrad said wells would be drilled in waters as deep as 3,300 feet. He said the company would pay 15% royalties on oil drilled and 30% of net profits earned in the country.
Like most of Central America, Nicaragua is dependent on costly fuel imports and would benefit enormously from the discovery of domestic oilfields.