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Anadarko to resume drilling in Algeria

Anadarko Petroleum Corp, the biggest U.S. independent oil and gas company...

Anadarko to resume drilling in Algeria

Anadarko Petroleum Corp, the biggest U.S. independent oil and gas company, said yesterday it had signed an agreement to resume exploration in Algeria, where it has previously drilled 20 exploratory wells and scored a 70 per cent success rate.

Anadarko and its partners will resume exploration of blocks 404, 208 and 211 after signing an amendment to its production sharing agreement with Algeria's national oil company, Sonatrach, the Houston-based company said in a statement.

Anadarko's exploration partners in Algeria are Lasmo Oil (Algeria) Ltd, a unit of Italy's ENI, and Maersk Olie, Algeriet, a unit of Danish oil and shipping group A.P. Moeller. Lasmo and Maersk each hold a 25 per cent stake, Anadarko holds 50 per cent and is the operator.

Under the terms of the amended agreement, Anadarko and its partners will spend a minimum of $55 million during the first five years and will drill six exploration wells. Acquisition of seismic data is slated to begin this year with exploration drilling following in 2002. If options for a sixth and seventh year are exercised, an additional exploration well will be drilled in each year.

Anadarko Chairman and Chief Executive Robert Allison said the amended agreement will allow the company's Algerian exploration team to build on the knowledge gathered during 15 years of exploring other areas of the same three blocks. If new discoveries are made, the partners will be able to make use of existing facilities and infrastructure.

Anadarko said it had discovered nearly 2.8 billion barrels of oil since signing the production sharing agreement with Sonatrach in 1989. Those discoveries are currently producing 75,000 barrels of oil a day and production is expected to rise to 500,000 barrels per day by mid-2003, Anadarko said.

The exploration phase of the original agreement between Anadarko and Sonatrach ended in 1998. Anadarko also said it would increase capital spending in Canada by almost 50 per cent this year, excluding the cost of buying the Canadian firm Berkley Petroleum Corp.



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