Lukoil Overseas Granted to Operate In Red Sea

Russian oil major LUKOIL's subsidiary Lukoil Overseas started drilling of the second exploration well at North-East Geisum offshore block in the Red Sea's Gulf of Suez.

The main contractor is a well-known drilling company Global Santa Fe. The work will take one and a half month at the sea depth of 20 meters. The total cost of works is $6.1 million.

Lukoil Overseas was granted the right to operate on North-East Geisum, as well as on the neighboring West Geisum block in January 2003, based on the open tender arranged by the Egyptian General Petroleum Corporation (EGPC).

The total in-place reserves of both blocks are estimated at 261 million barrels of oil (on average). Two oil and gas prospects have been identified within the blocks. The total area of the blocks is 132 square kilometers.

The exploration program for both blocks covers a period of four years and particularly includes drilling of four exploration wells in the second work stage. The initial minimal exploration investment program is planned at $27.8 million.

A concession agreement between LUKOIL Overseas and the Egyptian Ministry of Oil was signed in June 2003.