LUKOIL will invest $100 million to launch exploration activities on its offshore block in Sierra Leone, a company official said.
LUKOIL, which has struggled to replace production with new reserves, is pinning its hopes on new overseas ventures and bought a 49 percent stake in the offshore block last year as part of efforts to build its portfolio of African oil assets. Company geologists plan to drill a first exploration well on the block by the end of the year with positive results leading to a possible expansion of its operations in Sierra Leone.
"If we are successful in the exercise on the first block, we hope to embark on another block in the future," Anatoly Katoshin, LUKOIL's vice-president for exploration, told journalists in Sierra Leone's capital, Freetown.
Oil majors are jostling for stakes in offshore blocks in West Africa's Gulf of Guinea as global on-land oil supplies become more scarce. LUKOIL has already drilled several wells in the Gulf of Guinea as part of a joint venture with Texas-based Vanco and Ghana's National Petroleum Corporation. It hopes to find reserves of 150-250 million barrels of oil. It is also carrying out offshore exploration in Ivory Coast.