Oil exploration in Seychelles’ waters

Oil exploration in Seychelles’ waters

07-March-2016
Japanese firm gets license extension


Japanese Oil Gas Minerals Exploration Company (Jogmec) will continue conducting geological and geophysical surveys for oil in Seychelles' waters following the extension of its license.
According to the Seychelles News Agency, PetroSeychelles said the extension agreement signed on February 12 is for a further 24 months.
The agency adds that Jogmec had requested an extension of their license to acquire more data and reprocess existing information, now that the petroleum industry is going through tough time.
Jogmec has been conducting geological and geophysical surveys including seismic surveys with PetroSeychelles since August 30, 2013 under the exploration license granted by the government of Seychelles.
The company will be exploring the same area of 8,465 square kilometres over the next two years.
While Jogmec is extending its oil search in Seychelles, the steep drop in oil prices over the last 24 months pushed two other companies – Australian firm WHL Energy and Afren Plc, an offshore company – to suspend their search for oil in Seychelles.
“The acreage that was leased to WHL/OPHIR is now back on the market but the Afren acreage is not yet available,” PetroSeychelles’ chief executive Eddy Belle was quoted as saying in an article published by the Seychelles News Agency (SNA).
Still according to the SNA, Seychelles, situated in the western Indian Ocean and with a vast exclusive economic zone of 1.4 square kilometres, is believed to have large quantities of untapped oil.
It adds that an assessment in 2012 by the US Geological Survey in the western Indian Ocean region, which includes Tanzania, Madagascar and Mozambique, estimated a total of 793 million barrels of oil present in the Seychelles rift area.
After a two-year embargo, oil exploration in Seychelles opened for bidding companies in 2013.
As Seychelles depends heavily on tourism and fisheries for its economy, the government is hoping to add hydrocarbon to its economic base.
Over the last two years, there has been a steep drop in oil prices.
Mr Belle explained that there are many factors that dictate the price of crude oil.
“There are several factors that dictate the price of crude oil and among these are increase of production by USA, Organisation of Petroleum Operating Countries’ (Opec) refusal to cut production, economic slowdown in China, imminent re-entry of Iran to the market, etc. and all indications are that it might take another two years for the price to recover to such a level for us to see any meaningful increase in exploration activities.”

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