Rex International Holding 5WH has announced that a wholly-owned subsidiary of Porto Novo Resources, Rex's 70%-owned indirect joint venture (JV) company, has signed a production sharing contract for operatorship and a 76% working interest in an offshore block in Benin’s Sèmè Field.
Of the remaining working interest, 15% is held by the government of Benin and 9% by Octogone Trading, an integrated energy and commodities company trading throughout West Africa.
The JV company’s subsidiary, Akrake Petroleum SA, will initially redevelop the Sèmè Field and apply Rex’s low-cost production system comprising a jack-up Mobile Production Unit (MOPU) and a Floating Storage Unit (FSO), to restart production. Horizontal wells and modern completion technology for water control will also be employed to maximise total oil recovery.
The offshore Block 1 in Benin covers 551 sqkm and is in shallow water depth of 20 to 30 metres and includes the Sèmè Field discovered by Union Oil in 1969. The Sèmè Field was first developed by Norwegian oil company, Saga Petroleum, and produced approximately 22 millions of barrels of oil between 1982 and 1998, before production was stopped prematurely due to low oil prices of around US$14 per barrel in 1998.
According to Rex, previous drillings in the Sèmè Field in 2014 to 2015 have proven additional deeper hydrocarbon accumulations of oil and gas. Further appraisal tests, including the appointment of a qualified person to independently assess the amount of reserves in the field, will be undertaken in conjunction with the early production drilling. Additional reserves and resources, if any, can be produced through the infrastructure to be installed in one of the reservoirs.
Rex says it plans to file a field development plan next year to restart production in the area.
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Executive chairman Dan Broström says: “The Rex group has been on the lookout for new assets in different regions to mitigate geographical concentration risks, increase group production numbers and replenish reserves and resources in our current producing assets. The terms for the Block 1 production sharing contract are favourable for an economically viable development to restart production in the short-term.”
Broström notes that he believes the company has established a good working relationship with the Benin authorities and its local partner, Octogone Trading, and looks forward to cooperating with them in the Block 1 partnership.
“We will tap on the geological and geophysical expertise and the deep technical and operational knowhow of our teams in Norway and Oman, and establish a professional team locally, to work towards filing a Field Development Plan in 2024 to restart production. We will also evaluate exploration opportunities to unlock unexploited oil and especially gas potential in the field,” he adds.
Shares in Rex closed 0.1 cents higher or 0.55% up at 18.2 cents on Dec 22.
