TEGUCIGALPA Jan 16 British oil and gas company
BG Group will soon begin oil and gas exploration on
Honduras's Atlantic coast with an initial investment of at least
$20 million, a company executive said on Thursday.
Honduran authorities plan to give the company an
environmental license on Friday for an offshore block of 35,000
square kilometers off the coast of La Mosquitia, a jungle region
bordering Nicaragua, Roberto Herrera, an adviser to the
president, told Reuters.
"If they give us the environmental license tomorrow, next
week we will begin exploration work," Carlos Quintana, a BG
Group executive, said in a press conference in Tegucigalpa.
The company will search for oil and gas deposits for four
years in the block, investing $20 million to cover the first
phase from 2014 to 2015.
Honduras handed the company a contract in May 2013 awarding
exploration rights for four years, with an option to renew for
two more. The contract also included drilling rights for 20
years, with an option to renew for five more.
The exploration contract was the first given out by the
Central American nation, which has never discovered oil in
Neither government officials nor BG group have estimates for
oil and gas reserves in the block.
If BG Group finds marketable quantities of oil, Honduras
will receive 15 percent of the oil and gas extracted while the
firm is recovering its initial investment, according to Herrera,
who participated in negotiations.
Once initial investments have been recovered, BG Group would
hand over half to 58 percent of output to the government, he