March 28, 2012 / 7:45 AM / 5 years ago

Comoros awards first oil exploration licence

3 Min Read

Workers are seen at an oil exploration site in Bulisa district approximately 244km (152 miles) North-West of Kampala January 20, 2012.Stringer

NAIROBI (Reuters) - Comoros said it has awarded its first ever oil exploration and production licence to a privately-owned Kenya-based exploration company, Bahari Resources Ltd.

Countries in the east and Horn of Africa and others with coastlines along the Indian Ocean have become a hot spot for oil and gas exploration, spurred by new finds. Comoros is made up of islands in the Indian Ocean, between northern Madagascar and east Africa.

"The government of Comoros is pleased to award its first exploration and development licence to Bahari Resources Ltd," Fouad Mohadji, vice president and minister for energy of Comoros, told an oil, gas and energy conference in Nairobi on Wednesday.

He said the government was taking its first steps to develop its exploration strategy.

"We believe our country represents one of the last prospective offshore frontiers for oil and gas," Mohadji added.

The Comoros deal with Bahari is for an offshore region bounded by latitudes 10 degrees to 13 degrees South, the western boundary of the Comoros, and longitude 43 degrees East.

The exploration area has an acreage adjacent to offshore Area 1 and Area 4 of Mozambique's Rovuma Delta, where Italy's biggest oil and gas group Eni and Anadarko Petroleum Corp made new hydrocarbon discoveries.

The economy in the archipelago relies chiefly on agriculture and fishing. It is the world's largest producer of the essence ylang ylang and exports vanilla and cloves.

Mohadji said demarcation of more exploration blocks and reaching a licensing round, would be done within two years.

"It's not more than two years. After that we go to the phases of exploration. As you know, it is a new area for us. Now we are waiting for the legislation," Mohadji, who did not say how many blocks the country aimed to create, said.

Comoros, between Madagascar and southern Africa, has a turbulent history with some 20 coups, or attempted coups, since declaring independence from France in 1975.

In a statement Comoros said that under its agreement, Bahari would undertake a phased seismic and drilling programme within the licensed area and carry out for the government a regional study of the entire Comorian territory.

The report will be used for the further demarcation of blocks and a future licensing round.

The government has said it hopes to have in place by 2013 a Petroleum Code to govern exploration and production as well as provide for internal structures that will oversee, monitor and control operations.

Kenya announced on Monday its first oil discovery, saying it was found in the northern part of the country where British firm Tullow Oil Plc has been exploring.

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