Sharjah’s Crescent Inks Farm-Out Deal with Rosneft

Source: www.gulfoilandgas.com 6/6/2010, Location: Middle East

A partnership between Sharjah-based Crescent Petroleum and Russia's Rosneft Oil Company commenced drilling Saturday on the first of four possible wells for natural gas in the Sharjah Onshore Concession (SOC) near Al Madam with an initial outlay of Dh220 million.

The two companies have signed a farm-out agreement for the SOC under which they will together develop the concession comprising 1,243 square kilometres in Sharjah, adjacent to the Saja'a gas field.

This is the first international investment in the Middle East for Rosneft, which is Russia's largest oil producer with more than $50 billion (Dh183 billion) in revenues. "We are quite confident there are going to be substantial reserves in this area. We estimate about 2.5 trillion cubic feet of gas," Crescent Operations Director Abdullah Al Qadi said.

"Seismic interpretation has identified two prospects in the southern part of the SOC and two leads in the centre and north," he said. "If we're lucky we'll also get some oil."

Earlier Saturday, the farm-out agreement was signed by Badr Jafar, Executive Director of Crescent Petroleum Group, and Sergey Bogdanchikov, President of Rosneft, in the presence of Igor Sechin, Deputy Prime Minister of the Russian Federation and Chairman of Rosneft, and Omar Gobash, the UAE Ambassador to the Russian Federation.

Rosneft has 49 per cent of the concession, with Crescent holding the remaining 51 per cent. The initial investment of Dh220 million will go principally towards exploration, including the drilling of two wells to an approximate depth of 14,800 feet.

The two companies signed a strategic cooperation agreement on May 19 to jointly develop oil and gas opportunities in the Middle East and North Africa.

The SOC-1 well on which spudding commenced yesterday will "hopefully be the first of many joint projects together across the region", said Crescent's Jafar.

Rosneft is open to a partnership with Crescent in developing other oil and gas fields in the region, including Iraq, where the Sharjah-based company already operates. "Crescent is an excellent partner for Rosneft in the region. If a proposal regarding Iraq is made, certainly we will consider it," Rosneft Chairman Igor Stechin told reporters. Apart from Northern Iraq, Crescent operates in numerous countries, including Egypt, Pakistan, Yemen, Canada, Yugoslavia, Tunisia, Argentina and, of course, the UAE.


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