Chevron Corp. (CVX) said Wednesday it will explore for oil off the shore of Liberia--a nation that doesn't yet produce crude, but holds promising acreage in a region that has yielded rich new oil deposits.
Chevron Corp. (CVX) said Wednesday it will explore for oil off the
shore
of
Liberia
--a
nation that doesn't yet produce crude, but holds promising acreage in a region
that has yielded rich new oil deposits.
The San Ramon, Calif., company signed up for three giant deep-water blocks
covering a combined area of 3,700 square miles--an area nearly four times the
size of Rhode Island and bigger than what Chevron holds off the shore of
oil-rich Angola. Chevron will hold a 70% interest in the concessions, and will
conduct a three-year exploration program. The program will begin in the fourth
quarter of 2010.
Chevron's foray is the latest in an emerging oil region in
West
Africa
, where giant fields such as Tullow Oil PLC's (TLW.LN) Jubilee and
Anadarko Petroleum Corp.'s (APC) Venus have been found. It is also the first
time that a giant integrated oil company has gotten involved in the West
African country, which is still healing from long years of strife. The discovery
of oil would greatly boost the recovery of the agrarian nation, one of the
world's poorest, and propel it into the ranks of budding African oil powers
like
Ghana
and
Uganda
.
"It represents an expression of confidence in the leadership and future of
Liberia
which
are essential conditions to attract other major investors in all sectors of the
economy," Liberian President Ellen Johnson Sirleaf told Dow Jones
Newswires in an email. "The creation of jobs and the revenue of possible
oil finds will transform the economy through infrastructure development."
For
Chevron
,
Liberia
is a
rare find: a country that's still open to foreign investment in its natural
resources that could be home to significant quantities of crude. The fact that
the country isn't an oil producer yet creates attractive conditions for
investment.
"Terms and conditions in
Liberia
are
in line with most of the countries that are encouraging foreign
investment," said Ali Moshiri, Chevron's head for
Africa
and
Latin
America
.
"They're very pragmatic about their approach," Moshiri said about the
Liberian government in an interview with Dow Jones Newswires. "That's the
reason we're here."
Also, as major oil companies scour the globe competing with Asian companies to
find the last few giant reservoirs of crude, finding a play of "this size
and this magnitude" is becoming less and less common, Moshiri said.
Moshiri said that the first well is scheduled to be drilled next year, and that
the company could base some of its operations out of neighboring countries. Chevron
has a large presence in
Africa
, and
is a major oil producer in
Angola
and
Nigeria
.
Liberia
, with
a population of 3.4 million, mainly depends on exports of rubber and timber to
make ends meet. It is still healing from the civil war that ended in the
earlier part of the decade, but its recovery has been quickening its recent
years. Last weekend, Delta Air Lines Inc. (DAL) launched the first direct
flight between the
U.S.
and
Liberia
in
many decades.
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