Wessex Exploration, the Bristol-based hydrocarbon prospecting company, has signed an assurance agreement for a production-sharing contract that secures an area off the coast of the Western Sahara known as the Imlili Block.
The deal, made with joint venture partners Tower Resources, is somewhat speculative since it has been made with the Saharawi Arab Democratic Republic (SADR) which is recognised by the United Nations as a non self-governing territory. This is because the reality on the ground is that the area is claimed and occupied by Morocco.
The award of the block gives Tower and Wessex joint control over a swathe of prospective acreage more than 500 kilometres long. Imlili was poorly explored more than five decades ago when a few exploratory wells suggested the presence of all the ingredients necessary for a working petroleum system.
The partners will be required to pay only a small annual administrative fee to the SADR to retain the block until the sovereignty of the territory has been settled. In the meantime, the prospectivity of this acreage will be evaluated using legacy seismic and exploratory well data currently available to the partners.
Tower's executive chairman Peter Kingston said: "There will be limited activity until a political solution has been reached on SADR sovereignty. Once that occurs, Tower should have access to exploration acreage of the highest quality. I wish the West Saharan people good fortune in their quest for an independent future."
Shares in Wessex dipped slightly in early trading. Its chairman David Bramhill said last week in his annual report that the company is in good shape. It has a 1.25% stake worth at least £37.5m in vast oil reserves known as the Zaedyus discovery off the coast of South America.
