Page 10 - MEOG Week 01 2023

MEOG PROJECTS & COMPANIES MEOG

Zenith signs deal to acquire

OMV’s Yemeni assets

YEMEN A Dutch affiliate of Canada-based Zenith working interest, with China’s Sinopec own-
Energy has entered a share purchase agreement ing 37.5%, Yemen Oil & Gas Corp. (YOGC)
(SPA) to acquire Austrian firm OMV’s assets in 12.5% and Jersey-registered Yemen Resources
Yemen in a deal worth just over $21.6mn. Ltd (YRL) 6%. According to the press release,
The assets comprise Block S-2, which con- production from the field averaged 7,400 bpd
tains the 6,000 barrel per day (bpd) al-Uqlah with the field in its ‘primary depletion’ stage,
oilfield, Block 3 ‘Jardan’ and Block 70, which though it holds “highly material unexploited
are in the exploratory phase and have esti- potential”.
mated resources of 60mn and 70mn barrels Production was sustained by regular drill-
respectively. ing activity at around 15,000 bpd until 2015,
According to a press release by the par- when force majeure was declared, and no wells
ent company, Zenith Netherlands has paid a have been drilled since.
deposit of $4.3mn which will be credited back Oil flows resumed in 2018 at a rate of 17,500
to the buyer “as part of the purchase price upon bpd but had fallen to 6,000 bpd by the start of
completion”. January 2022 owing to a lack of drilling. S-2
Zenith CEO Andrea Cattaneo said: “The production costs are around $28 per barrel.
acquisition of OMV Yemen represents a very The Austrian firm also holds a 34% working
significant milestone for Zenith Energy. The interest in Block 3 and 19.24% in Block 70.
existing production from the asset and, more Gas potential across the three assets is esti-
importantly, the near-term future oil and nat- mated by OMV at around 571bn cubic feet
ural gas production, indicated by the size of (16.2bn cubic metres), with discussions ongo-
the reserves, position Zenith on an extremely ing regarding offtake agreements, including
exciting organic growth trajectory.” the potential link-up to the Yemen LNG plant
The deal follows an announcement by at Balhaf.
OMV in June that it would sell the assets as Zenith added that it could also “explore the
part of its plans to shift its strategic focus away construction of a gas-to-power (GTP) plant,
from oil. as successfully carried out in Italy, to commer-
Ahead of the deal’s potential conclusion, cialise gas production and provide additional
OMV operates Block S-2 and holds a 44% electricity supply to the local economy.”™

P10 www. NEWSBASE .com Week 01 04•January•2023