Zenith Energy Forms New Congo-Brazzaville Joint Venture
Calgary-based international E&P company Zenith Energy Ltd. has signed a joint venture agreement with an unnamed Congolese oil & gas company for the potential acquisition of an onshore oil production license in the Kouilou region of the Republic of Congo.
The license is in the vicinity of the Tilapia field that was acquired by Zenith in May this year through its purchase of Anglo African Oil & Gas Congo SAU from Anglo African Oil & Gas Plc. While production from the target asset is currently suspended pending the award of a new license, it previously recorded average daily production of ~300 barrels per day (bbls/d) during 2019 from the regionally-proven Mengo formation.
Under the terms of the agreement, Zenith and the local partner will jointly submit an application to the relevant authorities, including the Congolese Ministry of Hydrocarbons, for the award of a new license. Zenith will have the role of the joint operator and majority partner if the license is successfully obtained.
“The potential acquisition has two key qualities that render it highly compatible for our portfolio: near-term profitable production potential, and significant development potential to progressively maximise production on account of the potentially highly significant oil reserves in place, which will require independent evaluation under Canadian National Instrument 51-101,” said Andrea Cattaneo, Zenith’s CEO.
Prior to entering into the agreement, Zenith conducted a preliminary technical analysis of the asset as part of the due diligence activities, and expressed confidence that profitable oil production operations can be achieved following the reactivation of the license and the performance of targeted, low-intensity workover activities.
This agreement is in line with Zenith’s strategy of identifying production and development assets in Africa with material, near-term production potential. The company is currently engaged in oil & gas exploration, development, and production operations in Azerbaijan, Italy, and Congo-Brazzaville.