Block Energy signs agreements over two oil fields in Georgia

UK-based exploration and production company Block Energy has reached an agreement over two oil fields in the Republic of Georgia.

Under the agreement, the company will acquire the outstanding 31% working interest in Georgia Oil and Gas’ (GOG) Norio onshore oil field production sharing contract for $310,000.

The development follows the company’s previous announcement in July that it was planning to fully exercise its right to have 100% working interest in Norio before commencing a defined field development programme to enhance field production to more than 250 barrels of oil per day (bopd).

Block Energy will assume operatorship of the Norio field.

In addition, the acquisition means that the company will become the operator of the adjoining Satskhenisi field, in which it holds a 90% working interest.

In a statement, the company said: “Current production at Satskhenisi stands at 6bopd. At this level of production and due to the extremely favourable oil sharing terms associated with the Norio and Satskhenisi production sharing contracts (PSC), combining production enables Block Energy to operate both fields from one entity, benefitting from economies of scale and therefore ensuring operating costs are fully covered by existing production revenue.”

Norio is located 40km from the city of Tbilisi and has so far produced 1.9 million barrels (mmbbls) of light sweet crude oil, with current production standing at around 20bopd.

It is said to have 118.7 million stock tank oil initially in place (STOIIP), based on Schlumberger findings.

The development programme at the field will include eight re-completions / workovers of existing wells and one sidetrack.

In addition, the company plans to carry out seven reactivations and re-completions at Satskhenisi to increase production to more than 100bopd.