Rex International, a technology-driven oil exploration and production company, today announced that Akrake Petroleum SA, a wholly-owned subsidiary of Porto Novo Resources Ltd, Rex’s 70 per cent-owned indirect joint venture company, has signed a production sharing contract (“PSC”) for operatorship and a 76 per cent working interest in Block 1, Sèmè Field in Benin, West Africa. The remainder of the working interest is held by the government of Benin holding 15 per cent and Octogone Trading, an integrated energy and commodities company trading throughout West Africa, holding 9 per cent.

Zenith Energy has previously announced that the Company  has submitted an offer for Block-1 on September 22, 2022  which was approved by the Ministry of Water and Mines of the Republic of Benin. The company in a media release disclosed that the Ministry has awarded it exclusivity for a period of three months to negotiate and finalise the terms of a Production Sharing Contract (“PSC”) for Block 1 containing the Sèmè oilfield, offshore Benin.

The offshore Block 1 in Benin covers 551 sq km and is in shallow water depth of 20 to 30 metres. The block includes the Sèmè Field discovered by Union Oil in 1969. The Sèmè Field was first developed by Norwegian oil company, Saga Petroleum (Saga), and had produced approximately 22 MMbbl between 1982 and 1998, before production was stopped prematurely due to low oil prices of around US$14 per barrel in 1998.

Akrake will initially redevelop the Sèmè Field and apply the Group’s tried and tested low-cost production system comprising a jack-up Mobile Production Unit (MOPU) and a Floating Storage Unit (FSO), to restart production. Horizontal wells and modern completion technology for water control will be used to maximise total oil recovery.

Previous drillings in the Sèmè Field in 2014 to 2015 have proven additional deeper hydrocarbon accumulations of oil and gas. Further appraisal tests, including the appointment of a qualified person to independently assess the amount of reserves in the field, will be undertaken in conjunction with the early production drilling. Additional reserves and resources, if any, can be produced through the infrastructure to be installed in one of the reservoirs.

“The Rex Group has been on the lookout for new assets in different regions to mitigate geographical concentration risks, increase group production numbers and replenish reserves and resources in our current producing assets. The terms for the Block 1 PSC are favourable for an economically viable development to restart production in the short-term,” Mr Dan Broström, Executive Chairman of Rex International Holding, said.

 “We have established a good working relationship with the Benin authorities and our local partner, Octogone Trading, and look forward to cooperating with them in the Block 1 partnership. We will tap on the geological & geophysical expertise and the deep technical & operational knowhow of our teams in Norway and Oman, and establish a professional team locally, to work towards filing a Field Development Plan in 2024 to restart production. We will also evaluate exploration opportunities to unlock unexploited oil and especially gas potential in the field,” He added.