YAOUNDE (Reuters) – Tower Resources plans to invest at least $43 million over seven years to explore for oil in a shallow-water block in Cameroon’s Rio del Rey basin, the company and Cameroonian officials said on Wednesday.
“Our entry into Cameroon marks a shift in our risk profile from frontier to proven basins and introduces an asset with existing discoveries into the Tower portfolio,” Tower CEO Graeme Thomson said in a statement.
The Africa-focused oil and gas exploration company has a 100 percent interest in the 119 sq km (46 sq mile) Thali block.
Under a production sharing contract signed in Cameroon’s capital Yaounde, an initial exploration phase will last three years with an option to renew for two subsequent two-year phases.
Tower has the option of relinquishing the block at the end of each phase, provided the agreed minimum work has been completed.
The Rio del Rey basin lies in the eastern part of the Niger Delta and has to date produced over 1 billion barrels of oil, with an estimated 1.2 billion barrels of remaining reserves, according to Tower’s website.