Two foreign companies exploring for oil in Seychelles have confirmed they would start drilling for oil in the Indian Ocean archipelago by the end of 2012, the finance minister said.
Finance Minister Danny Faure told parliament a US government delegation had visited Seychelles recently to discuss the possibility of technical assistance in areas of training, regulation and management of its oil industry in view of its potential and the complexity which it entails.
“The government hopes that the effort bears fruit and that should Seychelles make any oil discovery, we will embark on another phase of our development. We can however only plan for this once there is clear evidence of a commercially viable find,” Faure said in his budget speech, reports Reuters.
“We now have a research company carrying out seismic studies in our territorial waters. They will cover 18 thousand km of lines in this exercise,” Faure said.
“After this phase, other companies will be invited to do further exploration and part of this information will also be used by two companies already in Seychelles to determine the location for drilling. Both companies have confirmed that they will start drilling by the end of 2012.”
Faure did not name the companies to carry out the drilling.
Oil could become a leading source of income for the heavily indebted Seychelles if recent seismic surveys suggesting large hydrocarbon reserves are correct, the government has said.
The tropical archipelago has signed a production agreement with East African Exploration (EAX) for a largely overlooked area of seabed that the Dubai-based company thinks could hold billions of barrels of oil.
EAX, a subsidiary of Black Marlin Energy Ltd., conducted a two-year study of 43,000 square kms (17,000 miles) that involved shooting 3,650 kms of new seismic data, and said it had signs of a huge reserve within the offshore sector of the Seychelles plateau.
Best known as a luxury destination for holidaymakers, the country of just around 85,000 people expects strong economic growth this year and next, showing a strong recovery from 2008 when foreign exchange reserves were nearly exhausted.
The Seychelles, a palm-fringed tourism paradise, is considered one of Africa’s most prosperous and stable countries.
Africa has become a new frontier for oil explorers as instability in the Middle East, fears of energy nationalism in South America and Russia and high demand from Asian economies drive prospectors off the beaten track in search of reserves.