CPC Corp., Taiwan’s state-owned oil supplier, is expected to start oil exploration in Somaliland in 2023 at the earliest after signing a deal to take a stake in an oil field in the East African state.
In a statement released on Tuesday, CPC said it signed a farm-out agreement on Dec. 15 with United Kingdom-based Genel Energy PLC to establish a partnership to explore oil in Somaliland by taking a 49-percent working interest in the African country’s SL10B/13 oil exploration block.
In a separate statement, Genel Energy said CPC will own the working interest in the SL10B/13 block for a cash consideration of 49 percent of all of Genel’s historic back costs, plus a cash premium.
According to CPC, approval for the SL10B/13 block, which has an area of 18,000 square meters, has been secured by the Somaliland government for exploration.
Under the agreement, CPC said, Genel Energy, which will own the remaining 51-percent interest in the SL10B/13 block, will continue to serve as the operator of the oil exploration field, and the partners are planning to begin exploration as early as 2023.
In response, the Somaliland Representative Office in Taiwan said they welcomed CPC’s investments, adding that Somaliland and Taiwan are expected to intensify their efforts in economic cooperation.
According to the office, the deal was signed after more than one year of negotiations involving the Somaliland government, the Somaliland Representative Office in Taiwan, the Somaliland energy authorities, and CPC.
CPC said Genel Energy is also planning to use the port at Berbera, which is about 150 kilometers away from the SL10B/13 block, as a gateway to provide a route to link the oil field to international energy markets in the future.
Genel Energy said Somaliland has significant underexplored potential, with geology analogous to Yemen.
The SL10B13 block is highly prospective, with multiple stacked prospects with more than 5 billion barrels of prospective resources identified from the interpretation of the 2D seismic data acquisition completed in January 2018, Genel Energy added.
“Somaliland is a highly-prospective and largely unexplored region, with a compelling technical case for the drilling of a well,” Mike Adams, technical director of Genel Energy, said in the company’s statement.
“Oil seeps confirm a working petroleum system, and one prospect alone could target over half a billion barrels across multiple stacked reservoirs. Being able to drill this at a low cost to Genel, with a clear route to market in a successful case, fits with our strategy,” Adams said.
Genel Energy has estimated that a well can be drilled in the block for a gross cost of US$40 million.
CPC said the company has set its sights on deepening Taiwan’s ties with Africa through energy exploration cooperation and is looking forward to striking more commercially valuable deals to explore oil reserves in the continent.
CPC Corporation, Taiwan
CPC Corporation, Taiwan, formerly known as Chinese Petroleum Corporation is primarily engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The Company offers products such as industrial oil, motor oil, lube oil, marine oil, RBU products, LNG products, SNC products, and LPG products. The Company is also involved in the production and sale of petrochemical products, such as automotive gasoline, aviation fuel, diesel fuel, and fuel oil. The Company also operates filling stations and aviation fueling stations. In 2019, it had USD 33.71 billion in revenue and a reported 15,836 employees. CPC is committed to sustainability and is a member of the World Business Council for Sustainable Development.
Established in Shanghai on June 1st, 1946, Chinese Petroleum Corp. (CPC) was founded and operated by the government under the direction of the Resources Committee (the forerunner of the State-Owned Enterprise Commission, Ministry of Economic Affairs). In 1949 CPC followed the government in relocating to Taiwan, setting up headquarters in Taipei under the direction of the Ministry of Economic Affairs.
At its 550th meeting in February 2007, the Board of Directors approved a change in the name of this company from Chinese Petroleum Corporation to CPC Corporation, Taiwan, retaining its “Chinese Petroleum” name in Chinese, its logo, and its “CPC” name in English. The objectives of this change were to expand the firm’s international business, reinforce the principle of keeping roots in Taiwan, and extend the precious reputation that the company has built up over the decades.
CPC now operates two refineries in Taiwan with a combined daily refining capacity of 600,000 barrels. To ensure stability, CPC works to both maximize procurement on long-term contracts and to diversify its sources of crude oil, which is imported from the Middle East, United States of America, South-East Asia, Africa, and other sources such as Azerbaijan and Brazil. Refined products are primarily exported to Korea, Indonesia, the Philippines, Pakistan, Singapore, the UAE, Papua New Guinea, and Australia, and are increasing year by year.
CPC also operates eight mining fields in six countries including three located in the United States, Africa, and Australia.
Acting Chairman and President Shun-Chin Lee is synonymous with some of CPC’s greatest achievements in the past decade, having climbed his way up the ladder after joining the company as a Shift Engineer in 1980. Lee’s disciplined, hardworking, logical, and entrepreneurial spirit shined even during his early years with CPC. These admirable qualities led to his promotion to Plant Director of the Kaohsiung Refinery in 2010, Chief Executive Officer of the Refining Business Division in 2015, Vice President of CPC in 2017, and finally, President of CPC in 2018.
No.2, Tsonan Rd. , Nantzu Dist., Kaohsiung, Taiwan 81126 R.O.C
Cable： CHINOL TAIPEI
Exploration & Production Business Division
No.140, Zhongzheng Rd., Miaoli City, Miaoli County 360, Taiwan (R.O.C.)
To obtain a controllable and stable oil supply, CPC has engaged in sole-risk operations with foreign governments and cooperative exploration with other state-owned petroleum companies or large international oil companies. These exploratory operations have continued many years, covering the Americas, the Asia-Pacific region, and Africa.
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