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Maersk Oil says new African licences relatively resilient to low oil price

Published 2015-11-09, 08:12 a/m
© Reuters. Maersk Oil says new African licences relatively resilient to low oil price
MAERSKb
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COPENHAGEN, Nov 9 (Reuters) - Maersk Oil, a unit of shipping
conglomerate A.P. Moller-Maersk MAERSKb.CO , said its planned
new investments in exploration in Africa are low cost and should
make them relatively resilient to weak oil prices.
The cash-rich Danish company said earlier on Monday it will
pay $365 million upfront to buy 25 percent stakes in three
licences owned by Africa Oil Corporation AOI.TO AOIC.ST in
Kenya as well as a 25 percent stake in an exploration licence in
Ethiopia and a 15 percent stake in another Ethiopian licence.
"(These licences) have potential for oil production with
relatively low technical costs and (will be) resilient to low
oil prices," Maersk Oil's Chief Executive Jakob Thomasen told
Reuters.
Shares in Toronto- and Stockholm-listed Africa Oil
Corporation soared 33 percent on the news on Monday while shares
in Tullow Oil TLW.L , which operates and controls 50 percent of
four of the licences, jumped 15 percent, indicating investors
believe Maersk Oil has paid a high price.
Maersk Oil has agreed to pay future contingent payments of
up to $480 million to Africa Oil for the Lokichar Project in
northern Kenya and southern Ethiopia, depending on the size of
the resource after final appraisal and the agreed timetable for
the first oil production.
Thomasen said oil has been found in eight areas covered by
the licences and production is expected to begin at the start of
the next decade.
Maersk Oil was also still looking for opportunities to buy
more North Sea interests, he said.
As the oil price has halved since the middle of last year,
oil firms have shelved $200 billion worth of spending on new
projects since mid-2014, according to oil consultancy Wood
Mackenzie.

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