Dana Gas signs Sharjah Western Offshore concession and gas field development

The deal marks Dana Gas' entry into the GCC exploration and production sector, and is also the first offshore upstream asset for the Company in the Middle East.

The 25-year agreement was signed by H.H. Dr Sheikh Sultan bin Mohammed Al Qasimi, UAE Supreme Council member and Ruler of Sharjah, and Mr. Hamid Jafar, Executive Chairman of Dana Gas, in a ceremony attended by H.H. Sheikh Ahmed Bin Sultan Al-Qasimi, Deputy Ruler of Sharjah and Chairman of the Sharjah Petroleum Council, and several Members of the Board of Directors of Dana Gas, including the Company's Deputy Chairman and former Kuwaiti Oil Minister, Dr. Adel Al-Sabeeh.

The concession agreement covers a total offshore area of over 1,000 square kilometres, and includes the development of the Zora gas field within Sharjah, which was discovered in 1979. The work programme will include resuming horizontal drilling of two wells originally drilled by Crescent Petroleum, completion of the drilling work, the installation of offshore platforms for immediate processing and production and the transportation of the processed gas via 25km of offshore pipeline to be installed by Dana Gas.

The Agreement also provides for important exploration works within the concession area, including geological evaluation studies, followed by seismic surveys and the drilling of exploration wells.

"We are very pleased to enter into this long-term agreement with Dana Gas, as a local and regional company with proven capabilities in all areas of the region's natural gas industry," said Sheikh Ahmed Bin Sultan Al-Qassimi, Deputy Ruler of Sharjah and Chairman of the Sharjah Petroleum Council.

Dana Gas Executive Chairman Hamid Jafar added:

"Dana Gas is proud to enter into this important agreement, marking the first exploration and production project for the company in the GCC region, and complementing the Company's assets and activities in the processing, transportation and marketing of natural gas. We look forward to a long and fruitful partnership with the Government of Sharjah in this regard."

The preliminary costs of the development phase of the project are estimated at $55m, while the exploration works are estimated at a further $65m. The 'Sharjah 2' well, which was drilled by Crescent Petroleum within the concession area in 2001, was successfully proven with an initial gas production rate of 41 million cubic feet per day from the Thamama formation.

Dana Gas has been expanding in all areas of the natural gas industry across the Middle East and North Africa Region, including the upstream exploration and production for natural gas, such as in Egypt where the Company is the 6th largest gas producer from among 64 companies, and most recently in the Kurdistan Region in Northern Iraq, where the Company is executing an important integrated project to supply gas for local power generation, including work on two major gas fields.