Delek Group (TASE:DLEKG) subsidiary Delek Energy Systems (TASE:DEOL) is again drilling for gas and oil in Vietnam, after a three-year hiatus. Delek and its partners in the concession have prepared a drilling plan for 2005, at an investment of $4.6 million. Britain's Premier Oil plc (LSE:PMO) will make most of the investment in the concession.
Delek owns 25% of the concession. Samedan Oil Corporation of the US sold its 75% stake to Premier Oil six months ago. The partnership previously carried out a number of drillings without finding commercial quantities of gas or oil.
The concession covers 6,900 square kilometers in the South China Sea, in 100-meter deep water 400 kms southeast of Vietnam.
The Vietnamese government has an option to buy 15% of the concession rights from Texan company, Opeco. The Vietnamese government also has 3.8% in royalties rights.
Under an agreement with the Vietnamese government, Premier Oil will bear the full cost of the drilling. The Vietnamese government will bear 25% of additional drilling, if approved. If only one drilling is made during 2005, Delek's cost could amount to only $60,000-200,000.
Published by Globes [online], Israel business news - www.globes.co.il - on December 13, 2004