JDZ Block 2 The ‘Bomu 1’ exploration well, drilled in the second half of 2009, was completed under budget and discovered dry gas in a number of formations. The Joint Development Authority (‘JDA’) awarded two six month extensions to the operator, Sinopec, and its exploration partners for them to complete the evaluation of the results from ‘Bomu 1’ including reassessing the prospectivity of the remainder of the block.
In 2011, Sinopec reported the results of the evaluation of ‘Bomu 1’. It was confirmed that the ‘Bomu’ gas discovery, which is small for deep water, was uneconomic in current conditions and that the rest of the block had insufficient prospectivity to justify entering the Phase 2 Exploration Period with its obligatory well. A further one year extension was granted by the JDA to end in March 2012 but, nothing occurred to change conclusions of the post Bomu 1 evaluation. With the exception of ERHC, the remaining participants, including Sinopec, have now informed the JDA that they are declining to enter the Phase 2 Exploration Period and are relinquishing the block. The expenditure made on JDZ Block 2 has been completely written off in 2011 accounts.
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