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Pioneer Subsidiary Abandons Gulf Of Guinea Drilling Talks
215 words
7 February 2006
15:52
Dow Jones International News
English
(c) 2006 Dow Jones & Company, Inc.
LONDON (Dow Jones)--U.S. energy firm Pioneer Natural Resources Co. (PXD) said Tuesday its subsidiary has abandoned negotiations for drilling rights in the Gulf of Guinea in two blocks jointly owned by Sao Tome and Principe and Nigeria.

A company spokesman said Pioneer Resources Africa Limited couldn't reach a deal with authorities to drill in Blocks 2 and 3.

The Dallas, Texas-based company had no plans to reenter negotiations with authorities under current negotiating plans, the spokesman said.

The proposed drilling area is located in the Joint Development Zone, or JDZ, in between Nigeria, Africa's biggest oil producer, and Sao Tome and Principe, Nigeria's island neighbor.

Many Western oil companies hope to procure drilling rights in the JDZ. Some studies estimate the area could have around 10 billion barrels of crude oil.

Chevron Corp. (CVX) last month began exploration drilling in the deepwater Block 1, located in 5,700 feet of water. Chevron is the operator of the block with a 51% share of the block, while ExxonMobil (XOM) has a 40% interest and Norwegian firm Equity Energy Resources the remaining 9%.

-By Spencer Swartz, Dow Jones Newswires; [phone]; [e-mail] [ 07-02-06 1552GMT ]