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Sonangol, Congo’s Cohydro in Talks to Develop Shared Oil Block

Jan. 29 (Bloomberg) -- Sonangol EP, Angola’s state-owned oil company, and Democratic Republic of Congo’s Cohydro plan to develop a shared offshore oil block, Congolese Oil Minister Crispin Atama said.

Angola and Congo each control half the block in the so-called zone of common interest in the Atlantic Ocean off the coast of the neighboring countries and which is linked to billionaire Israeli investor Dan Gertler.

“We are in talks with the Angolan authorities to see in what way the two national companies, Sonangol and Cohydro, can begin to explore and exploit,” Atama told reporters today at the iPAD oil and gas conference in Kinshasa, Congo’s capital. “I think the negotiations are going well.”

Congo produces about 25,000 barrels of oil per day and plans to increase output through drilling near its eastern borders with Tanzania, Burundi, Rwanda and Uganda as well as in its central basin. Congo and Angola signed an accord in 2007 to jointly develop the shared area, which borders other offshore blocks whose ownership is disputed by the two countries.

Gertler’s Nessergy Ltd. signed a production-sharing agreement in 2006 with Congo and Cohydro to develop the block, according to a contract published on the Mines Ministry’s website. Negotiations with Nessergy that may result in a sale “are far advanced,” Atama said.

Congo may pass a new hydrocarbons code to regulate the gas and oil industries in March, he said.

“It’s a legal framework that will reassure everyone,” Atama said. “It’s an opening for all who wish to invest in the oil sector to come.”

To contact the reporter on this story: Michael Kavanagh in Kinshasa mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

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