DOW JONES NEWSWIRES
U.K.-based oil and gas company Soco International PLC has built a war chest of $350 million to fund its ongoing exploration and production campaign in Africa and Vietnam, Chief Executive Ed Story said Thursday.
"This is roughly twice the amount of cash the company needs to fund its activities in the next 18 months," Story told Dow Jones Newswires.
The chief executive also expects Soco to come into a "wall of cash" in mid-2012, when production is forecast to rise at the company's TGT field in Vietnam.
Story said the cash was intended to provide the company with flexibility in its planned appraisal and production programme.
Soco recently began a drilling campaign in Congo, and confirmed plans to start production of about 50,000 barrels of oil per day at its TGT field in Vietnam.
Its chief exploration programs are in Africa, where it estimates its Nganzi block in Congo may contain 600 million barrels of oil, and its TGD interest in Vietnam.
Story said that Soco doesn't plan to use its cash on major acquisitions, though it would be interested in expanding in Congo.
Larger companies have been put off by the perceived political risk in areas such as the Congo, but views are now shifting as oil supplies in countries traditionally viewed as more politically stable become harder to access.
"The BP spill could change the focus of larger companies," said Story. "It is creating a new definition of political risk."
The U.S. announced a six-month moratorium on deepwater drilling nearly eight weeks ago in the aftermath of the Gulf of Mexico oil spill, triggered by an explosion aboard a BP PLC leased rig.
By Sarah Kent, Dow Jones Newswires; +44 20-7842-9376; sarah.kent@dowjones.com
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