Baraka announced this morning that it had received formal approval from the Authority for the Promotion of Oil Research in Mali (AUREP) to transfer operatorship in Production Sharing Agreement Blocks 1, 2, 3, 4 and 9 covering about 193,200 square kilometres.

In November 2006, Baraka announced a farm-out in which Eni would take a 50% interest and operatorship of the blocks and Algerian major Sonatrach would take 25% equity.

Baraka Mali Ventures has taken a 6.25% stake and Baraka Petroleum retains an 18.75% participating interest in all five blocks. According to Baraka Petroleum, Baraka Mali Ventures is not an associated company.

Under the terms of the farm-out agreement, Baraka will recoup all past costs associated with Year 1 and Year 2 of the exploration program, and will be carried for up to $US10 million ($A12.4 million) for Year 3 expenditure program starting on April 28. Baraka’s expenditure to March 5 (excluding accruals) is about $6.3 million.

The work program and budget consist of plans to undertake magnetics and gravity interpretation studies and seismic feasibility studies over the next 12 months.

A 4000km 2D seismic program is expected to begin in the last quarter of this year.

Baraka’s expenditure budget is $280,000 for the calendar year and $4.9 million in the following year to the completion of the seismic acquisition.

Participating interests in the Malian joint venture are operator Eni (50%),

Sonatrach (25%), Baraka Petroleum (18.75%) and Baraka Mali Ventures (6.25%).