Recently acquired seismic has also indicated a reservoir structure updip of the existing wells and the JV partners said that this may generate higher rates from the phase II wells.

Kalrez Energy (2.5%), and operator of the JV, KUFPEC (97.5%) shut in the wells on the 16th of May for five days to facilitate the demobilisation of the TPS installation. Cumulative production from Oseil processed through the TPS since the beginning of production on 30th December 2002 was 973,931 barrels at an average daily rate of 7,109 BOPD.

Following the shut in, the field produced at reduced rates during commissioning, from 22nd May to the end of May. The field was reopened on 22nd May 2003, with production directed to the skim oil tank to build stock until the Main Plant Facility (MPF) is ready to process the crude oil.

The estimated date by which high sulphur fuel oil and naphtha will be produced has been delayed until late June 2003, due mainly to material delivery delays for modifications. It is anticipated all three wells will be back on stream at this time.

Interpretation of the new 3D seismic located a reservoir structure updip of the existing wells. The wells were drilled based on exploration 2D seismic and consequently located too close to the oil-water contact, which explains the higher than anticipated water cuts experienced during production from the initial three wells.

Phase II development will enable the JV to develop the field from locations higher in the structure and this should enable higher rates and ultimate recoveries from these new wells. The Phase II development drilling is expected to begin 1st quarter 2004, with the first of the new wells on line April 2004.