6.

9
N i c aragua
Project:
Assistance to Petroleum Sector-Phase IV Country facts:
Official Name:
Cooperating institution: Republic of Nicaragua
Instituto Nicaraguense de Energia (INE)
Capital:
INE is the state organization which is responsible for regulations, norms, Managua
control and taxation of the electricity and hydrocarbon sectors. The main
cooperation between the INE and the Norwegian Petroleum Directorate (NPD) Chief of state:
is connected to the Department of Hydrocarbons in INE (Direccion General de President Daniel Ortega
Hidrocarburos, DGH), which is regulating both the upstream and downstream Saavedra (since January 2007).
activities. By 1. March 2007, the hydrocarbons division of INE has been trans- The president is both chief of
ferred to the Ministry of Mines and Energy, and Vice Minister Lorena Lanza is state and head of government.
in charge of the division.
Population:
Goal: 5 570 129 (2006)
to contribute to the economic and social development and poverty reduction
by identifying and developing new fields in the use of the country’s natural Petroleum sector, key figures:
resources, Average oil production: 0
Annual gas production: 0
Objective: to contribute to secure an environmentally sound exploration
and possible exploitation of petroleum resources by creating capacities, Organisation of the sector:
at Nicaragua’s government level. In 2007, the former INE has been
transferred to the Ministry of
Project period: 2005 - 2007 Energy and Mines (CNE), which
is regulating the hydrocarbons
Total Budget: NOK 2.25 mill sector

2 0 0 6 -2 0 07
Norwegian Petroleum Directorate
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46
6.9
The programme
Specific objectives are:
• Updating of the petroleum database
• Implementation of the monitoring system
• Analysis of new seismic data
• Updating and improving of the national
contingency plan for emergencies related to the
exploration and exploitation activities
• Training to INE’s staff through seminars,
work-shops, and courses abroad
• New promotional campaign
Major risks:
• There is the possibility, but with a low probability,
of external risks related to political unrest.
• There is a low probability for institutional risks,
such as loss of qualified staff assigned to the
Programme and affected recurrent costs as a result
of budget limitations after the end of the
Grant period.
Contact:
CNE: Lic. Lorena Lanza, Vice Minister, Ministry
of Energy and Mines, lorena.lanza@cne.gob.ni
Ing. Veronica Artiles, Head of Petroleum
Information Department, vartiles@cne.gob.ni
NPD: Mr. Fridtjof Riis, Project Coordinator,
fridtjof.riis@npd.no
Cooperating Institution
NORAD
Brief history of the project
The institutional cooperation between the INE and the
NPD was initiated in 1989, as a part of support to the
petroleum sector. No petroleum exploration had taken
place in Nicaragua since the 1970’s. In the first phase of
the programme (1989-1995), it was prioritized to organ-
ize and enlarge the existing data base and to evaluate
the petroleum potential in order to prepare for renewed
exploration. The programme has been prolonged in
order to continue the institutional cooperation during
the licensing round, negotiation phase and the following
up of the new licences. The licensing round is based on
the recent Petroleum Act, which was elaborated with the
support of the Inter American Development Bank, and
approved in 1998.
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Norwegian Petroleum Directorate
O i l f o r d e v e l op m e n t
47
The main specific objective of the phase III of the
cooperation was to assist INE in their first licensing
round in 2003 and the negotiation of exploration and
production licences in 2004-2005. INE entered into
negotiations with 4 companies. In 2005 one license
contract has been signed with one company, Oklahoma-
Nicaragua SA (Indoklanicsa), in the onshore Pacific.
In 2006 further three contracts were signed with the
companies MKJ and Infinity for 4 areas in the Caribbean
Margin. The Indoklanicsa onshore concession is now
operated by the Canadian company Norwood, which
started a drilling campaign in the end of 2006. An oil
and gas discovery was reported in February 2007.
The situation of the concessions in the Caribbean is
presently being discussed by the central government
and the local authorities of the Caribbean side, and
there has been no exploration activity there.
The current programme is a prolongation until 2007
of the institutional cooperation between INE and NPD.
The cooperation continues with technical assistance and
training. The contract for the cooperation will be signed
in 2007
Activities in 2006
In 2006, there was no NPD activity of significance, since
the political situation prior to the elections has not been
clear. NPD has been in contact with INE and with the
embassy to follow the process of establishing the new
phase IV of the programme.
Costs 2006
No costs to be reported.
Plans 2007
The Nicaragua project is awaiting the signature of the
contract between CNE and NORAD. It is expected that
the project will start up in the end of the second quarter,
and that it will involve training, assistance on updating
of the data base systems, assistance in monitoring of the
exploration activity and setting up a contingency plan.
It is expected that the project will need approximately 4
weeks of assistance. A further delay cannot be ruled out.