Under the farm-in agreement Woodside's commitment over the initial exploration period to 2007 is limited to seismic data acquisition and interpretation. Although being offshore markedly reduces the risk from land-based insurgents, the step into Sierra Leone is fraught with far more risk for Woodside than the relatively settled Mauritania, which itself experienced an attempted coup during the year.

Repsol YPF, as operator of the permits, will acquire more than 3000sqkm of three-dimensional seismic in 2004 before the joint venture's commitment to drilling before 2007.

Woodside's director of new ventures, Agu Kantsler, said the farm-in was among five to seven deepwater exploration options that Woodside was seeking in Africa in line with its strategy that identified the region as a core focus area.

"Sierra Leone offers another opportunity for Woodside to employ its sub-surface technical strengths and to spread its deepwater portfolio risk," Dr Kantsler said.

He said Woodside's regional technical evaluation suggested the area had the potential for good quality, deep-marine reservoirs and for the discovery of significant hydrocarbon volumes.

"This opportunity provides Woodside with a relatively low-risk, low-cost entry to a very large area which we can mature by using our strong technical skills and by leveraging our competence gained in the deepwater off Mauritania.

"Sierra Leone is on an encouraging path to reconstruction following 11 years of civil war and is described by the World Bank as having established 'a unique track record for a post-conflict country'," said Kantsler.