Dubai-based East African Exploration (EAX) will sign a production agreement this week with the Seychelles for a largely overlooked area of ocean the company thinks could hold billions of barrels of oil.

EAX chief executive Jeff Hume said the deal to be signed on Friday in the capital Victoria followed a two-year study of 43,000 sq km that involved shooting 3,650 kms of new seismic data.

The company has selected 15,000 sq km in three tranches that it believes include a series of high potential drilling targets - and it thinks there are more opportunities.

'Although we clearly cherry-picked the bits we wanted, it's by no means all the leads. Not at all. We would've liked to keep more, but that wasn't the deal,' Hume told Reuters on Thursday.

Africa has become more attractive to oil companies due to high crude prices, a thirst for oil from growing Asian economies and fears of energy nationalism in South America and Russia.

Militant violence disrupting production in Nigeria's Delta and rising taxes for operators in Algeria have also helped boost interest in blocks in the peaceful Indian Ocean.
-Reuters