Nigeria's state-owned oil company, NNPC, may bid for operatorship alongside other multinational and domestic companies whenever the Federal Government declares a bid round open. Oil companies are expecting Nigeria to call for an open bid exercise soon.
This would be the first such exercise since the deepwater awards took place in 1991. Some 33 blocks are up for grabs in the ultra-deepwater, ranging in water depths between 1,500 meters and 3,000 meters.
NNPC's Managing Director Jackson Gaius-Obaseki says the bid process is part of a new plan to boost the output of its exploration and production arm. NNPC's exploration and production subsidiary, Nigerian Petroleum Development Company (NPDC) currently produces about 20,000 b/d of oil.
Nigeria itself is Africa's biggest oil producer, pumping 2 million b/d of oil, more than 95% of which is produced by joint ventures operated by oil majors. President Olusegun Obasanjo said recently that his government would award new oil exploration blocks. These are expected to include 16 deep offshore allocations made by the previous military government and cancelled after he took power on May 29.
Addax enters operation
Eighteen months after it purchased the assets of Ashland Petroleum in Nigeria, Geneva-based Addax Petroleum signed its first contract for drilling a well. Addax has contracted the Percy Johns jackup for drilling in the Ebughu Field on OPL 98, near the Cameroon border. The contract calls for the drilling of one appraisal well (Ebughu-WA), one core well, and three producers. Drilling operations began inj mid-August.
Addax inherited four prospective leases, three of them offshore, from the American independent Ashland, who sold all of its upstream assets. Ashland was in the middle of developing the Okwori South field in OPL 90, in the eastern offshore. The operator expected to double its production from 20,000 b/d of oil to 40,000 b/d. However, new owner Addax put the brakes on the project immediately after it took over the leases and spent a year evaluating the prospects. The work on Ebughu WA, also in the prolific southeastern offshore Niger Delta, signals Addax's full entry as an operator.
Texaco steams ahead in deepwater Nigeria
Deepwater Nigeria showed remarkable unpredictability again with the results of two wells by Shell and Texaco. While Shell encountered only gas in a structure that was seen as a sure bet for oil (Doro-1 well; OPL 219), Texaco may have found more oil than was expected in Agbami-2 (OPL 216).
Shell drilled Doro-1 on the downdip of the same structure in which Statoil reportedly encountered substantial reserves in Nnwa-1 to the west. They were expecting an eastern extension of the oil pool, five km away. Instead, all of the objectives turned out to be gas, indicating a facies change along the way. Shell has since plugged and abandoned the well as a gas discovery at a total depth of 4,876 meters. It is the second gas well discovery by Shell, since the exciting Bonga oil find in 1995.
Last year, Shell had rated Ngolo-2, in the same lease as Doro-1, as a gas reservoir after Ngolo-1 encountered enough oil to indicate an oil field. Shell's disappointing result in Doro-1 may alert Statoil to the possibility that the oil pool being touted in Nnwa-1 may not be as significant as announced.
Meanwhile, in Agbami-2, in which drilling was underway at 13,000 ft (at the time of this writing), Texaco encountered a new 120-ft net oil pay, which was absent in the first well, and two deeper reservoirs, which confirm pays encountered in Agbami-1.
Texaco reportedly stated that Agbami is the largest field discovered by the company in the last 30 years. The company has a 40% interest on the lease and is the technical partner to the rightsholder, the indigenous company Famfa Oil. Before Agbami, the largest offshore find by Texaco was the 1969 find in Ecuador, the Shushufindi field, at 1.5 billion bbl of oil.
Côte d'Ivoire deepwater further delayed
Côte d'Ivoire's first deepwater well may not be drilled until the second quarter 2000, at least one year after the initial schedule, if it plans to use the semisubmersible rig Sedco 709. The rig has just completed drilling Doro-1 for Shell in OPL 219 offshore Nigeria. From there, plans had called for it to move to the Abidjan Margin offshore Côte d'Ivoire, to drill one of three deepwater prospects identified by operator Ocean Energy. Instead, it will proceed to drill Erha-2 for Exxon in OPL 209, 310 km to the northwest.
Ocean Energy had hoped to use the rig after the Erha-2 drilling, scheduled for completion in December, but now it is clear that the rig will remain in Nigeria where it will drill the first well in the highly prospective deepwater lease OPL 246.
Angola: Chevron ready for production
In the race for deepwater treasures off Angola, Elf Aquitaine, the French multinational, has led in the discoveries of huge oil pools. Since 1996, Elf's six discoveries range between 500 million bbl to one billion bbl in size. In a well publicized $2.5 billion field development plan for Girassol, its flagship field, Elf is embarking on one of the largest development projects offshore.
Exxon has been as visible, reporting discovery after discovery, now totaling four pools, of at least an estimated 350 million bbl each. But, while these two companies have taken most of the discovery action in deepwater Angola, it is Chevron, quiet and unsung, which will begin reaping rewards in this area before any other operator. Chevron has announced that the first oil from its field Kuito Field, in 350 meters water depth, will be delivered in December 1999, before the new millennium.
Kuito will be producing 100,000 b/d of oil by the end of March 2000, according to Jim Pearce, General Manager Asset Management, Chevron Angola. The Kuito floating production, storage, and offloading vessel is due to arrive from manufacturers in Singapore in October.
Kuito is in 350 meters water depth, easier to develop that other deeper discoveries. Kuito is also nearer the infrastructure that Chevron uses for the shallower offshore Cabinda fields.
Elf plans production for Girassol in 2001
Elf is still struggling with the strategy for developing Girassol, the major deepwater development off Angola. Elf said in February that first production from Girassol would be pushed back to the first half of 2001, from the original 2000 start. The move is meant to "optimize technical costs," but it has thrown a searchlight on the level of technology being deployed: a 300 meter-long floating platform.
The floater, able to produce 200,000 b/d and store 2 million bbl, will be connected to 23 underwater production wells at a sea depth of 1,350 meters, as well as water injection wells and subsea gas injection wells. Robots will help link cables on the ocean floor to three fixed riser towers through which they will extend to the production, storage, and offloading platform. Elf may not have had much choice in the pushback.
