West Africa

Fred Akani
Lagos

Regional Cooperation 1

As key operators, oil service companies, state oil companies and governments came together for the first Offshore West African Conference in Libreville, Gabon, 5-7 November, the most bandied phrase around the exhibition stands and the speaking tracks was "cooperation". Cooperation was stressed as a useful machinery for competing companies in the oil industry to execute projects at optimally profitable costs and to efficiently exploit resources among neighbouring countries along the west coast of Africa.

During the conference's panel of oil ministers from West African states, there was a lot of talk about how countries could help operating companies see the benefits derivable from joint energy schemes. Existing areas of cooperation in this regard include the development of the small Foxtrot Gas Field offshore Cote d'Ivoire for the joint benefits of energy consumption in both Ghana and Cote d'Ivoire. Projects that have been initiated with such focus in mind include the West African gas pipeline project, being spearheaded by Nigeria and supported by Chevron.

Regional Cooperation 2

Shell has called on other operators to cooperate with her in assembling certain forms of data and utilizing certain facilities to explore and produce deepwater plays offshore West Africa. Keynoting the second day of the Offshore West Africa Conference, Shell's Head of International Operations, Dr. Don Henery, said that the industry could cooperate in gathering data on the Metocean, (sea wind and wave data) adding "this is not proprietary". Henry said that other areas of cooperation could be rig sharing, as there were very few rigs to go round (Offshore West Africa currently has the highest rig utilization in the world); development of operating bases, as well as standardization and interchangeability of tools and processes.

He said that the metocean data gathered by Shell so far indicates, in general, that deep offshore West Africa is characterised by a benign climate, in sharp contrast to the Gulf of Mexico and offshore Shetlands where turbulent, eddy currents are the rule. "We should not bring the design experiments from the Gulf of Mexico to work in West Africa", he argued.

Some of the types of cooperation that Henry was seeking at the large forum provided by the OWA'96 conference have actually been in practice in Nigeria. Since deepwater drilling started there in July 1995, operators have been sharing rigs. All the eight wells that have so far been drilled by Shell, Agip, Exxon, BP-Statoil and the domestic company Allied Petroleum were drilled by two semisubs: Drillmar - 1 rated to 750 meters water depth and Sedco 709, which drills in excess of 1,000 meters of water. Drillmar-1 has rotated between Agip and BP-Statoil (which also drills Allied Petroleum's wells), whereas Shell and Exxon have shared Sedco-709. There had also been agreement among the members of the ad-hoc deepwater group that all well data would be traded among them.

Mozambique/South Africa

In the last week of October, Atlantic Richfield Company (Arco) signed a PSC with the Mozambique Government for a gas project in an area 60 km from the famous Pande Field. The gas project is meant for the South African market, as is an on-going gas project in the Pande Field itself. The idea of a hydrocarbon resource project in Mozambique, directed at a market in South Africa is in sync with the regional cooperation in the energy sector, sweeping the entire length of the African continent. Until two years ago, South Africa was a pariah among its neighbours, who are poorer and far less industrialized.

The country generated its energy requirements by converting coal to gas, a very expensive process.

Now it is looking to take advantage of the gas resources in Mozambique and the vast offshore store of oil in the Angolan aquatory.

Cte d'Ivoire deepwater

About now , a Shell-UMC combine ought to have finished acquiring 3D data over the CI-105, a large deepwater tract (512,494 acres) for which it signed a PSC with state company Petroci in September.

The agreement follows on the heels of Petroci's PSC with Global Natural Resources for the 250,300 acre CI-104. Incidentally, both Block CI-104, and CI-105 are the two leases carved out of CI-31. CI-104, lying in water depths of less than 200 meters, was the shallower water section of CI-31. The water depth in CI-105 ranges between 500 to 2,000 meters.

C?te d'Ivoire has simplified its fiscal regime to provide incentives for deepwater exploration and proposes to promulgate a new petroleum code, which is aimed at updating the production sharing contract.

Angolan deepwater

Amoco (50%) and Shell (50%) entered into a production sharing agreement with Sonangol to explore offshore Block 18. The block covers 5,000 sq. km and has water depths up to 1,700 meters. Exploration drilling is expected to begin in late 1997 or early 1998. Meanwhile, Energy Africa, operating with 50% interest, plans to spud a well in Block 7 sometime in 1997.

Conoco: Nigeria
OPL 74 / OML 108

The Nigerian government has approved the conversion of OPL 74 to OML 108. Conoco proposes to develop the Ukpokiti Field in this lease with three wells to be drilled in early 1997.

Equatorial Guinea

Basking in the euphoria of her recent entry into the league of oil producing countries, Equatorial Guinea is reaching out, rooting for operators to scrutinize the Rio Muni area, located far south of the oil producing Block B area. "The geology of the Rio Muni area is not very well known" says an Equatorial Guinea spokesman. "It is some 7,000 sq km in size and only five wells have been drilled to date". (None was successful).

The country is eager to expand the number of players in the country from the existing three viz: Mobil, United Meridien, and CMS-Nomenco. The spokesman said that "there are 10 blocks offshore in deepwater Nyongo Basin" which are crying out for exploration. At the Offshore West Africa Conference, Equatorial Guinea representatives claimed that the country "has the most attractive petroleum laws in the region" and that "If anyone was ready to negotiate a contract right here we can do it".