West Africa major focus of future E&P spending

Global E&P expenditures are expected to top $130 billion in 2003. West Africa's vast deepwater frontiers will receive a fair portion of those dollars in the form of exploratory drilling.

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Judy Maksoud
International Editor

Global E&P expenditures are expected to top $130 billion in 2003. West Africa's vast deepwater frontiers will receive a fair portion of those dollars in the form of exploratory drilling.

According to analysts at Douglas-Westwood, $48.6 billion will be spent on the subsea sector over the 2003-2007 period, with West Africa seeing 25% of that amount.

As world dynamics impact the global energy market, West Africa will play an expanding role.

Mauritania

Woodside Petroleum evaluated the 110-MMbbl Chinguetti field off Mauritania last year. Ching-uetti is to begin production by mid-2005. Joint venture partners have not yet approved a develop- ment plan for the field. When a development plan has been approved, tenders will be issued for the development facilities. Work should begin in 2004.

In 3Q 2002, Mauritania finalized its ultra-deepwater acreage boundaries and announced its readiness to begin talking with interested companies.

Equatorial Guinea

Amerada Hess made six significant oil discoveries last year in blocks F and G in the Rio Muni basin. Five of the finds – Abang, Akom, Ebano, Elon, and G-9 – were incorporated into the Okume-Oveng field complex. The G-13 discovery is the only one of Amerada Hess's discoveries that is not part of Okume-Oveng.

In March 2003, Amerada Hess announced the G-13-2 discovery on block G, only 2.3 mi from the G-13 well and 13 mi south of the Ceiba field.

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In September, Marathon Oil got government approval for the Alba field Phase 2A expansion project, which will increase gross condensate production to 46,000 b/d when it is completed in 4Q 2003. Two new platforms will be installed, and several production and gas injections wells will be drilled.

Côte d'Ivoire

Last June, Canadian Natural Resources was granted rights to explore block CI-400 offshore Côte d'Ivoire. CNR will have two years to acquire and interpret seismic data before making a decision on development. The company has identified several years' worth of development off Côte d'Ivoire. CNR budgeted $280 million for West Africa in 2003 to cover drilling and completion at Espoir, drilling on Acajou, and commencement of development drilling on Baobab. Baobab has been pushed back. CNR says first oil is not due until 2005. Kossipo, southeast of Baobab, which CNR had held out hope of developing, is disappointingly non-commercial.

The good news came from the Espoir field, which delivered first oil early last year.

Nigeria

Nigeria saw eight discoveries in 2002 and a fair amount of deepwater field development. Agip-operated Okono, Shell-operated Ea, and ExxonMobil-operated Yoho all began production in 2002.

In October 2002, ExxonMobil began construction on the deepwater Erha development. Erha, with recoverable resources of 500 MMbbl of oil, is being built to operate as a hub for future OPL 209 deepwater developments. Full field start-up is scheduled for late 2005 using an FPSO tied to 24 subsea wells.

In March 2003, J. Ray McDermott completed the Amenam/Kpono AMP1 production platform for TotalFinaElf. TFE will soon bring the field onstream. Added production from the project will move TFE to fourth place in oil and gas production off Nigeria.

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In January, Texaco Nigeria Outer Shelf Ltd. confirmed the deepwater OPL 218 Nnwa gas discovery with the completion of the Nnwa-2 appraisal well. The results of Nnwa-2 show gas reservoir continuity across the Nnwa structure, part of which extends into block OPL 219.

ChevronTexaco decided to drop development plans for Tubu in the West Delta as a result of questionable economics. This cancellation has left Agbami as the only large Chevron-operated project off Nigeria.

Gabon

In September 2002, Vaalco Energy Inc. began production from the Etame field off southern Gabon. The field is producing more than 14,500 b/d of oil. Vaalco planned a 3D seismic survey near the field for this year.

In 3Q 2002, Perenco began production from the offshore Ompoyi oil field, which is expected to produce 6,000 b/d.

In March of this year, Tullow Gabon Ltd. signed a production sharing contract with the Gabonese government for the 5,442-sq-km Kiarsseny Marin area in the Northern Gabon offshore basin. Three small discoveries have been made on the Kiarsseny Marin concession, and 24 wells have been drilled. Tullow is planning an exploration and appraisal program soon, drilling the first of two commitment exploration wells within the year.

Deepwater finds off Gabon continue to elude Agip, which drilled several dry ultra-deepwater holes. Agip completed its commitment on its first block but has an obligation to drill one more well on the Chaillu Marin block before May 2004.

Gabon produced more oil than forecast for 2002, partly because of a number of small oil fields. Independents like Pioneer Natural Resources and Vaalco Energy are turning a profit with small projects that larger operators have eschewed.

Angola

Last September, Sonangol and BP discovered oil with the Plutão well in ultra-deepwater block 31. The block covers 5,349 sq km and lies in water depths of between 1,500 m and 2,500 m.

Exxon also had a deepwater find in September 2002. The Reco Reco-1 well on block 15 was drilled in 4,718 ft of water. The latest discoveries indicate that block 15 is a world-class development, with potential recoverable reserves of more than 3.5 Bboe.

In August 2001, Exxon began construction on the largest deepwater development off West Africa. The $3-billion Kizomba A project is expected to recover 1 Bbbl of oil beginning in 2004.

Last June, Exxon began construction on the deepwater block 15 Xikomba development. Xikomba is expected to recover 100 MMbbl of oil when it comes onstream late this year.

November 2002 saw the announcement of the first newbuild liquefied petroleum gas (LPG) FPSO to be built for operation off Angola. The Sanha LPG FPSO's construction ushers in a new means of moving gas from West Africa fields operated by Sonangol, ChevronTexaco, TotalFinaElf and Agip to remote markets.

TFE confirmed another discovery in its deepwater block 17 off Angola in December. Zinia is TFE's 13th find on the block.

ChevronTexaco's Cabinda Gulf Oil Co. made its ninth significant discovery in deepwater block 14 in December as well. Negage is 29 mi southwest of Gabela, discovered earlier this year.


Drilling the frontiers

Guinea Bissau

Premier Oil drilled the Sinapa well in block 2 offshore Guinea Bissau in 2002, the first offshore well in almost 10 years. Later in the year, Premier announced plans to drill two wells in blocks 4 and 5 toward the end of 2003. All of the offshore wells drilled to date have had oil shows.

Offshore blocks are available, and there is a poss-ibility of additional deepwater licensing soon.

Ghana

In October 2002, Dana Petroleum completed the shallow-water WT-2X well in the Western Tano contract area as a follow-up to the WT-1X well drilled two years prior. The well found oil and is being assessed for commerciality.

Benin

Kerr-McGee drilled a duster with the first deep-water well ever drilled offshore Benin. Following the Fifa-1 disappointment, Kerr-McGee found hydrocarbons with Hihon-1, its second explor-atory well on block 4

Congo

Agip made one oil discovery off Congo last year, the Awa Marine 1 well on the Marine X permit. The only other find was Anadarko's Rita Marine 1 in the Marine 1X permit, which was abandoned as non-commercial.

Namibia

Vanco Energy of Houston carried out a 3D survey in 2000, followed by 2D seismic over the Kunene prospect in block 1711 in the Namibe basin. Having studied the resulting data, the company is planning to drill a well in its acreage offshore Namibia this year.

Another promising prospect is Onjou in the Orange basin, the southernmost basin offshore Namibia, where the Kudu gas field is located. A 1,060-km seismic survey is planned for Onjou in the near future.


North African Activity Morocco

Last February, Samir, a Moroccan oil refiner, announced it would invest up to $40 million in oil exploration over the next several years. First to be explored was the Atlantic coastal province of Essaouira. Plans were made to look at the southern Moroccan offshore.

In mid-2002, TGS-Nopec began a new non-exclusive 2D seismic program offshore Southern Morocco. About the same time, the exiled government of Western Sahara announ-ced the signature of a technical cooperation agreement with Fusion Oil to evaluate offshore petroleum potential. Fusion is to conduct an exclusive study to determine prospectivity of Western Sahara's offshore.

No immediate drilling is planned, and plans will depend on resolution of conflicting claims to the offshore region.

Egypt

In April 2002, BP said it would invest $1 billion in existing oil and gas ventures in Egypt over the next three years. BP's offshore Egyptian interests lie in the Mediterranean and in the Gulf of Suez.

Early this year, BP won exploration rights in the South Abu Zeneima and LL87 blocks in the Gulf of Suez.

The initial concession for the 150-sq-km South Abu Zeneima is for three years, with two optional extension periods of three years each. BP plans to spend $7 million in the first three years and plans to drill two more wells and to spend $10 million more over the extended contract periods. Drilling is planned for later this year.

The initial contract period for block LL87 is one year. BP will spend $5 million and drill one well during the first year and plans another $5 million in expenditure during the two-year extension.

BP Egypt will drill three exploratory wells in the Gulf of Suez this year.


Setting the stage for drilling

Senegal

Petrosen, Senegal's national oil company, is offering six offshore blocks, three on the Senegal shelf and three in deeper water.

In October 2002, Fortesa International began onshore gas production from its Gadiaga development at 2 MMcf/d. Fortesa is reportedly pursuing a license for the adjoining offshore field.

Sierra Leone

The government of Sierra Leone will close bids for its first International Petroleum Bid Round on May 30. TGS-Nopec is offering multi-client 2D seismic data covering a 36,000 sq km offshore area.

Cameroon

In December 2002, Tullow Cameroon Ltd. and partner Addax Petroleum Cameroon Ltd. signed a concession contract with the Cameroon government for the shallow-water Ngosso concession in the Rio del Rey basin. The 474-sq-km area covers blocks MLHP-9 and PH-48a, near Nigeria. Ngosso contains several small oil discoveries.

A 200-sq-km 3D seismic program began early this year. Two commitment wells will be drilled in 2004.

Early this year Syntroleum Corp. and EurOil Ltd. signed an agreement to jointly negotiate a production sharing agreement with the Republic of Cameroon to produce gas from block MLHP-4. The agreement also calls for joint assessment, development, and production of the Sanaga Sud gas and condensate field, which lies within block MLHP-4 in the Douala/Kribi-Campo basin.

The two parties plan to negotiate and execute a joint operating agreement by mid-year 2003.

São Tomé & Príncipe

Squabbling between Nigeria and São Tomé & Príncipe (STP) over the Joint Development Zone continued throughout 2002. The de Menezes government finally made some headway early this year, negotiating new contracts with ExxonMobil and Nigeria's Chrome Energy Corp. for preferential blocks in the JDZ. This milestone will likely expedite the licensing process in the shared region of the Gulf of Guinea.

Petroleum Geo-Services has signed a revised offshore oil exploration agreement that covers portions of STP's exclusive economic zone as well as the JDZ.


South and East Africa activity

South Africa

South Africa's Petroleum Agency SA announced that deepwater acreage in the Orange basin on the west coast will be made available.

That Seismic Petroleum Agency SA collected collaboratively with Jebco Seismic shows a new petroleum system on the east coast as well. Initial work indicates the presence of wet gas and oil.

Forest Oil did considerable drilling in the Ibhubezi gas/condensate field in block 2 off the west coast. Development will only be undertaken if Forest can find a market for the produced gas.

Tanzania

Late last year, Aminex PLC, announced a strategic partnership for developing its Tanzania interests. Aminex's Tanzanian subsidiary Ndovu Resources Ltd. signed a farm-in agreement with Romania's state oil company Petrom SA.

Aminex and Petromar SA, a Petrom subsidiary, executed a heads of agreement to drill two wells in the Nyuni field, the first of which was to spud in late March 2003.

Madagascar

Vanco Energy contracted for a 2D seismic survey over the deepwater Majunga Offshore Profond block in 2001. Results of that survey confirm that the region holds hydrocarbon bearing structures. A second survey gathered in 2002 will fill in the grid.

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