Elf has suspended the Tulipa-1 well in deepwater Block 17 after testing at least 5,000 b/d of oil. This is the first test and the total flow rate may be higher. The gravity of the oil was not disclosed. The well was spudded on 26 April 1999 by the semisubmersible Jim Cunningham, which has now transferred to a new exploration location Orchidea-1 on the same lease. Previously, Elf had suspended the development well, Dalia-1, on the same lease, after testing 11,000 b/d of oil on Lirio-1, in what continues to be a spate of successes on the lease.
Shell trying to confirm Nnwa extension
Shell is drilling Doro-1, in the deep offshore lease OPL 219, to confirm the extension of Statoil's successfully tested Nnwa structure into their own acreage. The well was spudded on June 1. Statoil's Nnwa-1 was announced as a discovery well in February 1999, with 310 ft of net pay of oil in a stack of reservoirs in OPL 218. The well was not tested. Statoil never put a figure on the reservoir volume, but it was good enough to stop them from pulling out of Nigeria.
Before the Nnwa discovery, Statoil had drilled five unsuccessful wells in four blocks in Nigeria's deep offshore Nigeria. The Nnwa structure was drilled less than 1 km west of the lease boundary between Shell's OPL 219 and Statoil's OPL 218, prompting speculation that Shell might be willing to test the structure. The company is using the Sedco 709 rig, which is expected to proceed to Côte d'Ivoire in August to drill Ocean Energy's deepwater well Bandana-1.
Gabon: activity shifts to a crawl
After a lackluster deepwater licensing round, things are quieter in Gabon, especially offshore. Oil and gas activities crawl on, belying the fact that this is the seventh largest store of oil in Africa, and one of the 38 countries in the world with an excess of 1 billion bbl in reserves. There hasn't been much new exploration news to report since April, when Elf, the most active company in Gabon, relinquished two offshore leases, Sika and G4 143 Falaba Marin.
In other activity, at the end of May, Arco finally spudded the second well on the Otiti Block. Otipad-2 (formerly Padouk-2) is located in 650 meters water depth in the Gabon Coastal Basin. The first well on the structure was suspended with shows. There were no tests.
Seismic carpeting in deep offshore Angola
The deep offshore Angola must be one of the world's busiest sites for economic activity. As companies make one discovery after another, each discovery hinting at several hundred million bbl of reserves, they want to acquire more 3D seismic data to create a better understanding of the basin (the oil generating machine) as well as characterizing the reservoirs.
Two seismic vessels belonging to Western Geophysical have been active in deepwater Angola since February 1999:
- S/V Western Regent is doing a 3,600-sq km survey in Texaco's Block 22
- S/V Western Legend is completing an undisclosed amount of 3D seismic data in BHP's Block 21.
In March, Western commenced a new phase of the 35,000 sq km non-exclusive speculative survey over both licenses and open deepwater coverage, of which 16,000 sq km has been acquired. Sonangol and Western announced the availability of 6,920 sq km of this data, shot over undesignated ultra-deepwater acreage, south of Norsk Hydro's Block 34 in the Kwanza Basin.
Agip has completed 60% of the 4,900-sq km 3D seismic data being acquired over Block 25. Exxon commenced an undisclosed coverage of 3D over its hugely successful Block 15 last March. In Block 24, Exxon has postponed its proposed seismic program, but it is still in the planning mode. Fina is currently covering the northern part of Block 19 with 2,500-sq km of 3D data.
Nigeria embarks on cleanup of oil sector
The recent suspension, by Nigeria's President Olusegun Obasanjo, of all contracts, licenses, awards, and approvals made by his military predecessor between January and May 1999, sent a strong signal to the local and international communities on the desire of the newly elected President to weed out corruption.
The major target of that suspension was the grant of 11 deepwater leases by the outgoing military government to companies that have been widely identified by the local press as fronts for the departing military generals. "The awards were parting gifts for the generals," one local newspaper reported. As has been the case in Nigeria in the past eight years, the awards did not go through any bidding process and the grants were made under the indigenous policy, namely that "no foreign company shall henceforth be granted any oil prospecting lease directly in Nigeria."
Instead, they [foreign companies] were expected to go into technical partnerships with the indigenous holders. At the time of this writing, a review panel had been set up to
look into the awards. Allottees had begun preparation for their defense of the awards to the review panel. In the meantime, the majors returned to their drawing boards to prepare fresh bids for the blocks in anticipation of an open competitive bid.
The suspension did not come as a surprise to most observers. The new president, who ran the country as a military general between 1976 and 1979, campaigned as an anti-corruption crusader, and was reported to have become angry when he learned of the deepwater leases awarded to the last military administration. A daily newspaper, The Guardian, reported that there was an understanding among prospective technical partners not to seal any agreement with the indigenous holders until the new civilian government came in.
The president, as part of his campaign, retired the top brass of the police force, appointed a new governor of The Central Bank on the day of his inauguration and promoted a top geologist, Gaius Obaseki, to the post of the chief executive of the state oil company, NNPC. He also brought in the incumbent secretary of OPEC, Rilwanu Lukman, as adviser on petroleum affairs.
The new president faces the challenge of old habits. In the last five years, oil prospecting leases have become part of the gratification to cronies of the military. In 1991, the first lady's fashion designer was awarded a deepwater lease. Last year, a young man won another deepwater lease for his efforts in the campaign to convert the incumbent military strongman, Sanni Abacha, into a civilian president. Some of the spokesmen of the 11 companies whose grants were suspended are already assuring prospective technical partners that they will get their leases back.