West Africa

Chevron boosting oil reserves in Nigeria

Chevron boosting oil reserves in Nigeria

Chevron Nigeria succeeded in increasing its proven oil reserves for the ninth straight year. "We recorded an increase of 150 million bbl, and by year-end, total proven reserves were near 2 billion bbl," stated Ray Wilcox, the Chairman and Managing Director. Wilcox said the opportunities for increasing reserves continue to improve.

The company was recently granted 55% operatorship of a deepwater lease, OPL 250, as well as 30% non-operatorship equity in OPL 214. Both were the result of Nigeria's competitive licensing round, which ran from June to December. These are "two of the most promising offshore deepwater blocks," he said.

"Our oil production in 2000 averaged 430,000 b/d, including condensates and natural gas liquids. This figure, which is about 10,000 bbl above the 1999 level, is an all-time record. One of the major contributing factors to this achievement is our drilling performance, which was significantly higher than in previous years. We drilled more wells this year per rig, averaging about 16.8 wells per rig, against performances of 13 and 15.2 in 1999 and 1998, respectively."

Deepwater action scaling up off Mauritania

Australian independents Hardman Resources and Woodside, together with British Borneo Petroleum, are the major partners in a joint venture that proposes an April 2001 spud date for the first of three deepwater wells in offshore Mauritania.

The unnamed well will be located in 800 meters water depth. The group will use the rig Scarabeo 7. "The 2001 work program and budget were presented to the Mauritanian government in early December, and approval was obtained to drill two firm wells, and one contingent well also included in the work program," according to Ted Ellyard, Managing Director of Hardman Res-ources. "The first well is expected to spud in April 2001. The two firm wells will satisfy the contractual and farm-in obligations for Area A (Block 3 and shallow-water Blocks 4 and 5) and Area B (deepwater Blocks 4 and 5). The third contingent well will be drilled in Area C (Blocks 2 and 6) if technically and financially justified."

Mauritania remains an exciting exploration frontier, even though the country remains largely unexplored and the petroleum geology little understood by most players. "More than 20 prospects and leads are identified by Mauritania's hydrocarbon tracts," according to a statement to investors by Woodside Petroleum. "Total expected volume of oil is about 600 million bbl," the statement added. "This is supported by expert analysis carried out by De Golyer and McNaughton."

Wells in planning for offshore Ghana

The end of the year 2000 ushered in new activity off Ghana. The Devon/Santa Fe alliance has completed a site survey and is waiting on the jackup Ocean Liberator from Cote d'Ivoire to spud the Dolphin-1 well, located in the Keta permit in 100 meters water depth.

California-based independent Nuevo was expected to drill a well in the Acra-Keta permit before December 30, per the terms of the production sharing contract, but well spud of the Cougar-1 well may not proceed until May 2001. Hunt has contracted the Jim Cunningham rig to drill the WCTP-3 well in late May 2001.

Meanwhile, Ghana state oil company GNPC resumed production on the Saltpond Field, in permit 05 offshore Saltpond sub-basin in the Benin Embayment. Production resumed at a rate of 2,000 b/d of oil from two of the seven wells.

No PSC conversion for ExxonMobil

Negotiations have broken between Exxon-Mobil and the government of the islands of Sao Tome and Principe over the conversion of status of some of the country's 22 deepwater leases, from a technical evaluation agreement (TEA), to a formal production sharing contract (PSC).

Reports from ExxonMobil that the talks broke down as a result of the border dispute with Nigeria contradicts the press statements by Nigerian officials that the border dispute has been largely resolved. The border dispute is no longer an excuse, say knowledgeable officials in Nigeria's oil industry regulatory agency DPR.

The new civilian government in Nigeria has been resolving border issues it inherited from the military. Sources within ExxonMobil believe the company could not agree on essential details of the PSC as well as investment dollars on the leases. As the principal consultant on the team, ExxonMobil had the right to the first option to PSCs on the Sao Tome deepwater leases. But the stalled negotiations are holding up Sao Tome's plans to put up the leases for sale to other competitors.

Statoil running dry on Nigeria wells

Statoil apparently did not encounter commercial hydrocarbon in Bilah-1, located in water depth of 4,485 ft in OPL 218 off Nigeria. The well was plugged and abandoned at 14,718 ft without being tested. The well was drilled by the Deepwater Millenium. The actual total depth was 1,047 ft shallower than the proposed total depth of 15,761 ft. Statoil reportedly has had a string of failures in deepwater Nigeria, a situation that could call into question the firm exploration approach. Statoil managed to fend off doubts when it encountered considerable footage of oil in Nnwa (OPL 218) and Ekoli-1 (OPL 217), but critics have argued that the Ekoli-1 success was predictable in the sense that the well is located right in the Agbami structure (which was discovered in the adjacent lease OPL 216 by Texaco).

Texaco returns to Agbami field

Following a full year of detailed seismic interpretation and strategic overview of its deepwater portfolio in Nigeria, Texaco plans to return to appraisal and possible development drilling of its huge Agbami field, as well as drill two exploratory wells in another lease. A big player in Nigerian deepwater, Texaco has interests in five leases OPLs 213, 215, 216, 217, 218.

The company will drill Agbami-3 and 4 in OPL 216, where it is a 32% holder, as well as technical partner. It then plans to drill Ofuor-1 and Oduguma-1 in the lease OPL 213, where it now holds a 100% operatorship.

Coast no longer Shell's oyster

Shell is eager to get out of the deepwater lease CI-105, offshore Cote d'Ivoire. The Anglo Dutch major is selling its 55% interest in the 2,034-sq km block, offering a partial sale in the first instance - before a second well on the lease is drilled - and a full sale if the second well turns out to be unsuccessful.

Just two years ago, CI-105 was the hottest thing in deepwater Cote d'Ivoire. Operator Ocean Energy (35%) was enthusiastically advertising the lease at the Offshore West Africa Conference in Abidjan, with displays of three huge structures on seismic profiles, touting them as analogues of TotalFinaElf's 1-billion bbl Girassol oil field in deepwater Angola. The excitement petered out, however, when Bandana-1, drilled in one of the prospects, turned out to be entirely water-wet.

Ever since, Ocean Energy has been re-evaluating its opportunities in Cote d'Ivoire, while Shell has been quietly hinting of its desire to sell off all its properties in the country.

More in Regional Reports