WEST AFRICA

Cote d'Ivoire's aquatory. Ashland said at the beginning of July that it had requested a meeting with Nigeria's oil minister after the ministry revoked the Kentucky-based company's license to operate in the country in June. "Ashland has requested a meeting with the minister of Nigeria's petroleum resources in an effort to clarify issues regarding the company's current business interests in Nigeria," said company spokesman Chuck Rice. "Ashland will have no further comment

Aug 1st, 1997
5africa2

Fred Akani
Lagos
Cote d'Ivoire's aquatory.


Ashland Oil ordered out of Nigeria

Ashland said at the beginning of July that it had requested a meeting with Nigeria's oil minister after the ministry revoked the Kentucky-based company's license to operate in the country in June.

"Ashland has requested a meeting with the minister of Nigeria's petroleum resources in an effort to clarify issues regarding the company's current business interests in Nigeria," said company spokesman Chuck Rice. "Ashland will have no further comment until that meeting takes place," he added.

Nigeria's oil ministry said Dan Etete, the petroleum resources minister, had ordered the cancellation of Ashland's production contracts and work permits for its employees because the US company had transferred its interests to a third party without getting the ministry's consent in advance.

The Nigerian ministry's statement said Ashland had sold its interests in the Nigerian oil contracts to Perenco Investments, a private French company.

Ashland had not formally heard from the ministry about its action apart from press reports, the company spokesman said. Ashland's Nigerian interests consist of its offshore ANTAN crude oil floating terminal which collects from six offshore fields (Adanga, Akam, Bogi, Ebughu, Mimbo, Ukpam); it also operates the onshore Izombe Field which feeds into the Brass River terminal. The overall equity interest is around 17,000 b/d.

Nigeria: increased production, reduced drilling

A combination of cashflow problems and tough luck has reduced rig activity in Nigeria by more than 20% at midyear 1997, compared with the corresponding period last year. But the industry has gone ahead to produce more oil, even from the very areas where the drilling cutback has been most pronounced.

At the end of this June 1997, 65 wells had been spudded in the year, down from 81 wells at June ending 1996. A total of six rigs have been laid down, three of them by Mobil. The reduction stems from cash flow problems instigated by the government's reduction of spending in the upstream sector by as much as 30%. It so happens that the major operating companies in Nigeria are running a joint venture system with state-owned NNPC by a ratio of 60:40 partnership on average. A 30% cutback in government spending automatically translates into severe cutback in spending by oil companies.

The reduction in drilling has also had contributions from the infant deepwater sector, where the key players have generally slowed their tempo as a result of relatively poor results in wildcat drilling. Last May, the Norwegian company Statoil, the most active deepwater operating company in Nigeria, announced a cutback in activity owing to generally poor results. The company had drilled five of the 12 deepwater wells in Nigeria, and none of them encountered significant pay enough to warrant appraisal drilling.

Yet in this era of low drilling, Nigeria is producing at well above 2.2 million b/d, the highest production figure in 15 years and 350,000 barrels higher than its OPEC quota.

The highest increase in production has incidentally come from the southeast offshore region, where Mobil and Amni Production (through Abacan Resources) are producing a total of 560,000 b/d.

UMC's three successes precede budget increase to $300 Million

United Meridian Corporation has approved a $50-million increase in the company's 1997 operating budget to $300 million to accommodate stepped-up development activity on Block B in Equatorial Guinea, accelerated development of Block CI-01 in Cote d'Ivoire, and property acquisitions currently pending closing.

In Equatorial Guinea, UMC and its partner Mobil Equatorial Guinea, have drilled their 20th successful well (in 26 attempts) on Block B. The Opalo East #1 exploratory well, located 1.2 miles northeast of the Opalo #1 well and 1.8 miles northwest of the recently announced Serpentina #1 discovery, was drilled to 7,172 ft and encountered more than 200 feet of oil sands within the Qua Iboe formation. The well tested one of two productive zones at between 5,700 and 5,900 feet at a rate of 6,200 b/d oil, a flow rate restricted by testing equipment capacity. This is the fourth new field discovery made on the northeast flank of the Zafiro complex and is from sands stratigraphically shallower than the Zafiro Field pays.

The rig that drilled the Opalo East #1 will next drill the 11,800-foot QIT #1 exploratory well two miles southeast of the Serpentina discovery well. The second rig drilling in the field has recently completed the Zafiro #10 development well, which tested 10,000 b/d. It has commenced drilling the Zafiro #12 development well.

UMC and its partner, which have drilled four exploratory and five development wells to date in 1997 on Block B, have budgeted to drill two more exploratory wells and an appraisal well on the block during the balance of the year. But the companies are seeking approval from the government of Equatorial Guinea to increase the total number of appraisal wells to be drilled this year to six. UMC holds a 25% interest in Block B. Mobil is the operator with the remaining 75%.

Production on Block B is currently 43,000 b/d. The production target remains 80,000 b/d by yearend and UMC and Mobil continue to study various production schemes to increase capacity beyond that figure.

On UMC's 75%-owned Block D in Equatorial Guinea, the company drilled the Tsavorita #2 two miles from the Tsavorita discovery well in an attempt to establish the economic limits of the field to the east. Drilled to a total depth of 5,000 ft, the well tested oil from two zones, but rates were not sufficient to confirm commerciality with the two wells drilled to date. The completion of a fully processed 3D seismic data set covering all of Block D and further evaluation of the Tsavorita #1A and #2 wells will lead to additional appraisal drilling in the Tsavorita Field and testing of other exploratory prospects. UMC operates the 190,000-acre Block D and its partner, Yukong Limited, holds a 25% working interest.

A well drilled as a northern extension of UMC's Lion oil field on Block CI-11 in Cote d'Ivoire resulted in a new fault block discovery. The Lion #D-2 exploratory well, directionally drilled to a location approximately one mile north of the nearest Lion producing well, encountered 140 feet of oil and gas pay in multiple zones. Later this year, the company plans to drill downdip to the north of the Lion #D-2 to determine the extent of the oil columns. Also on Block CI-11, the Panthere #D-1, a northern exploratory stepout well drilled in a new fault block in the Panthere natural gas field, encountered 70 feet of net pay in the Panthere sand. The Panthere #D-1 was directionally drilled to a location 1-3/4 miles northwest of the nearest producing well in the Panthere Field. Both the Lion #D-2 and Panthere #D-1 wells, which are additive to field reserves, have been temporarily suspended. Following the installation of the new "D" guyed tower platform (water depth 170 ft) in July, the two wells will be completed.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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