WEST AFRICA

Super-majors blanket Angola's ultra-deepwater with 3D seismic

Three super-majors are running blanket 3D seismic surveys on three ultra-deepwater leases in the Congo Basin off Angola. Altogether, BP Amoco, ExxonMobil, and TotalFinaElf are covering a total of 15,730 sq km in the province. The survey area exceeds the combined acreage held. BP Amoco's Block 31, TotalFinaElf's Block 32, as well as ExxonMobil's Block 33 together have a combined size of 15,349 sq km, which is 381 sq km less than the total size of the three surveys.

The blocks were awarded last year by the Angolan government after one of the most competitive licensing rounds in the oil patch. Each of the leases attracted a signature bonus of $300 million. The ink on the production sharing contract agreement had barely dried when BP Amoco began acquisition of 3D over its block. In November 1999, the company began shooting 5,400 sq km 3D over its own 5,349 sq km block with a seismic vessel belonging to Western Geophysical. The extra 51 sq km of data indicates that BP Amoco was shooting into an adjacent lease.

ExxonMobil commenced its own acquisition in March 2000 using contractor CGG. The company is acquiring 4,400sq km of data, an extent that is less in size than the acreage size of 4,930 sq km.

TotalFinaElf commenced its own seismic survey in April using Western again as contractor and the seismic vessel Western Trident. Western Geophysical has the most ambitious seismic program of all: 5,930sq km, 860 sq km above the Block 32 acreage size of 5,070 sq km. These companies want to get a handle on the geology of the ultra-deepwater Congo basin early for several reasons: (1) Interpretation of a blanket 3D will provide the entire regional geology. (2) More importantly, there will be attributes that a 2D seismic survey cannot provide. Each company is committed to four wells in four years with 3D seismic data.

Shell's massive vote for Nigerian deepwater

The opening of the bids for 11 deepwater leases in Nigeria in early July revealed a huge commitment by Anglo-Dutch giant Shell - a long-term investment and control of deepwater Nigeria.

Shell offered $300 million for two very prospective leases: OPL 250 ($200 million) and OPL 322 ($100 million). The offer for OPL 250 was the largest among the majors. BP Amoco, TotalFinaElf, and Texaco did not bid. Chevron offered $25 million for each of OPLs 214, 249, and 250, while ExxonMobil bid $20 million for each of OPLs 214 and 249. Sources, however, said that ExxonMobil has an 18% stake in Shell's two bids.

Shell's bid for OPL 250 was outmatched by a partnership of two small companies, Amni and Ocean Energy, who offered $210 million for the same lease. Analysts say that Shell may win the lease on the grounds that it has better track record in the Nigerian oil industry and has shown "sufficiently keen" interest by offering as high as $200 million for a lease that is about half of a typical deepwater lease in the Angolan deepwater.

The bid is an indication of Shell's strategy to control deepwater assets in the prolific west central Niger Delta deep offshore. The company has a 41% partnership with operator ExxonMobil in OPL 209. It holds 49.8% with operator Agip's 51.2% in OPL 316 and 23% to Agip's 77% in OPL 211. Shell is 55% operator of OPL 212, (which holds the 813 million Bonga Field). All these leases are located in the central west Niger Delta deep offshore and are relatively close to the production facility that Shell proposes to install to produce the EA Field.

But more crucial to Shell today is that deepwater resources allow the producer to move further away from the increasing threat of host communities in its onshore oilfields. As the company with the largest acreage in Nigeria, and one whose developed asset is essentially onshore, Shell has been the most exposed to community disturbances. Its quota of Nigeria's daily crude oil production, which used to be one million, or half of the country's output, has fallen to 750,000 b/d. the decrease is a result of platform hijackings and sabotage by militant youths demanding their share of the oil booty.

Shell's current field development programs reflect the desperation to jump offshore. Bonga Field, which is scheduled to come onstream by 2002, will produce 200,000 b/d of oil at its peak. The EA Field development in shallow offshore OML 79 is also advanced. EA's $1 billion capital expenditure development will tie in the Eja Field, some 10-km west of EA on the same lease. Combined production will start in early 2003, building to a plateau of 120,000 b/d.

TotalFinaElf slowing down

After a frantic pace of activity with accompanied success in the deepwater west Africa, TotalFinaElf is slowing down. The French super-major is not taking part in the ongoing licensing round in deepwater Nigeria, even though the province is one of the hottest hydrocarbon properties on the planet. It also signaled its willingness to farm out its entire 30% interest as well as operatorship in deepwater Block 19 in Angola, barely 17 months after taking the lease. The company is similarly farming out its entire interest on the C South Block onshore Cabinda.

A data room has been opened in Paris for these two leases. TotalFinaElf shares Block 19 with Ranger (25%), Ocean Energy (20%), Sonangol (20%), and Naphta (5%).

TotalFinaElf is doing well enough in West Africa. It has a net liquid production of 600,000 b/d in the province. In Angola, the Girassol development is ongoing and the Dalia Field is also looking forward to coming onstream.

In Nigeria, it announced the successful testing of two oil sands encountered in Akpo-1 in the deep offshore Eastern Niger Delta. With 9,000 b/d of oil flowed during the drill stem test, the company thinks reserves may be in excess of 400 million bbl, a company spokesperson said. The first appraisal well, Akpo-2, is currently being drilled.