Angola Hottest of the Hot Offshore

Since the mid-1990s offshore West Africa has been a hot exploration province -- and recent regional deep water discoveries have been among the world's largest finds.

Several countries have logged discoveries, and every success fuels even greater interest in virgin territory -- indeed, despite the number of dramatic exploration successes to date, most of the deep water acreage offshore West Africa is still virgin hunting grounds, leaving plenty of room to search for that elusive elephant.

A recent report by Roger Knight, with London-based Infield Systems, and Dominic Harbinson, with Douglas-Westwood in Canterbury, England, outlines exploration and development activity in the most prospective West African countries.

Other global hot spots may emerge, of course, and other countries may attract the industry's interest, but past successes and a growing geologic knowledge of this core group of West Africa countries should keep companies busy in the near future.

Angola

Angola is currently leading the charge of West African countries exploiting deep water oil and gas resources. To date blocks 14 through 18 in the Lower Congo Basin have yielded 25 deep water finds, and several of these fields have estimated reserves of one billion barrels.

The only real failure offshore Angola has been on block 16 where, despite recording the nation's first deep water discovery at Bengo in 1996, Shell drilled a total of nine wells without making a commercial discovery. The acreage, which was believed to hold about 155 million barrels of oil, was relinquished in June 1999.

Also, block 14 has not been as prolific as operator Chevron had hoped. The firm has made several shallow water discoveries on the block, but the 60 million barrel Tomboco Field in 526 meters of water was the only deep water find until Cabinda Gulf Oil's recent Lobito 1X discovery (estimated recoverable reserves, over 274 million barrels of oil equivalent). Two additional deep water wells on the block were dry.

In other Angolan activity:

• ExxonMobil is studying a massive integrated development known as Kizombo on block 15 in 1,000 to 1,300 meters of water, with estimated reserves of around two billion barrels of oil equivalent. The block's first deep water discovery was Kissanje in 1997, which was followed quickly by Marimba, Hungo and Dikanza. In 1999 the firm added the Chocalho and Xicomba fields, and last year the firm found the Mondo and Saxi fields.
• ExxonMobil estimates recoverable reserves in excess of three billion barrels of oil equivalent on block 15. Initial development, which is valued at $3.1 billion, will center on the Hungo discovery.
• TotalFinaElf's success on block 17 is by far the most spectacular in Angola's deep water province. The firm made its first discovery at Girassol in 1996, where development is under way.
• Subsequent discoveries include Dália in 1997; Rosa and Lirio in 1998; Tulipa, Cravo, Orquídea and Camélia in 1999; and Jasmin and Perpetua in 2000.
• The four 1999 finds were in water depths of about 1,400 meters. Jasmin is in 1,292 meters of water and tested 10,800 barrels of oil a day. Perpetua, in 795 meters of water on the block's eastern section, tested 8,700 barrels a day.
• Total reserves for the block are now estimated at 3.5 billion barrels of oil equivalent. Average exploration costs for block 17 are estimated at 20 cents a barrel -- among the lowest recorded anywhere in the world.
• BP-Amoco has made three discoveries on block 18, including Platina, Plutonio, and Galio, and a fourth discovery called Paladio was made in 2000 midway between Galio and Plutonio. The new field has estimated reserves of 325 million barrels of oil equivalent.

Blocks 31-33, which lie to the west of blocks 15-18, are thought by some industry experts to contain even greater potential. The three blocks were licensed in 1999 by BP-Amoco, TotalFinaElf and ExxonMobil, respectively, with $200 million signature bonuses part of the deal.

Angola's national oil company, Sonangol, announced it will operate block 34 -- hailed as one of the world's most sought after deep water blocks -- in conjunction with Norsk Hydro as technical advisor. Norsk Hydro will have a 30 percent stake and Sonangol 20 percent. Bids have been solicited from other oil companies for the remaining 50 percent equity.