Angola Hottest of the Hot Offshore

West Africa Elephants Abound

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.

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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.

  • Sonangol also is planning license awards for acreage lying to the west of blocks 31-34. These new offerings may not generate the intense interest as previous blocks because they are in ultra-deep water of 2,000 meters or more, and many of the major players already have a full portfolio of deepwater acreage. Few independents could afford the signature bonuses that may be demanded.

Nigeria

The first deep water acreage off Nigeria was granted in 1993, and since that time 21,000 square kilometers of 2-D seismic and 23,500 square kilometers of 3-D seismic has been acquired and 33 exploration and appraisal wells have been drilled, representing an investment of $1.5 billion.

Six deep water fields due on stream through 2005:

  • Shell's Bonga, scheduled to start production in 2003.
  • Texaco's Agbami, also scheduled to start production in 2003.
  • TotalFinaElf's Ukot discovery, planned to go online in 2004.
  • Statoil's Nnwa (set to begin producing in 2005).
  • ExxonMobil's Erha (set to begin producing in 2005).
  • Texaco's Ikija (set to begin producing in 2005).

Together these fields hold reserves of almost four billion barrels of oil equivalent, which includes 2.5 trillion cubic feet of gas. Bonga, Erha, and Agbami hold over two trillion cubic feet of gas combined.

The problem of how to deal with associated gas is a significant issue for these projects. The lack of infrastructure and government pressure to restrict flaring narrows development options for fields producing from these gas-rich reservoirs.

To date, Shell's Bonga Field is the only deep water development offshore Nigeria that includes plans to commercially develop gas reserves. Gas from the field will be piped to a gas-gathering hub near Shell's shallow water EA Field, then routed to the Bonny Island LNG facility.

In addition to operational issues, the period of low oil prices in the late 1990s and the consequent mergers and skills shortages in the industry are impacting future development offshore Nigeria.

For example, ExxonMobil will likely delay full development of Erha until its Kizomba project in Angola's block 15 is complete. There is not enough room in the system to concurrently develop two such projects without a fair degree of synergy between them.

Likewise, Texaco is faced with the choice of developing Agbami, the company's largest find in 40 years, or the Frade Field offshore Brazil to the north of the giant Albacora Field.

Also, the recently announced merger with Chevron could impact development decisions for projects operated by the two companies.

The Congo

North of the Cabinda enclave, in the narrow Haute Mer zone of the Republic of the Congo, TotalFinaElf has discovered a series of what seems to be three smaller fields compared to those in Angola, but their proximity to the border indicates there is a chance that they will extend into Angolan waters.

The three fields are Moho, Bilondo and Libonolo, and they are in water depths ranging from 546 meters to 800 meters. Combined reserves for the fields are estimated at 925 million barrels.

The firm must still determine whether to develop the fields as subsea tiebacks to N'Kossa or from a stand-alone floating production system.

Drilling began in 2000 in the deeper waters off the northern mouth of the Congo River, where four large blocks have been permitted:

  • ExxonMobil operates the Mer Profonde Nord.
  • TotalFinaElf was granted the Mer Profonde Sud and the Mer Trés Profonde Sud.
  • Agip operates the Mer Trés Profonde Nord.

TotalFinaElf has drilled two wells on its acreage -- one that was a discovery (Androméde Marine-1 well on Mer Trés Profonde Sud), and one that was unsuccessful (the Muhanga Marine-1 in the Mer Profonde Sud).

The discovery well was drilled in 1,893 feet of water and tested 7,000 barrels of oil.

However, given the tremendous success the company has enjoyed in West Africa, this new discovery may have to wait in line pending development of other large fields off Nigeria and Angola.

Gabon and Equatorial Guinea

Immediately north of the Congo acreage, in southeast Gabon ultra deep water, TotalFinaElf, Unocal, Kerr-McGee and RB Falcon have bought into Vanco Energy's Anton and Astrid Marin permits. These cover 6,600 and 6,000 kilometers, respectively, in water depths ranging from 1,000 to 3,000 meters.

To date over 40 prospects have been identified, and some believe that the acreage has potential as great as the Angolan blocks to the south. An additional nine deep water blocks were offered in Gabon's ninth licensing late last year 2000.

Another area garnering attention is on the border between Nigeria and Equatorial Guinea, where ExxonMobil's Zafiro Field and its associated satellites show good promise for a developing exploration program.

ExxonMobil has been awarded exclusive rights to explore and technically evaluate 22 blocks in the neighboring deep waters of Sao Tome and Principe.

Triton Energy's La Ceiba Field on block G offshore Equatorial Guinea was a major new discovery in 1999 and the field is being fast-tracked as a four-well subsea early production system tied into the Sendje Berge floating production system, which will be moored in 100 meters of water. First production was expected by late last year.

A much larger 20-well scheme could be in the making in the next couple of years.

About 15 miles southwest of La Ceiba, Vanco has signed an agreement for the Corisco Deep block K covering 1.1 million acres and extending into water depths of 2,500 meters on what is hoped to be an extension of La Ceiba's geologic trend. Vanco planned to acquire 2,000 square kilometers of 3-D seismic in 2000 and its first wildcat is expected within two years.

Also, Chevron has taken over as operator of block L, which is northwest of Triton's acreage and is believed to be on trend with La Ceiba. Chevron's work program includes seismic acquisition and exploration drilling with expenditures of $15 to $20 million.

Ghana and the Ivory Coast

Deep water blocks have been licensed off both Ghana and the Ivory Coast, covering prospects in Cretaceous-Tertiary reservoirs.

In 1999 Ocean Energy and Shell drilled a dry hole at East Grand Lahou offshore the Ivory Coast, and Hunt's WCTP-2X wildcat on Ghana's Cape Three Points acreage found only oil shows.

These two failures have dampened enthusiasm for the deep waters in the western Gulf of Guinea.

However, more recently Dana's West Tano WT-1X was drilled right on the edge of the continental shelf and found oil in two levels of Cretaceous sands. Different geological modeling will be necessary to understand this offshore region.

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