Equatorial Guinea on Fast Track

Recent exploration successes by U.S. independent oil companies in Equatorial Guinea are fueling a drilling surge that's boosted what used to be one of the world's poorest countries to become one of the world's fastest growing economiesy.

Indeed, the tiny nation, nestled between the prolific Niger Delta and the Congo Basin, is commanding a mighty presence.

It's a fairly recent story, emerging just three years ago when Triton Energy — responsible for three giant field discoveries in the last decade in Colombia and Thailand — discovered the basin-opening Ceiba Field in the Rio Muni Basin. After setting a world record for a deepwater development by bringing the oil field on production in just 14 months, the company has drilled six additional discoveries — and only 15 percent of the company's acreage off Equatorial Guinea has been assessed.

Last year Amerada Hess Corp. acquired Triton, primarily for the upside potential in Equatorial Guinea.

"Amerada Hess had the vision to recognize the significant upside — all of which was in Equatorial Guinea," said Brian Maxted, Amerada Hess' senior vice president of West Africa. "The exploratory drilling results since the acquisition have vindicated this vision — we have announced four new discoveries and there is plenty of room left to search.

"Equatorial Guinea is extremely important to our worldwide portfolio," he continued. "Today it is the largest production base outside the North Sea and the United States — and eventually West Africa will overtake both of those regions and become the primary source of production."

A Strategy Develops

So how did it all start? Why did Triton take a chance on a completely unexplored basin off West Africa?

"Back in 1997 Triton was looking for a third leg to balance its South American and Asian business focus," Maxted said, "and we decided on West Africa because there was significant open acreage in the emerging deepwater play outside of Angola and Nigeria."

The company knew, however, that a small- to mid-size independent couldn't compete with the majors in those hunting grounds. The signature bonuses alone were extremely prohibitive.

"So, we decided to walk along the West African margin and see if we could identify similar play types that were largely unlicensed, where we could gain a significant footprint in a basin," Maxted said.

"The Rio Muni Basin was completely unlicensed at that time," he said, "but we realized the geology of the basin was similar to the Ogooue delta off Gabon, which had about 2.5 billion barrels of proved reserves."

Triton purchased 2-D seismic spec data in the area and saw the opportunity to extrapolate the Upper Cretaceous turbidite play in the Ogooue delta north into Rio Muni.

"On the basis of that work, in April 1997 we speculatively licensed blocks F and G, which covered about 5,000 square kilometers — or 350 Gulf of Mexico sized blocks — for a $1 million bonus per block," he said.