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West Africa's Waters Offer Delicious Temptations

Challenges Don't Deter Industry

Depressed oil prices and serious internal strife - typically a deadly combination for international oil operations -- haven't slowed down companies busy drilling and developing some of the most prospective acreage in the world in deep waters offshore West Africa.

Companies there are jockeying for position in the world's hottest play - and with some new discoveries yielding reserves of a billion barrels of oil it's easy to see why international companies are excited.

The first West African deep-water field was discovered by Elf Aquitaine SA in 1995 in the Congo Basin. The Moho Field, with recoverable reserves of about 400 million barrels, proved the enormous potential of the deep-water region.

The first discovery in Angola's deep water was Elf's Girassol Field in block 17, with reserves thought to be about one billion barrels. Block 17 has yielded three additional field discoveries, one of which may be larger than Girassol.

Exxon has enjoyed similar success on Block 15 in Angola's deep-water province, finding eight new fields. Potential recoverable reserves for the first three combined fields are estimated at about one billion barrels.

In 1997 and 1998 Chevron Overseas Petroleum discovered four fields in its Block 14 in deep water offshore Angola. The first discovery was Kuito, which the firm plans to have on production by the second half of this year, with initial production of 75,000 barrels of oil a day and peak production of 100,000 barrels by 2002, according to Chevron.

The field will be produced through sub-sea wellheads and a floating production and storage vessel, which has allowed Chevron to bring the field on line just two and a half years after discovery.

In addition to Kuito, Chevron has found three commercial fields on Block 14, including Belize, which was discovered in late 1998 in 1,000 feet of water. The discovery well flowed over 10,000 barrels of oil a day.

Chevron also uncovered the Benguela Field in mid-1998, in 1,300 feet of water. Three zones were tested in the initial well with a combined flow rate of over 20,000 barrels of oil daily. The company's fourth field discovery is Landana.

Significant Finds

International companies also are logging deep-water discoveries in the Niger Delta offshore Nigeria. Elf Aquitaine's Ukot 1 wildcat was a discovery earlier this year, flowing 13,900 barrels of oil a day on tests from two of three oil-bearing intervals.

The discovery is one of the most significant deep-water finds to date in Nigeria.

Shell has logged a huge discovery in the deep-water Niger Delta at the Bonga Field, which has proven, probable and possible reserves of 1.2 billion barrels of oil, according to the IHS Energy Group International Oil Letter.

This rapid-fire discovery of enormous fields is fueling excitement all along the West African coast from both international oil companies and the governments of countries hoping to duplicate the success offshore Angola and the Congo.

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Depressed oil prices and serious internal strife - typically a deadly combination for international oil operations -- haven't slowed down companies busy drilling and developing some of the most prospective acreage in the world in deep waters offshore West Africa.

Companies there are jockeying for position in the world's hottest play - and with some new discoveries yielding reserves of a billion barrels of oil it's easy to see why international companies are excited.

The first West African deep-water field was discovered by Elf Aquitaine SA in 1995 in the Congo Basin. The Moho Field, with recoverable reserves of about 400 million barrels, proved the enormous potential of the deep-water region.

The first discovery in Angola's deep water was Elf's Girassol Field in block 17, with reserves thought to be about one billion barrels. Block 17 has yielded three additional field discoveries, one of which may be larger than Girassol.

Exxon has enjoyed similar success on Block 15 in Angola's deep-water province, finding eight new fields. Potential recoverable reserves for the first three combined fields are estimated at about one billion barrels.

In 1997 and 1998 Chevron Overseas Petroleum discovered four fields in its Block 14 in deep water offshore Angola. The first discovery was Kuito, which the firm plans to have on production by the second half of this year, with initial production of 75,000 barrels of oil a day and peak production of 100,000 barrels by 2002, according to Chevron.

The field will be produced through sub-sea wellheads and a floating production and storage vessel, which has allowed Chevron to bring the field on line just two and a half years after discovery.

In addition to Kuito, Chevron has found three commercial fields on Block 14, including Belize, which was discovered in late 1998 in 1,000 feet of water. The discovery well flowed over 10,000 barrels of oil a day.

Chevron also uncovered the Benguela Field in mid-1998, in 1,300 feet of water. Three zones were tested in the initial well with a combined flow rate of over 20,000 barrels of oil daily. The company's fourth field discovery is Landana.

Significant Finds

International companies also are logging deep-water discoveries in the Niger Delta offshore Nigeria. Elf Aquitaine's Ukot 1 wildcat was a discovery earlier this year, flowing 13,900 barrels of oil a day on tests from two of three oil-bearing intervals.

The discovery is one of the most significant deep-water finds to date in Nigeria.

Shell has logged a huge discovery in the deep-water Niger Delta at the Bonga Field, which has proven, probable and possible reserves of 1.2 billion barrels of oil, according to the IHS Energy Group International Oil Letter.

This rapid-fire discovery of enormous fields is fueling excitement all along the West African coast from both international oil companies and the governments of countries hoping to duplicate the success offshore Angola and the Congo.

Gabon, for example, is hoping to see some results in its deep-water acreage in the near future. In 1997 Houston-based Vanco Energy Co. and partner Reading & Bates signed production sharing contracts with Gabon for the 1.6-million acre Anton Marin permit, which is adjacent to the Congo border, and the 1.7-million acre Astrid Marin permit.

Vanco said the Anton Marin permit is a northern extension of and on trend with the deep-water play in the Congo.

Vanco is currently shooting 4,500 kilometers of 3-D seismic on its acreage, said Gene Van Dyke, president of the firm.

"After reviewing the seismic data we will likely drill two wells in the fourth quarter of 2000," Van Dyke said.

The company has 18-22 prospects on Anton Marin and 15-20 prospects on Astrid Marin.

"Preliminary looks at the 3-D seismic indicate that we have bright spots, AVO, gas chimneys -- everything companies have found down in Angola," Van Dyke said.

The Anton Marin permit is within the northwestern continuance of the Middle Cretaceous 'raft structure' trend from Angola, Cabinda and the Congo. Large slump blocks detached from their original depositional position are sealed by Upper Cretaceous and Tertiary marine shales, charged from pre-salt Melania lacustrine source shales.

Major reserve potential also exists in Tertiary sand channels in the southeast part of the permit.

The Astrid Marin play consists of Tertiary sandstones of the ancestral Congo River fans draped over salt structures. The geologic setting is similar to that found in Chevron's Kuito and Landana fields and Elf's Girassol and Dalia discoveries in Angola.

In late 1998 Vanco formed the Vanco Gabon Group, a consortium of Total, Unocal, Vanco, Kerr-McGee and Reading & Bates, to oversee operations on the two permits. Total is the operator of the group, but an integrated project team from all the companies will provide exploration and production expertise for the project, Van Dyke said.

"I am a geologist and our organization has always been exploration oriented," he said. "In 1996 we began looking for potential areas to expand our operations and West Africa was obviously of tremendous interest, particularly with the development of floating production systems that make ultra-deep water production possible. We undertook a detailed study of West Africa and what we learned made us more determined to stake a claim in this vast play.

"We've begun in Gabon, but we certainly have plans to expand our operations in West Africa," he continued. "Currently we are negotiating with five additional countries."

Gabon is pushing to expand operations in its offshore region. Local press reports in May indicated that authorities are planning to launch a ninth licensing round in March 2000 that will cover open acreage onshore, on the continental shelf and in deep and ultra-deep waters.

Other Targets

Cote d'Ivoire is hoping international companies will find success in its deep-water offshore acreage where several firms have already staked claims.

Shell International BV and Ocean Energy joined state company Petroci on the CI-105 offshore license area. Mohamed Lamine Fadika, Cote d'Ivoire's energy minister, told a conference earlier this year that Shell and Ocean Energy plan to drill the country's first deep-water well this year.

Also, Vanco signed a production-sharing contract with Petroci last April for blocks CI-109 and CI-112, covering 2.3 million acres in water depths ranging from 1,000 to 2,500 meters, Van Dyke said.

Terms of the agreement call for 2-D and 3-D seismic surveys and at least three wells on each block within nine years. Western Geophysical began shooting 2-D seismic over block CI-112 in June. The survey covers 2,000 kilometers and creates a complete grid of the block. Existing data covers the northern third of CI-112.

Vanco acquired 2,000 kilometers of spec seismic data from Western that covers the entire CI-109 block and both blocks are being jointly evaluated. Vanco will launch a 3-D seismic survey this November, he said.

Togo, with assistance from technical advisor PGS Exploration, launched a formal licensing round at the AAPG annual meeting last April. The 15-block offering will cover 4,100 square kilometers on the shelf and extending out to the 2,800-meter isobath.

A new data package has been prepared for the Togo offering that will include 3,100 square kilometers of non-exclusive 3-D seismic acquired by PGS last year. About 700 square kilometers of the survey covers the shallow shelf and the remaining 2,400 square kilometers covers acreage beyond the 200-meter isobath.

The primary targets of the 3-D survey were Tertiary and Upper Cretaceous submarine fans and channels, in addition to large structural closures at all Cretaceous levels. According to PGS, the Togolese slope has an abundance of rotated fault blocks similar to the Espoir Field off Cote díIvoire.

Equatorial Guinea extended the deadline for receiving bids in its first deepwater licensing round from May to August at the request of industry. The extension allows companies more time for data evaluation.

The offering, which opened last October, covers 60 tracts extending over a 38,000 square kilometer area south and west of Bioko Island and west of Rio Muni. Fifty-three of the blocks are in waters deeper than 200 meters.

While Angola was one of the first West African countries to log important offshore discoveries, the country continues to take steps to expand its offshore petroleum industry. Earlier this year an Agip-led consortium that includes Esso and the state company Sonangol signed a final production sharing agreement for deep-water Kwanza Basin block 25, according to the International Oil Letter.

Commitments for the 4,852 square kilometer tract include 3-D seismic and a minimum of four wells during the first exploration period.

Jose Mangueira, Angolan national petroleum director, also announced in early March that partnership stakes in the highly prospective ultra-deep water blocks 31, 32 and 33 were imminent. All three blocks are located primarily in the Lower Congo Basin and Congo Fan region, west of blocks 14-19, where significant deep water discoveries have already been made.

'Tremendous' Opportunities

Offshore West Africa is not without its problems, however.

International oil companies do have to contend with political uncertainties as well as internal strife in some countries. This year a full-scale civil war resumed in Angola when United Nations peacekeeping forces opted to withdraw from the country.

Also, ethnic fighting in Nigeria is a constant concern for companies operating in the Niger Delta.

Nigeria experienced a change of governments in May that could impact oil operations. Eleven awards in ultra-deep waters made by the previous government to indigenous companies were in question with the transition. Multinational oil companies have been negotiating possible partnership agreements with the Nigerian companies, but the Nigerian media is reporting that the incoming Obasanjo government will definitely review the various deep water awards to indigenous companies, according to the International Oil Letter.

Offshore operations give oil companies a degree of security from internal problems in some African countries -- and the advent of floating production systems is another advantage, according to several industry officials. Deep water fields are primarily being developed through sub-sea completions and FPSO, which minimizes the infrastructure coming onshore where it is most vulnerable.

Despite these problems, international companies continue to flock to offshore West Africa and the reason is simple. Geology.

"Offshore West Africa is the mirror image of Brazil's offshore, and the most prolific fields in Brazil have been in deep waters," said Bill St. John, a consultant with Vanco Energy. "The region has extremely rich source rocks in salt basins characterized by faulting. That scenario adds up to large structures with good migration paths."

Companies are looking for Jurassic carbonates, Cretaceous reservoirs, Tertiary sands and deep water channels and fans.

"If you can find these Tertiary deepwater fans out where you've got older salt underneath that provides structure, then you've got beautiful prospects," St. John said.

South of Angola, the geology changes dramatically.

"When the continents were spreading there was a large volcanic ridge that extended all the way across the south Atlantic," St. John continued. "This closed off the oceanic waters that were circulating to the north and restricted them and they evaporated, developing these tremendous salt basins north of the ridge.

"South of the ridge, however, this closed circulation did not exist and the salt didn't develop," he said. "As a result, the region south of the Wald's ridge is not as prospective.

"But from Angola north to at least the Ivory Coast there is still a great deal of room to explore -- and the opportunities for giant discoveries are tremendous."

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