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 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
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
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.
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
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
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
Drilling began in 2000 in the deeper waters off the
northern mouth of the Congo River, where four large blocks have
- ExxonMobil operates the Mer Profonde Nord.
- TotalFinaElf was granted the Mer Profonde Sud and the Mer Trés
- 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
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
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
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.