West Africa offers solid gains to the operators that can work with the complexity of its geology and work within the changing guidelines of host countries as the huge offshore play continues to grow.

As much as 300 billion bbl of oil have been discovered throughout Africa and another 150 billion bbl of oil will eventually be found. While North Africa is a strong gas producer, oil dominates sub-Saharan production.

Total’s Girassol loomed large in the pioneering days of the Congo Basin and still is a major factor in West African production.
Operators have worked the Niger Delta since the 1950s when they started onshore. Exploration moved offshore to the shelf in the 1950s and to deep water in the 1990s, starting in the Greater Congo Basin with Total’s Girassol in the mid-1990s.

Operational requirements vary from country to country throughout the region, according to demands on government from local populations and according to the services that are available in each country.

Those differences can vary widely and, as in-country capability grows, so will demands for a larger share of local input from companies working within the borders of those countries.
Henri Houllevigue, manager of geophysical operations and technology for Total, offered his company’s look at operating conditions in West Africa as he spoke to a Society of Exploration Geophysicists group at the organization’s annual conference in New Orleans, La.

In Nigeria, Directive 14 in 2005 called for the domestication of seismic processing. Previously, larger surveys could be processed outside the country, but local content mandates are growing and changing. For example, a company can get a waiver on vessel hulls for acquisition, but Nigeria wants local crews and staffs. It also wants operators to use local supply and work boats.

The country would like prestack depth migration work for seismic projects between 772 and 1,158 sq miles (2,000 and 3,000 sq km) for conventional 3-D shoots to move in-country, he said.

Angola is different. Local content for seismic processing is required, but it’s handled on a case-by-case basis. Currently, in-country operations can handle up to 1,930 sq miles (5,000 sq km) of conventional, or 270 sq miles (700 sq km) of high-resolution work, he said.
Call-for-tenders for work also vary among countries. A call-for-tender in Nigeria can take 9 to 12 months and cost US $250,000 for a production-sharing contract or $500,000 for a joint venture.

A company starts with a press release in local media, goes through prequalification, then technical qualification and commercial qualification. State agencies are trying to streamline the process.

A call-for-tender in Angloa can move through the system to approval in as little as 3 months, but Sonangol must approve every detail.

Both countries are monitoring brown fields to try to maximize production, and they’re trying to find and appraise deeper projects.

Operators working onshore face issues with community activists and requirements for local personnel on jobs.

Offshore working areas often are congested with naval traffic and obstructions, Houllevigue said. If that isn’t enough, the deepwater offshore area is expensive to work, and the subsalt poses significant imaging issues.

In the area of brownfield monitoring, Total is conducting a 4-D survey on OML-X offshore Nigeria. It’s trying to detect and appraise a gas cap for secondary recovery in very congested waters.

The local content issues are shared by international oil companies and service companies, and all companies face a shortage of geoscientists.

Total’s Girassol floating production, storage and offloading vessel was a pioneer in West African operations. (Photos courtesy of Total)
Overall, governments are exerting more pressure on operators working in their borders. For example, Total is working with the Nigeria oil and gas agency to see what operations it can transfer to Nigeria and what work it must keep in existing Total laboratories abroad.
“You have to play by the rules, show the government you have a plan to include local content and how that plan will evolve,” Houllevigue said.

“We’re excited about the potential of Africa, but we’re aware of the challenges,” said Philip R. Loader, vice president of worldwide exploration with Anadarko Petroleum Corp.
It seems more plays are developing all the time. There have been some important discoveries offshore Mauritania, and in eastern Africa, Uganda and Mozambique are burgeoning plays.

Africa’s potential lies in its underexplored and overlooked basins, Loader said. Promise lies in deep and ultradeep water. The future will reveal markets where no markets exist now, particularly for natural gas.

Operators have been looking for structures, but potential remains in stratigraphic plays. Unconventional plays are virtually untouched in Africa, but they have similar potential to unconventional plays in the United States.

As far as challenges, he said, technology must be developed in fit-for-purpose applications. In 1973, it was difficult to pick out features with 2-D seismic. Anadarko cleared up the picture with the first vibroseis in Algeria and, in 1999, used 3-D seismic to locate a 2 billion bbl field. The technological challenges are compounded in deep water off West Africa, particularly with well completions, he said.

The promise is high, but the competition is high, too, particularly with Chinese, Korean and Indian companies buying in as participants in promising areas, Loader added. National oil companies have three to four times the lease acreage they had only 5 years ago. In addition, money is available in the market to finance competition. The major oil companies have established themselves in the big plays in Nigeria, Angola and Egypt, and that leaves even large independents such as Anadarko as niche players in the areas.

When working in Africa, commercial risk will work out as each operator decides its own risk appetite. Investment dollars are available for innovative ideas, he added. That investment amounted to more than $6 billion in the past 5 years.

Commercial realities also will challenge the operator in Africa. “Drilling prices are going up faster than oil prices,” he said. Deepwater rig rates have climbed 250% since 2004. “I heard of a rig at $600,000 a day. It must be a really good prospect,” he added.
Operators are concerned that there should be different terms for plays with differing risks or returns.

Unconventional reserves exist in West Africa, but the cost is high and operators need incentives to encourage development. Without that encouragement, those reserves will remain below ground.

Finally, the industry still will need the intellectual capital to fill the jobs that produce the hydrocarbons. Intellectual capital is hugely important in avoiding re-learning lessons, he added.

To find resources of the future, he said, the industry will have to have access to land, and it will need political change to lower country risk.

Operators will have to drill deeper into more difficult geological environments, and they will have to take the pioneering steps into the unexplored and underexplored basins.
The solutions, Loader said, lie in subsurface creativity, starting with a regional perspective and a front-loaded exploration and appraisal program to fully understand the challenges and opportunities.

Successful operators will use prudent risk management, minimizing uncertainties and sharing risks. Today’s technical margins lie in ultradeep water off West Africa, in deeper conventional stratigraphic plays and in missed pays and plays, Loader added.

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