Huge reserves and production rates draw high interest.

The size of the opportunities offshore West Africa outweigh the size of potential problems for many of the operators working in this oil- and gas-rich province.

The draw is significant, according to Jane Whaley, senior principal technical advisor for IHS Energy.
Discoveries range from Woodside Petroleum's 100-million-bbl-plus Chinguetti discovery offshore Mauritania to ExxonMobil's Semba-1 discovery that tested at 3,039 b/d of oil in Angola's Kwanza Basin.
To date, those countries command reserves of 80.5 billion bbl of oil and resources of 222.7 Tcf of gas that will become reserves when the countries figure a way to get them to users. The success rate for new-field wildcats is 35% for the region.

Some 65% of that oil and 84% of the gas belongs to Nigeria. That accounts for the expensive operations and major companies working there. For example, Shell recently paid a US $210 million signing bonus for deepwater block OPL 245.

Opportunity may knock loudly at Nigeria's door, but that's not the only door in the area. Most of the 19 countries on Africa's western coast want to get in on the action, Whaley said.

For example:

• Mauritania may offer deepwater blocks based on the success of the Chinguetti discovery;
• Senegal has six blocks up for licensing with lenient terms;
• Guinea Bissau has extended its current offering round;
• Guinea has WesternGeco running its first offshore round with nine deep and ultradeep blocks in the showroom;
• Sierra Leone has seven available blocks with bids set to close in April;
• Liberia, armed with a TGS Nopec seismic survey, will open bidding soon;
• Ghana wants a licensing round late this year or next year;
• Nigeria has 22 deep and ultradeep blocks coming up for licensing next year;
• The Joint Development Zone, with 10 blocks between Sao Tome and Principe and Nigeria; will open next year with a probable 4 billion bbl of reserves;
• Sao Tome probably will offer exclusive blocks after the Joint Development Zone offering;
• Equatorial Guinea may have a round opening next year;
• Gabon's ninth licensing round closed this past year, and that country is moving to open negotiations with prospective licensees; and
• Angola has a Kwanza Basin licensing round coming up and will accept negotiations on specific tracts anytime.

Among pluses for working offshore West Africa, Whaley said, the United States decided after the Sept. 11 disaster that it wants 20% of its oil from the region, and Nigeria could break from Opec allowing it to raise production to 4 million b/d from the current 1.9 million b/d.

Among minuses, in the latest licensing round, Nigeria raised its take to 30% from 20%.
Working through the pluses and minuses, the rewards offshore Nigeria have been spectacular, said Phil Magor, senior petroleum geologist with IHS Energy.

Bonga will come onstream in 2004 with 1 billion bbl of oil in reserves, he said. That will be followed by Southwest Bonga (500 million bbl), Agbami (1 billion bbl), Erha (250 million bbl) and Akpo (1 billion bbl).
Adding to rewards from those fields, Nigeria is a gas-prone province, he said. Nigeria can produce up to 2.5 million b/d of oil with a gas-oil ratio of 1,500. That means it also can produce 3.75 Bcf/d of gas. The nation uses 500 MMcf/d of gas, and that leaves 3.25 Bcf/d of gas that is either being reinjected or flared.
A proposed $2 billion to $5 billion pipeline will take gas from Nigeria to Algeria for relay to Europe, and a $400 million West Africa pipeline also is in the works.

Steve Wherry, exploration manager for Sub-Saharan Africa with Marathon Oil Co. outlined his company's strategy for the area.

Marathon started work off West Africa in Gabon in 1995 with the Tchatamba discovery off Gabon and followed up with Tchatamba South and Tchatamba West. In all, it has had four discoveries in seven attempts.

After TotalFinaElf's Girassol discovery and others offshore Angola, it decided to get into that play, joining BP and Conoco with a 10% interest in blocks 31 and 32. Those blocks are seaward of the prolific blocks 15 and 17. Those two blocks have yielded a total of 7 billion bbl of oil to date with seven discoveries on block 15 and 12 discoveries on block 17.

Recently, BP reported its Plutao discovery on block 31.

The Angola and Nigeria tracts have great potential, Wherry said, but a successful discovery offshore Nigeria wouldn't produce oil or returns for the company until 2007 at the earliest. The company wanted immediate production and income to provide balance for the potential.

That need led to the purchase of giant Alba field offshore Equatorial Guinea. That field has 5 Tcf in gas reserves and 325 million bbl of condensate reserves and access to an onshore liquefied natural gas plant.

Comments