Equatorial Guinea returns to top of agenda
Four years after the discovery of Zafiro, its first oil field, Equatorial Guinea has returned to prominence as a major oil province along the West African deepwater fairway. A discovery by Triton last October, M'Bini-1, profoundly changed the hydrocarbon map of the country, considering that it is located far away from the influence of the Niger Delta Basin, where all the hydrocarbons in the country have been found thus far.
More importantly, the field has been found to be large enough to warrant a fast-track development, just like Zafiro did in 1995. Operator Triton changed the name to Ceiba and has unveiled plans for the field development. This discovery has warranted enough interest that other companies have begun taking another look at the open deepwater acreage, which was snubbed during the bidding round last year.
Triton and its partner, the South African company Energy Africa, will devote a large part of the substantially-increased budget for 2000 to the offshore field, located in Block G in Rio Muni. A sum of $350 million has been assigned to Phase 1 development of the field, which is expected to produce about 100,000 b/d of oil as of startup in 18 months, when an FPSO should have been commissioned. Triton/Energy Africa will also drill five to six development wells and test nearby prospects in Blocks F & G.
Ocean Energy slows down in Cote d'Ivoire
Ocean Energy has either lost some of its enthusiasm about the prospectivity of Cote d'Ivoire's deepwater play or wants to lower risk significantly. The American independent is offering more than half of its 35% equity share in deepwater Block CI-105 for any interested farm-in. Partner Shell, with 55% equity, is offering about one third on the block. Together, up to 50% is available from the two companies.
Ocean Energy and Shell's disappointing Block CI-105.
Just a year ago, Ocean Energy was bullish on the prospects in deepwater Cote d'Ivoire. After identifying 26 structures, estimated to hold 3.6 billion bbl in the entire deepwater Cote d'Ivoire, the company defined three of the best prospects - Etente, Grand Lahou, and East Grand Lahou, all in CI-105, which was proclaimed as the flagship block in the Ivorien deepwater. But the first well, Grand Lahou-1, drilled last July in 1,000 meters water depth, to a total depth of 3,592 meters turned out to be a depressingly dry hole. OEI and Shell are quiet about plans for any other wells in the block any time soon and instead are actively marketing the lease to putative partners.
Gulf of Guinea summit for 1Q 2000
Six African countries, located inshore of one of the world's most prolific deepwater fairways, will meet in Sao Tome and Principe for the first Gulf of Guinea Joint Commission (GGJC) summit in the first quarter of next year. The President of Sao Tome and Principe, Miguel Travoada, was in Nigeria last week, in part, to finalize preparations for the summit. The GGJC was launched last month at a meeting in Gabon's capital Libreville, by presidents of the Republic of the Congo, Equatorial Guinea, Gabon, Cameroon, Angola, Sao Tome and Principe, and Nigeria to strengthen dialog on regional conflicts and security cooperation.
The Gulf of Guinea Demarcation of economic zones and cooperation in the oil sector are also on the agenda of the regional organization. The sub-region has proven oil reserves of more than 33 billion bbl of oil and almost 140,000 bcf of gas. A series of deepwater discoveries off the coast of northern Angola in the last three years has sharpened the appetite of the oil majors and independents for acreage in the Gulf. Oil production has doubled from 1.8 million b/d of oil in 1983 to 3.7 million b/d in 1998. The region is estimated to possess around 14% of the world's offshore oil reserves.
OPL 91 again calls for partners
The OPL 91, located in southeastern Niger Delta, offshore Nigeria, has shown up again in the bidding marketplace as an open lease for a farm-in partner. The state oil company Nigerian National Petroleum Corporation (NNPC) tendered early in December for a partner to develop new fields in the block, which is in about 100 meters water depth. The tender placed a deadline of December 31, 1999, for applications from interested companies to the NNPC Group Managing Director's office in Abuja, Nigeria's federal capital. The Nigerian Petroleum Development Company, the NNPC subsidiary working the lease, said it was looking for a medium-sized operating company with more than 15 years offshore experience and the ability for substantial investment in a joint venture.
OPL 91 has been off and on the block for some time. In the mid-90s to 1997, several major and independent companies have approached the NPDC claiming interest in the block including Mobil and Marathon. Part of its appeal is that it exists in the prolific southeastern part of the Niger Delta, where Mobil produces one third of Nigeria's daily crude output, from an area that is one-tenth of the entire basin. Another reason is the presence of the Okpoho Field discovered in the late 70s on the lease. The OPL has also subsequently been covered by 3D seismic data. Past estimates of OPL 91's potential have been about 20,000 b/d of oil.
NNPC said the arrangement to develop OPL 91 would start in the second quarter of 2000 and would guarantee recovery of investment for the partner from oil production as well as a share of future profit oil. Only short-listed firms were to be contacted to proceed to bidding and pre-qualified prospective companies would be asked to pay $150,000 as a non-refundable deposit for complete data on the fields.
Gabon looks forward to 9th licensing round
Gabon continues to award acreage, despite the lackluster 8th licensing round involving entirely ultra-deepwater leases, which closed last summer. A month after a five-member Australian consortium was granted two offshore permits, the government of Gabon announced it will go ahead to open the ninth licensing round in June 2000.
The two permits, granted for a nine-year term, are named Iris and Themis and are each located on either side of Phillips's Olowi Block; they both cover some 1,500 sq km south of Gamba. The five member consortium includes Fusion (operator) 38.57%, Hardman 12.86%, Horizon Energy 12.86%, Millennium Oil 10%, and Sunburnt Downs Pastoral 25.71%. Commitments include drilling of at least three wells during these nine years, whilst in the initial three years re-mapping of the subsalt structure is proposed, to be followed by 2D or 3D seismic.
Meanwhile, there are nine deepwater leases out of the 26 blocks on offer in the ninth bidding round. The rest are five shallow water and 12 onshore leases. Low oil prices as well as operator's unease with the hydrocarbon geology of the deepwater Gabon led to failure of the 8th licensing round, which delivered only three out of 12 ultra-deepwater blocks on offer. Gabon itself had slipped on the list of oil producing countries. Oil production has averaged 302,000 b/d of oil for most of 1999, an 11% decrease from the 365,000 b/d average achieved in 1998.
