Tuesday, May 31, 2011

Cote D’Ivoire: Oil and Gas discoveries and status of exploration activity in 2011 – 2012

The Cote D'Ivoire is a country in West Africa, economically dependent on agriculture and related activities, which engage roughly 68% of the population. Cote d'Ivoire is the world's largest producer and exporter of cocoa beans and a significant producer and exporter of coffee and palm oil. Events in recent years have included severe unrest caused by political developments. On 28 November 2010, Alassane Dramane Ouattara won the presidential election, defeating then President Laurent Gbagbo, who refused to hand over power, resulting in a 6-month stand-off. In April 2011, after widespread fighting, Gbagbo was formally forced from office by Ouattara supporters with the support of UN and French forces. Several sanctions were put on the country by the UN, AU (African Union) and the EU among others, to assist in removing Gbagbo from power. Several thousand UN troops and several hundred French remain in Cote d'Ivoire to support the transition process. Ouattara was sworn in as president in May 2011, and sanctions imposed on the country have slowly been lifted.

This post lists the discoveries in the Cote D'Ivoire and exploration plans of companies looking to strike it big in this year and the next. For a list of West African oil discoveries in 2010 - 2011 click here. For information on Angola (South West Africa), click here. For a list of recent discoveries and exploration plans in neighbouring Ghana, click here, and for a list of all discoveries in Ghana click here. All information has been sourced from Derrick Petroleum's extensive exploration and deals databases.

Location of Cote D'Ivoire shown by red polygon.

Oil and Gas Discoveries, Locations and Partners

o   Baobab:  150 – 200 mmboe (Block CI-40). The Baobab field, located offshore West Africa on Block CI-40 and approximately 16 miles (25 kilometers) offshore Cote d'Ivoire, has estimated reserves of 700 million and recoverable reserves of 200 million barrels of oil. The discovery Baobab 1X well was drilled in March 2001 and is estimated to produce roughly 6,700 barrels per day. It was drilled to a total depth of 3,074 m in a water depth of 1,484 m. In 2002, the Baobab 2X well was drilled to a total depth of 2,880 m in a water depth of 1,540 m.
§  Capacity – 52,000 bpd
o   CNR – 57.6% (operator)
o   Svenska – 27.4%
o   Petroci – 15%

o   Espoir: 120 mmboe (Block CI-26). Espoir lies in Ivory Coast Block CI-26, approximately 19km offshore south of Jacqueville, and around 60km southwest of Abidjan. It was discovered in 1982. The water depths range from 100m to 600m. The Espoir field has estimated recoverable reserves of 93 million barrels of oil and 180 billion cubic feet of natural gas.
§  Capacity – 28,000 bpd
o   CNR – 58.67% (operator)
o   Tullow – 21.30%
o   Petroci – 20%

o    Acajou: 25 mmboe (Block CI-26). The well on licence CI-26 was drilled on the Acajou South prospect approximately 24 km off the coast of Côte d'Ivoire in a water depth of 3,050ft. The well is located some 9km from the Espoir facilities. Well Acajou-1x was operated by Canadian Natural Resources ("CNR") using the Sovereign Explorer rig. It reached a total depth of 2,447 m and encountered a gross oil column of over 76.2 m. A 13.72 m interval of sands at the top of the oil column was tested at an average rate of 3,500 bopd oil. The oil was of good quality 33° API, similar to that found in the Espoir field. 
·         CNR – 58.67% (operator)
·         Tullow – 21.30%
·         Petroci – 20%

o    Lion: 45 mmboe (Block CI-11). Block CI-11 is located about 13 km offshore and 89 km from Abidjan in water depths ranging from 45 metres to 280 metres.  The producing Lion and Panthère fields were discovered by Phillips in the 1980’s.
§  Capacity – 1230 bpd
o   Afren 47.96% (operator)
o   Petroci – 20.14%
o   IFC – 18.94%
o   SK Energy – 12.96%

o    Panthere: 420 BCF (Block CI-11). Block CI-11 is located about 13 km offshore and 89 km from Abidjan in water depths ranging from 45 m to 280 m.  The producing Lion and Panthère fields were discovered by Phillips in the 1980’s

o   Foxtrot: 940 bcf (Block CI-27). Côte d'Ivoire’s largest producing natural gas field is the Foxtrot field in offshore Block CI-27.
·         Foxtrot International 24% (operator)
·         Petroci 40%
·         SECI 24%
·          Gaz de France 12%

o   Belier: 20 mmboe (Block CI-24). Exxon discovered the Belier Field in 1974. The Bélier field, developed by Exxon, did not begin producing oil until 1980 because of technical difficulties. Output reached 10,000 bpd in 1981 and then fell to 6,000 bpd by 1986 in spite of a US$50 million investment by Exxon on a water injection program to maintain output and prolong the field's life. It is not producing now.

o   Kudu: 207 bcf, Eland: 95 bcf , Ibex: 77 bcf (Block CI-01). These 3 discoveries lie in Block CI-01. Block CI-01 was awarded to United Meridian Corporation in 1994, and is located offshore in the easternmost part of Côte d’Ivoire, adjacent to the international border with Ghana.  It extends from near the shoreline to 1,900 m water depth and is located 52 km from Abidjan. 16 wells have been drilled on the block to date, throughout the late 1970’s and mid 1980’s by Esso and Agip, 10 of which have encountered oil and gas.
§ Afren – 65% (operator)
§ Petroci – 20%
§ SK Energy Co Ltd – 15%

Cote D’Ivoire Oil and Gas discoveries. Source: Rialto

        Fiscal Terms and Political Environment
o    Production Sharing Contract operating continually since the 1970’s 
o    Full lifecycle cost recovery of expenses includes CapEx and OpEx, unrecovered costs carried forward for future recovery
o   Production bonuses payable on milestones

Companies Drilling in 2011 – 2012

The information presented here is from the Derrick Petroleum Planned Exploration Wells Database which is the only database in the industry that tracks actual exploration drilling plans and not just license drilling commitments. The database will be useful to E&P companies for identifying farm-in opportunities and to oilfield services companies for identifying sales opportunities. It is also extremely useful as a research tool to keep track of exploratory drilling by region or company. 

Companies with plans to drill in Cote ‘d’ivoire. Source: Derrick Petroleum Planned Exploration Wells Database. [FM] = Force Majeure announced.

CI – 205
Block CI-205 is located in the Gulf of Guinea, offshore Cote d'Ivoire in the Tano Basin with proven oil and gas potential. It lies 15 km from the Baobab oil field, the largest in Cote d'Ivoire. The block covers an area of about 2,600 sq km. 4,900 km of 2D seismic and 2,400 sq km of 3D seismic surveys have been completed. The block is in its second phase of exploration which requires the consortium to drill one exploration well. The consortium planed to drill a well in 2010 using the Transocean drillship Deepwater Pathfinder. However on the 4th of April 2011, the operator, Lukoil Oil Company announced Force Majeure on operations on the block. It is likely that the well will be drilled in 2012 after normal operations resume. The partners are:
            * LUKOIL Group: 63% (operator)
            * PETROCI Holding: 10%
            * Oranto Petroleum: 27%

Map of Blocks and oil and gas fields. Source: Afren

CI – 105
This is an offshore concession off the Ivory Coast. The South Grand Lahou-1 wildcat was drilled to a total depth of 4,556 meters. However it failed to encounter any hydrocarbons. 2 more exploration wells are planned to be drilled in 2H 2011, with one being on the Lower Bandama Channel prospect in 2011. The upside resource potential of the prospect is estimated to be about 300 mmboe. However operations are suspended following announcement of Force Majeure over the block from Feb 2011. Partners in the block are:
Tullow Oil – 22.37%
                * Anadarko – 50% (operator)
                * Petroci Holdings – 15% (5% + 10% carried interest)
                * Al Thani Corporation Ltd – 12.63%         

In Block CI-103, acquisition of 600 sq km of new 3D completed at end 2007. 3D seismic has delineated several leads and prospects. The geophysical techniques which proved so successful in Ghana are currently being used to further evaluate the data. An exploration well is planned to be drilled on the Fan 4 West prospect in H2 2011. The upside resource potential of the prospect is estimated to be about 230 mmboe. However operations are suspended following announcement of Force Majeure over the block from Feb 2011. Partners in the block are:
Tullow Oil – 45% (operator)
                * Anadarko – 40%
                * Petroci Holdings – 15%

CI-401 & CI-101
Blocks CI-101 & CI-401 are located on the continental shelf of the Republic of Cote d'Ivoire, in the deep-water zone of the Gulf of Guinea. A total of 1,100 sq km of 3D seismic study has been completed on the blocks in 2007. In April 2010, the consortium drilled its first exploration well Orca-1x-bis on Block CI-401. Block CI-401 occupies an area of about 929 sq km. The well penetrated the targeted objectives and discovered thin sandstone reservoirs. The well is temporarily plugged and abandoned. A second exploration well on CI-401 is planned to be drilled in Q1 2012. The location for the next exploration well on Block CI-101 has been defined, with the well is planned to be drilled in 2011. Force Majeure over these blocks was declared on April 4th 2011. Partners in the block are:
                        * LUKOIL Group: 56.66% (operator)
                        * Petroci Holdings – 15%
                        * Vanco Energy – 28.34%

CI – 202
CI-202 covers an area of 675 km² and is located just 30km to the southeast of Abidjan, the primary commercial centre of Cote d’Ivoire, extending from the coastline to water depths of almost 1000m. The block is a highly prospective petroleum exploration licence that contains multiple pre-existing un-appraised oil and gas discoveries.  The block contains a significant database of 13 wells, two 3D seismic surveys and over 20 production tests which have produced gas up to 37mmscf/day and oil over 2200 bopd.  These discovery and appraisal wells are located in shallow water depths of 25m to 85m and represent a high value and low unit technical cost production opportunity. The consortium is planning to drill three to six exploration and appraisal wells on the block in 2011. Partners in the block are:
            * Rialto Energy – 85% (operator)
            * Petroci (15%)
            * ACC Holdings (21.25%)

CI-100 block is located about 100 kilometres south-east of Abidjan in water depths ranging from 1,500 to 3,100 metres and covers an area of about 2,000 sq km. An initial 3D seismic survey has already been carried out by Yam’s Petroleum. Exploration work will include a new 1,000 square-kilometre 3D seismic survey, which will complete coverage of the block, and a first drilling, in 2012 at the latest. CI-100 is located directly west of acreage held by Dana in Ghana where the company made an oil discovery in March 2000. Partners in the block are:
                 * Total – 60% (operator)
                 * Petroci - 15%
                 * Yams Petroleum – 25%

The area has been much derisked with substantial finds in the region and in neighbouring Ghana and Sierra Leone. There is a lot of excitement and anticipation about the results of drilling this year and the next. Although developments in Cote D’ivoire have pushed off exploratory drilling by a few months, the stage is now set for  companies to resume operations, as most sanctions against the country have been lifted. Force Majeure was declared on some blocks by companies due to unstable and violent conditions. However, it is a matter of time before operations resume. It seems more likely than not, that drilling is going to introduce the country to significant additional reserves, and propel the Cote D’Ivoire into a significant oil and gas exporting country.  

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