E&P Opportunities in West Africa & South-West Africa

West Africa is fast becoming a hotspot for the global oil and gas industry. A string of spectacular finds has shown this area to be a new petroleum province with multi billion barrel potential. The majors are there, and so are many smaller players. According to Derrick Petroleum’s “Deals in Play’ database, as of July 2011, there are 76 opportunities available and recorded in the whole of Africa . Out of this, 22 opportunities are in West and South-West Africa (Table 1).

Map: Opportunities are represented by the colored stars. Place cursor over stars for information. Subscribers can click the stars for detailed information from Derrick's "Deals in Play' database. 

There are >20 opportunities recorded in the Derrick “Deals in Play’ database. By far, most opportunities are for exploration activity, followed by opportunities related to developing discoveries. One big M&A opportunity is recorded and some producing assets are put up for sale.  Equatorial Guinea and Angola have the most opportunities (4 each). In Angola, ExxonMobil is looking to exit Block 31 and INA-Naftaplin has put its assets up for sale for which combined deal values exceed $2 Billion according to Derrick Petroleum estimates. 

The following figure is a breakdown of opportunities in Africa from Derrick's "Deals in Play' database. 

Cameroon: Oil and Gas Exploration in 2011 and 2012

Cameroon is a country on the West Coast of Africa.  It is bordered by Nigeria to the west; Chad to the northeast; the Central African Republic to the east; and Equatorial Guinea, Gabon, and the Republic of the Congo to the south. Cameroon has relatively modest oil and gas reserves, although it accounts for about half of the country’s exports. Oil production has also been declining in recent years due to maturing of existing fields. Here is a list of operators with plans to drill exploration wells in the near future. Also listed are operators that had plans to drill in the next 2 years, but who have since not made any announcements.  Information has been sourced from Derrick Petroleum's exploration and deals databases.

Block	Operator	Wells planned in 2011	Wells planned in 2012+
Bomono	Bowleven plc		2
Kombe-N’sepe	Perenco
Ndian River	Kosmos Energy (Africa)
MHLP-5	Bowleven plc
Tilapia	Noble Energy Inc	1

 Exploratory wells planned to be drilled/being drilled in Cameroon in 2011 and 2012. Source: Derrick Petroleum Planned Wells Exploration Database. The number of columns has been minimized to fit the table on the page. The actual database has many more parameters listed and recorded. 

1.             Bomono: The Bomono permit is located onshore Cameroon near Mt. Cameroon. It consists of 2 parts, OLHP 1 and 2, covering an area of 2328 sq kms. In February 2009 work commenced on the airborne gravity and magnetic survey. A 500 km 2D seismic survey was obtained by Jan 2011. Bowleven is planning to drill upto two wells on the permit in H1 2012. Bowleven has a 100% interest in the permit.

Map of Bowleven’s permits in Cameroon. Source: Bowleven.

2.             MLHP-5, MLHP-6 and MLHP-7: Bowleven operates these three shallow blocks in the Etinde Permit area with a 75% interest. The Blocks are located across the Rio del Rey basin (part of the southern margin of the Niger Delta oilfield basin) and the Douala Basin (which contains large undrilled seismically identified structures), together referred to as the Etinde Permit. The Etinde Permit covers approximately 2,314 km2. The water depths are shallow, from the shoreline up to approximately 70 meters maximum depth.

The Company drilled a high impact exploration well Sapele-1 on MLHP-5 on September 14, 2010. The well was to target a series of stacked reservior objectives, from the proven Miocene fairway down to the deeper Cretaceous fairway. The Sapele-1 well encountered a significant layer of hydrocarbons. Wireline log evaluation indicated all of the five objectives to be hydrocarbon-bearing with net pay confirmed in three, based on fluid samples. Bowleven has a 75% interest while Vitol E&P has 25% interest.

3.             Kombe-N’sepe: Kombe-N’sepe Block has an area of 3026 sq kms. The Kombe-N’sepe Block is located at the northern end of the late Cretaceous turbidite play fairway that extends from northern Gabon through Equatorial Guinea into southern Cameroon. More than two billion barrels of oil have been discovered in the region. Operators have made several small oil and gas discoveries in and around the Kombe-N’sepe Block. A two-well exploration campaign was planned to begin in either 2009 or early 2010. However, pending further announcements by the consortium, it is unlikely that an exploration well will be drilled in 2011. Perenco (40%) operates the block and the partners are Kosmos Energy (35%) and Société Nationale des Hydrocarbures (25%)

Source: Kosmos Energy

4.             Ndian River: Ndian River Block is located in Coastal strip of Rio del Rey Basin bordering Gulf of Guinea and abutting Cameroon/Nigeria border (predominantly onshore). Société Nationale des Hydrocarbures will be carried through exploration and appraisal phases and has an option to back in to the project with an interest of up to 15% upon approval of a development plan. Kosmos initially is focusing on the Ndian River Block’s under-explored northern extension of the late Cretaceous/lower Tertiary turbidite play. Since 2007 exploration activities have included a gravimetric and magnetic survey of the block, field studies, reprocessing of existing data and a 2D survey over an area with the highest potential. It is unlikely a well will be drilled in 2011, as the partners are not talking about it so far.

 5.             Tilapia: Tilapia block is located in the Douala/Kribi-Campo basin offshore Cameroon and covers a total area of 3,874.9 sq km. A 3D seismic survey was acquired in 2010 and an exploration drilling program was to commence in 2011. However, pending further company announcements, it is likely that exploratory drilling will only occur in 2012. Noble Energy (50% interest) is the operator along with partner Petronas (50% interest). 

Source: Noble Energy

For more information of discoveries and exploration plans for the following West African countries, click on the following links. Cote D’ivoire; Ghana discoveries; Ghana Exploration in 2011, Exploration in Mauritania, Benin & Togo; Angola; Sierra Leone; Sengal; Liberia; List of West African discoveries in 2010 – 2011.

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Mauritania, Benin and Togo: Overview of Oil and Gas Discoveries and Exploration in 2011

                                                        

Mauritania, Togo and Benin are countries in West Africa that are generating a lot of interest due to some significant discoveries in adjacent regions. This article provides an overview of exploration activity in these countries and the main active players looking to explore in 2011 and beyond.

The following table lists the companies with plans to drill or conduct exploratory studies leading to drilling in this region.

Source: Derrick Planned Exploration Wells Database. The number of columns has been minimized to fit the table on the page. The actual database has many more parameters listed and recorded. 

For more information of discoveries and exploration plans for the following West African countries, click on the following links. Cote D’ivoire; Ghana discoveries; Ghana Exploration in 2011; Angola; Sierra Leone; Sengal; List of West African discoveries in 2010 – 2011; Liberia

                                                                          Mauritania

Discoveries
The Chinguetti oilfield is located off the Mauritanian coast in 800m of water. It was discovered by the Australian firm Woodside Petroleum in 2001. It is named after the city of Chinguetti. Oil production began in February 2006 from the Chinguetti oilfield, which is located in the Atlantic Ocean 56 miles southwest of Nauakchott.  According to the Energy Information Agency (EIA), a division of the US Energy Department, oil output began at 30,620 barrels per day (bpd). Production quickly climbed to 75,000 bpd by late 2006.  However, in 2007, output  declined dramatically because of “geological complexities” and by the spring of 2008, production was just 11,500 bpd.  Field production declined from 8,600 b/d in January 2009 to 7,400 b/d in December last year. Given the decline in production, the partners in the field are mulling shutting down operations there. Domestic consumption of oil is 21,000 bpd. In addition to Chinguetti field, Mauritania has several other offshore oil and natural gas fields that are being developed.  Proven oil reserves are estimated at 100 mn barrels, which is 21.4 years of production at the 2008 extraction rate. 

Map of Blocks in Mauritania. Source: Roc Oil

The Pelican-1 exploration well located in the southern part of Block 7 was drilled in over 5,500 feet of water to a total depth of approximately 12,500 feet. The well discovered a significant hydrocarbon bearing sequence spanning over 1,000 feet in height. 

The Banda field was discovered in 2002. The Banda Field is in approximately 300 metres of water and spans PSC Area A and PSC Area B. The Banda Field is estimated to contain upto 3 – 5 tcf of natural gas. In 2008, two successful appraisal wells were drilled on the Banda discovery; Banda North West and Banda East. The same oil and gas contact was encountered at all three wells in the Banda field. During 2009 the seismic and well data was incorporated into the geological model to determine the commercial potential of the field and this work is ongoing.

The Tiof discovery is located approximately 90 kilometres west of Nouakchott, the Mauritanian capital, and 25 kilometres north of the Chinguetti Field. The Tiof field is estimated to hold 350 million barrels of oil. It was discovered in 2003. The discovery of the 1.5 trillion cubic feet Pelican field on Block 7 by British firm Dana Petroleum added to the excitement.

The Tevet Field was discovered in 2005 by the operator Woodside Petroleum, and is believed to contain between 50 million and 100 million barrels of oil and may be tied into the Chinguetti development.

The Cormoran-1 exploration well, located in offshore Block 7, completed drilling in January 2011. It lies ~ 2km to the south of the Pelican-1 gas discovery well, which was drilled in late 2003. The objective of the well was to appraise the Pelican gas discovery and to target two underlying exploration prospects, Cormoran and Petronia. The well successfully intersected gas in both Pelican and Cormoran. The Pelican interval was flow tested at a stabilised flow rate of approximately 23 mscfd. In the deeper Petronia target, the well encountered rich gas in Turonian-age reservoirs. However, drilling had to be stopped for operational reasons soon after penetrating the trap. Dana Petroleum (36%) is the operator of the block and the other partners are Woodside (15%), Gaz de France (27.85%), Tullow (16.2%) and Roc Oil (4.95%).

Exploration in 2011

The TA7 and TA8 permits are located onshore in central Mauritania. A well was drilled in TA8 in 2009 which failed to encounter hydrocarbons. A 1000 sq km of 2D seismic acquisition over TA7 commenced in early 2011. Total (60%) is the operator of the permits along with partners Sonatrach (20%) and Qatar Petroleum (20%).

Apart from the Cormoran-1 exploration well mentioned above, the result from the Gharabi-1 well in Block 6 was announced in February 2011. The well, which was selected by the operator to meet licence commitments, intersected poorly developed water-bearing reservoirs. In 2011, the partners plan to continue defining prospects throughout the Mauritania-Senegal basin with further planned exploration activity in 2011 and 2012. Petronas (72.60%) is the operator of Block 6 along with partners Tullow (22.4%) and Roc Oil (5%). The Sidewinder prospect in this block is due to be drilled in the second half of 2011.

The highest profile investor has been Petronas, which bought a 47.4% stake in the Chinguetti project from Woodside. It is part of a $418m package that also gives the Malaysian firm the role of operator on the Banda, Banda Tevet and Tiof fields.

There is certainly plenty of scope for further discoveries offshore Mauritania, particularly given the short history of hydrocarbon exploration in the country. The eight blocks, over which exploration can happen, cover most of the country's offshore acreage and are huge in comparison with the concessions carved out in Nigeria and elsewhere in the Gulf of Guinea.

  

                                                                              Togo

Togo is a country lying between Ghana and Benin. Recent high profile successes in neighbouring Ghana have transformed the exploratory potential of its offshore acreage. ENI acquired Blocks 1 & 2 and has a 100% interest. The blocks are located in the Dahomey Basin, offshore Togo. The blocks are scarcely explored and are bordered to the west by the analogous Tano basin where major discoveries have been made previously. ENI plans to commence an aggressive exploration program in 2011 which could culminate with the drilling of a well in 2012. ENI announced on March 10, 2011, in its 2011-2014 Strategic Plan that it will spend about €53.3 billion for ­upstream ­activities to increase global oil and gas and to start new projects in promising exploration prospects in countries such as Togo, Ghana, Democratic Republic of Congo and Mozambique. 

                                                                               Benin

The Republic of Benin is situated to the west of Nigeria. The offshore basin includes the Seme north and Seme south fields (80 mmboe) discovered in 1975, and the Hihon-1 and Fifa-1 discoveries (drilled by Kerr McGee which was later acquired by Anadarko). Onshore, a tar belt in the coastal region has been sourced from a Lower Cretaceous lacustrine kitchen located offshore. These hydrocarbons prove the existence of working petroleum systems in the region and there appears to be considerable remaining exploration potential in the offshore area.

Anadarko drilled the Sota 1 wildcat in 1,924m of water on Block 4 during the summer of 2007 which was dry.

Figure of blocks in Benin. Source TGS

Petrobras recently entered Benin by acquiring a 50% interest in Block 4 which covers a huge area of 7400 sq km. The block lies at a water depth that varies from 200 to 3,000 m, and is about 60 Km from the coast. The block is located in the Gulf of Guinea’s Dahomey Basin. Lusitania Petroleum holds the remaining 50% and is operator although Petrobras has the option to assume operatorship. The company has made a commitment to collect and process 2,250 sq km of 3D seismic data by the end of 2011 and once the exploratory potential of the area is confirmed, the consortium will commence operations, initially drilling 3 wells.

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%         

CI-103
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
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.