Equatorial Guinea: Progress Stalls on Exploration Front - Africa’s premier report on the oil, gas and energy landscape.

Equatorial Guinea: Progress Stalls on Exploration Front

THE MOST CURRENT NEWS on the West African fairway is that Equatorial Guinea is trying to be a large gas supplier to the United States.

It makes a lot of sense, considering that progress is not as vigorous as it used to be in the deepwater- until recently- the country’s core hydrocarbon business. There has been little significant development on the exploration front in deepwater Equatorial Guinea since 2005.
In the only exploration well drilled in 2006, operator Chevron plugged and abandoned L-2, its second (wildcat) well in Rio Muni’s Block L in May 2006, after failing to encounter hydrocarbons. L-2 was drilled on the Banyan prospect, with the hope of testing the hydrocarbon potential of a Campanian reservoir. The well is located in 1,980m Water Depth.  It went a further 2,000 meters to TD at 4,076m.  Block L is located in the Rio Muni Basin.  It covers 2,584 sq km west of Devon’s Block P and includes grid blocks I-15, I-16 and part of blocks J-14 and J-15.  The tract was reduced by 40% upon renewal in October 2005. The company almost immediately indicated that it was walking out of the block and by implication, out of the country.

It is significant that Hess Corporation, a 12.5% partner, also decided to abandon the lease. Hess is the leading producer in the Rio Muni Basin and, observers would assume it knows more about the geology than anyone else. Sasol, which originally held 10%, has reduced it to 5% and still looking to get out completely. Petrobras, with 50% interest already, has stepped into operatorship role. But Petrobras has recently been seen as bullish on investment in lease holding in Africa recently. Still deepwater Equatorial Guinea is nothing if not a mixed bag. While Chevron and Sasol are leaving and Petrobras is hoping for valid reason for staying around, Devon Energy and Noble Energy hope they have found something worthwhile. The discovery of45m of net oil pay in Campanian sands in late 2005 is the reason for Devon’s optimism. Noble is excited by the 24MMcf/d of gas and 1,225 BCPD of condensate it tested in the O-1 wildcat on the Belinda prospect in Block O. The company says that the flow rates were limited by surface test equipment.

Devon’s 45metre oil discovery in multiple channel sands off Equatorial Guinea, has been the exception in its overall experience as an operator in Africa. The company, which has found nothing else anywhere on the continent since it showed up as an operator in 2000, had announced the commencement of a three-well programme to evaluate the 2005 discovery. Devon has performed detailed seismic interpretation and AVO analysis and commented that the accumulation could be brought on-stream by 2008 if drilling of other wildcats/appraisals were successful. But the company’s more recent story is that it is getting out of Africa completely. Which is as well; the wildcat P4, the first of the three planned wells, has turned out to be disappointing. The interests in the licence are shared between operator Devon Energy, 38.4%, Petronas with 31%, DNO 5%, Atlas Petroleum 5.6%, and GEPetrol 20% (carried).

The latest hydrocarbon discovery in Equatorial Guinea was made by Noble Energy in October 2005. The O-1 wildcat, which targeted the Belinda prospect, tested up to 24MMcf/d of gas and 1,225 BPD of condensate from Miocene sands.

But exploration effort can’t be written off in Equatorial Guinea just yet. ExxonMobil is planning a 500 sq km 3D seismic survey in the Zafiro field area in the third quarter of 2007. CGG would be the contractor. Noble Energy will start a multi-well programme in blocks I and O in early 2007, using the drillship “Songa Saturn”. Wildcat Benita 1 in Block I will be the first well. Roc Oil may drill the Aleta prospect in B lock H in September 2007, using the drillship Aban Abraham. ExxonMobil may drill a follow- up well to the Esmeralda 1 gas and condensate find in Block B and a wildcat in Block C. CNOOC is looking for a rig to drill a well in Block S in late 2007 or in 2008.

The Zafiro oil and gas field is located in the Niger Delta basin, some 70km west of Malabo. Discovered in March 1995, it was brought onstream in August 1996.

While earth scientists are finding it hard to top up the volume of reserves in Equatorial Guinea, petroleum engineers are running the taps. Hess has brought on stream its Okume Complex in Block G with an initial rate of 4,000 BOPD flowing from December 14, 2006. The production is being delivered from a single well at the Okume “B” platform. Peak production is expected to be 60,000 BOPD by mid-2008. Hess Corp. operates the field with 80.75% interests, with Tullow Oil holding 14.75% interests. The state company GEPetrol is carried with 5%.

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