The East Threatens A Downpour - Africa’s premier report on the oil, gas and energy landscape.

The East Threatens A Downpour

By Toyi Akinosho

Mozambique is trying hard to be the next Ghana.

Since late November 2010, the news from the south easternmost country in Africa have been mostly about the confirmation of large reservoirs, filled with hydrocarbon, buried in the deep blue waters off the adjoining coastline of the Indian Ocean.

The only reason we are not cheering the way we applauded the finds in Ghana’s deepwater in May 2007 is that the hydrocarbon type is largely gas.

Take note of this: in spite of the rise and rise of methane as a choice fossil fuel in the last decade, the African petroleum industry still finds stories of discovery of large crude oil pools more reassuring, because the domestic markets for raw or processed hydrocarbon, especially in the sub-Saharan part of the continent are small. The fertilizer for tens of millions of people, are minuscule by the standards of developed countries. So companies are not always readily excited about delivering projects that beneficiate gas resources.

However, let us look first at these assets for the surprise they have been.

We have always guessed that the east African crustal plate contained a lot of small gas tanks.

These resources, we reckoned, would be enough to drive the regional economy: from Mozambique, it would provide sizeable export for gas -to —synthetic fuel plants in South Africa; in Tanzania, it would deliver enough feedstock for small IPP plants and CNG facility. There will be enough gas for export to the port of Mombassa, in Kenya for conversion to LPGs.

No one ever suspected that an extra large facility, say an LNG project, could result from exploration on this side of the Indian Ocean.

But that possibility is beginning to loom large. Anadarko’s recent discoveries in the deep blue waters off Mozambique, in 2010, belong in the same class as the Mahogany oil find, off Ghana, in 2007. They are both elephant sized discoveries, contrary to the popular geologic imagination of the region at the time they were encountered.

Baquentine encountered a total of more than 416 feet net of natural gas pay in multiple high- quality sands. Lagosta encountered more than 550 feet net gas pay in multiple high quality Oligocene and Eocene sands. Specifically, the Barquentine well encountered more than 308 net feet of pay in two Oligocene sands that are separate and distinct geologic features, but age-equivalent to those encountered in Anadarko’s previously announced Windjammer discovery located three kilometres to the southwest. Anadarko doesn’t supply any more information (porosity, permeability) to corroborate its claim that these are “high quality” sands. And we don’t yet know how thick each of these sands are, but the results call for excitement. (For instance, if you stack twenty reservoirs in a 500feet net gas package, it means that that the average thickness for one sand is 25 feet).

The Mozambican reservoirs are tertiary sands, markedly different in age from the cretaceous play of the Ghanaian reservoirs. They are closer in age to the deepwater sands of Angola and Nigeria. The Mozambican finds support the speculation that the tertiary was the great age of hydrocarbon generation in the sinks surrounding the continent. It’s the same line of speculation that adduces that the Ghanaian reservoirs, deposited in the transform margins that hold the reservoirs of the Rio Muni )Equatorial Guinea), Abidjan Margin(Cote D’Ivoire) and probably the Sierra Leone- Liberian basin, are going to be few. These cretaceous fairways are shorter than the tertiary fairways that produced the Congo Fan(Angola) and the Niger Cone(Nigeria).That the Mozambican reservoirs may be in a different ocean today, but have closer depositional and age relationship with pools that are located in another sea, half the world away is proof that Geology is not Geography. What I am saying in effect is that Mozambique might have more elephants than Ghana, on the long run. The challenge remains the fluid type: gas. Delivering the LNG business is not as easy as selling the crude oil.

As I was writing this, the drillship Belford Dolphin was arriving on location at the Tubarao wellsite, the fourth location in the Offshore Area 1 acreage off Mozambique’s Rovuma Basin, where Anadarko encountered those three spectacular finds. It looks like we are set for a cheerful year. Anadarko, the company which provided most of the funds for the first discovery in Ghana and went on to unlock reservoirs in deepwater Liberia, has cracked another African geologic code. It’s Anadarko’s time.

Tanzania hasn’t been as exciting as Mozambique. This, at least, is our interpretation of the caution with which information on recent, similar drilling, has been coming out of that place. BG, the British gas major, has encountered gas in its two wells in deepwater Tanzania, in the same Indian Ocean waters, where Anadarko’s Mozambican finds have been reported. Pweza 1 and Chewa-1, both located on Block 4, are two of a three-well initial work programme planned for Blocks 1, 3, and 4 offshore southern Tanzania. The initial work programme also includes the acquisition of 4,000 sq km of 3D seismic data. BG Group (60%) has the option to assume operatorship of all three blocks upon completion of the initial work programme.

The statements from partners BG (60%) and Ophir(40%) are carefully worded sentences: “The success of the Chewa-1 well follows on from the earlier Pweza-1 discovery and provides a measure of confidence in the use of seismic attributes to guide a successful exploration campaign, in Tanzania” says Allan Stein, CEO Ophir. “We have now calibrated the seismic response from two separate hydrocarbon bearing reservoir intervals and shall use this information to more fully evaluate the potential of this exciting new hydrocarbon province.”

Frank Chapman, BG Group Chief Executive, sounds even less excited” This is an encouraging start to our campaign in Tanzania. We have a large acreage position to explore and an extensive exploration program will be needed to assess the full potential of this new play.”

But again, what is going on there is not what we were expecting.


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