2013 Will Define The Frontier - Africa’s premier report on the oil, gas and energy landscape.

2013 Will Define The Frontier

Kenya will be “confirmed”,  the Horn will gain recognition, North Africa will look shabbier  and Liberia is on a roll.

By Toyin Akinosho

2013 is going to be one determining year for Kenya, says Mwendia Nyaga, the East African Energy consultant. His conclusion is derived from Tullow Oil’s proposed extensive drilling campaign: 11 exploration and appraisal wells including follow up projects on last year’s onshore discoveries, Ngamia and Twiga South; this year’s ongoing wildcat drilling in Anza Basin as well as proposals to drill a number of prospects.

Tullow’s successful testing Twiga South as of late February 2013(2,800BOPD in three sands) corroborates Nyaga’s optimism, although the light hydrocarbon encountered in the  Paipai well in Anza Basin could not be flowed.

Nyaga sets so much store on Kenya’s offshore prospects. Here, I refuse to share his optimism. Apache’s 53metre net gas pay in Mbawa South in Block 8 only served to encourage my apprehensions. It’s the first gas discovery in Kenya’s offshore terrain, which has been a graveyard of exploration dreams. The fetch area of the geologic structure is small. Apache itself is not overly excited. The country’s hydrocarbon prosperity, I believe, lies onshore, in the several compartments of the East African rift basin system. It will be oil, it will be waxy. Some of it will be unlocked by Tullow’s 2013 drilling.

Tullow’s 2013 campaign will also help clarify the hydrocarbon status of the Horn of Africa. Malaysian operator Petronas was forced out of Ethiopia’s Ogaden region by militant attacks. The government handed over the property to Chinese company PetroTrans and revoked the contract a year later. Horn Petroleum drilled two dusters back to back in Somaliland in 2012, but the company says it’s going back to the seismic workstation.

For offshore prospects in East Africa, it’s “safer” to look farther southeast of Kenya. The trend is that the farther southeast you go, the gassier you get, but the larger the hydrocarbon tank. Mozambique’s offshore gas reserves keeps increasing over that of Tanzania, its northwestern neighbour. In late February 2013, Eni, the Italian major, reported that Coral 3, a new discovery within the Mamba Complex, confirmed the potential of Area 4 at 75 trillion cubic feet(Tcf )of gas in place. Eni and Anadarko are working together on unitization of their straddling structures. Combined, the two companies are looking at an excess of 150Tcf (notional, technical reserves). The Final Investment decision, for the proposed Two Train LNG project, will not be taken before 2014.

This year, the BG/Ophir partnership in Tanzania is hoping to drill some prospects in their Block 1, that mimic the  basin floor fans and amalgamated channel sequences , that have proven so much gas on the adjacent Mozambique side of the Rovuma Delta. Meaning: these operators are hoping that Tanzania could be Mozambique. We’d see. Don’t expect any final investment decision on the proposed LNG train in Tanzania in 2013 either. Apart from the fact that the operators in Tanzania are still tallying up the figures to be sure they can run with an LNG project, there is need for a company, like Shell ,Chevron or ExxonMobil, which has vast experience in LNG gas development, to join in these efforts, if such a project is to go forward.

Out in the west of the continent, Liberia is proving to be the next best thing after Ghana (in the new scheme of things). The Bee Eater-1 discovery in 1,067metres of water in Block L09 is the second discovery by African Petroleum(after Narina-1, 2012) within a year, and the company is upset that the failure of the rig Eirik Raude did not allow it to drill the planned second well in the campaign. AP made some particularly significant claims, one of which is that the Bee Eater-1 tested the Narina accumulation, as far as 9.5km west of the discovery.

In Angola, Cobalt will complete two Drill Stem Tests(DSTs) on its pre-salt Cameia Discovery. A lot is riding on this well. Cobalt is claiming that this is the key to prove the theory that the billions of barrels of oil found in the pre-salt sequence in the Lula(formerly Tupi) Field in Brazil’s Santos Basin extend to Angola. In geologic prospects offshore Southwest African countries like Angola, the next frontier is the Pre-salt sequence.
.Yes, 2013 will define the African frontier. But for now, let us look at some development projects.

Of all the outstanding development projects, the Angolan LNG project will likely come on stream before June 2013. Sonangol, the Angolan state hydrocarbon company broke the silence while announcing the annual report in late February 2013. The operators have had to surmount some major mechanical problems.

After  years of negotiations, the Nigerian state hydrocarbon company NNPC gave the go ahead for the field development of ExxonMobil operated Erha North and the TOTAL operated  Usan field. The drilling of the many wells to drain the reservoirs will start sometime in 2013. The contracts for field development facilities for Erha North have started being awarded. It wouldn’t take much more time for Usan to get to this stage too.

The Ugandan government is expected to approve what’s called the entire Lake Albert Basin development by July 2013. Tullow, CNOOC Limited and TOTAL presented a joint development plan concept to President Yoweri Kaguta Museveni in July 2012. A Committee was then set up by the Government of Uganda comprising representatives of key ministries and the three Operators to discuss the remaining issues in order to progress the plan with a view to harmonising plans for the development during the first half of 2013. Constructive discussions are ongoing.

There are anxieties for operators in North Africa, specifically in Algeria and Libya. It’s unlikely they will be rushing to do any new work in either country in 2013.

BP has said it was holding up drilling in Libya, on account of the tragedy wrought by The Al Queda-related hostage taking episode at the In Amenas Gas Plant in neighbouring Algeria. The British major had been bidding its time about implementing the terms of the 2007 Licence contract, excercised at the time of Ghadaffi. As the Libyan civil war loomed, however,  BP postponed its drilling campaign, both in the prospective onshore tracts  and the geologically murky  deep-water acreages. Now, a full year after the war, with American diplomats murdered in a fatal attack on the country’s embassy in Benghazi, and the new government unsure of securing the peace, Ghadaffi- the -devil –that- we knew hasn’t exactly been properly replaced with an environment of certainty. BP’s decision about its drilling campaign might be reflecting the thinking of most majors regarding investment in greenfield projects in Libya.

In spite of all the post- revolutionary marches, Egypt is the one oasis of certainty for oil explorers. But it is the smallest tank of all the region’s three major hydrocarbon provinces. Going by what we’ve always known, this country will keep helping small companies to grow and possibly transform, granting them access to low hanging fruits, but for big companies, it only acts to top up their reserves a little.


1 comment

  1. Khaja says:

    that once you’re in orbit you’re halfway to aryhwene . That is, it takes about as much energy to get from Earth orbit to aryhwene in the solar system (i.e. escape velocity) as it took to get into Earth orbit in the first place. If a rocket only had enough propellant to make it to orbit, and then it refueled while it was in orbit, it could have enough fuel to get to any destination in the solar system. If it then refueled on the other end, it could come all the way back. With fuel depots both in Earth orbit and in orbits at various destinations throughout the solar system, you could have craft that never return to the earth but simply cross back and forth across the Earth-moon system to start, and then eventually all over the solar system, refueling as needed but never landing.Propellant depots in Earth orbit and lunar orbit would definitely want to stock LH2 and LOX, and at first these would be supplied from the Earth. However, there is a class of asteroid called Carbonaceous Chondrite which consists of about 20% water. This is a rare sort of asteroid but meteors of this type have hit the Earth. Such an asteroid could be mined for its water, which would then be broken up into Hydrogen and Oxygen, cooled and compressed at which point they become a commodity.Such a rock need never be brought back to Earth. Instead, its orbit would be changed to ring it into Lunar orbit, where large (in orbit, so arbitrarily large) reflectors would focus sunlight to vaporize the rock for subsequent capture of vapor, refining and storage.Planetary Resources plan is to find these Carbonaceous Chondrite asteroids. To do this, it will launch 5 small satellites (each about the size of my microwave oven. Yes, I realize you can’t see my tiny microwave, but you get an idea of the scale) each containing a small telescope. These satellites will orbit the earth scanning the skies for Near Earth Approaching asteroids, cataloging all they find. The images received will allow spectral characterization of the NEAs, which will allow them to find the CC asteroids among the millions of asteroids which orbit close to Earth.The amount being spent to build and launch these small satellites is $30 million a far cry from $20 billion or $100 billion. Once suitable candidate asteroids are identified, a swarm of small satellites similar to the first batch will be outfitted with ion propulsion and sent to get a close up look at target asteroids, gathering data. The total cost of building, launching, and operating these small satellites is less than even one NASA mission to an asteroid such as the NEAR mission to Eros and the data retrieved would be worth something. Even if Planetary Resources chooses not to do anything with an asteroid but observe it up close, the scientific value of the data translates easily into monetary value. It is cheap to transport bits back to Earth. The company then proceeds step by step in these small, inexpensive satellite swarm missions, continually building up the technology necessary to move the asteroid into lunar orbit and mine it for rocket fuel, which would then be sold to anyone looking to refuel their spacecraft in orbit. Being first has its risks, but if it pans out for Planetary Resources, they could become the biggest fuel company in the solar system.

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