Afren, the AIM listed African company, has entered into a Heads of Agreement with Gulf Energy Resources to acquire a 5% stake in Angola ‘s Cabinda Central License Block B. Devon Energy is the operator ofthe 1,125 sq km license located in the Cabinda province of Angola. Other partners in the block are Repsol 25%, Sonangol 20%, and Petrogal with 20%. The acquisition is consistent with Afren’s decision to further expand its presence in Western Africa by entering into one of the most promising onshore blocks in the second largest subSaharan producing country. Devon plans to recommence exploration work in the License subject to the effectiveness of the Production Sharing Agreement (PSA) Balkany revealed
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EGYPTIAN GAS HOLDING COMPANY (Egyptian Gas Holding Company EGAS) has awarded six oil prospecting blocks to as many operators in its third bid round in five years. Austrian company OMV got the 9,140 sq km Obaiyed Offshore exploration block, located in the Mediterranean waters. The main part of Obaiyed offshore lies in deep waters, off the city of Matruh. German independent RWE Dea was awarded 100% working interest in Tanta, a new onshore concession located partly in the prolific Nile Delta area. The 3,300 km2 block adjoins RWE Dea’s Disouq concession, which lies to the north, where the company only recently tested oil successfully in a wildcat Tayifah 1. Algeria’s state oil company Sonatrach was assigned the El Dabaa Offshore block (see story below on this page). Meanwhile, two exploration blocks went to India’s Gujarat State Petroleum Corp. (GSPCL). North Hapy block covers 4,180 sq km in the offshore Nile Delta, and will be mainly to explore for gas. The area remains so far totally undrilled. South Diyur covers 37,678 sq km in the Western Desert, southern Egypt. This is considered a medium risk, high reward asset and has a possibility of natural gas and crude oil. Available data on the lease includes 1,165 km of 2D seismic profiles as well as two wells.
OMV plans to conduct a 3D seismic program in the block in Obaiyed block; RWE Dea is committed to drill at least two wells in addition to acquiring 3D seismic with minimum expenditures of $1 8.9MM in the first three years.
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Dana Petroleum has signed two onshore offshore exploration agreements in Morocco. In the first deal, the company would acquire a 15% working interest in the Repsol operated Tanger-Larache Blocks 1, 2 and 3 offshore Morocco while relinquishing 3% of its interest in Blocks L5 AND L7 offshore Kenya to Repsol. In the Bouanane Reconnaissance Contract License area, onshore Morocco Dana acquired 50% working interest to become the operator while the original lease holders Tethys Oil AB (“Tethys”) and Eastern Petroleum (Cyprus) Limited (“Eastern”) parted with 2.5% and 25% respectively. The TangerLarache blocks cover some 5,495 square kilometres, with water depths ranging up to 600 metres. The co-venturers have already acquired some 520 square kilometres of 3D seismic aimed at refining exploration prospects for drilling. Seismic data indicates a number of high-potential prospects within a relatively short distance of the coast and with a nearby gas-fired power station and indigenous market for gas, the block stands as a potential for development. Following completion of the transaction the Tanger-Larache partners will be Dana 15%, Repsol 30% (operator), Gas Naturel 30% and Moroccan state organisation ONHYM 25%. The Block L5 and L7 partners will be Dana 27%, Woodside 30% (operator), Repsol 23% and Global 20%.
Dana Petroleum has signed two onshore offshore exploration agreements in Morocco. In the first deal, the company would acquire a 15% working interest in the Repsol operated Tanger-Larache Blocks 1, 2 and 3 offshore Morocco while relinquishing 3% of its interest in Blocks L5 and L7 offshore Kenya to Repsol. In the Bouanane Reconnaissance Contract License area, onshore Morocco Dana acquired 50% working interest to become the operator while the original lease holders Tethys Oil AB (“Tethys”) and Eastern Petroleum (Cyprus) Limited (“Eastern”) parted with 2.5% and 25% respectively. The TangerLarache blocks cover some 5,495 square kilometres, with water depths ranging up to 600 metres. The co-venturers have already acquired some 520 square kilometres of 3D seismic aimed at refining exploration prospects for drilling. Seismic data indicates a number of high-potential prospects within a relatively short distance of the coast and with a nearby gas-fired power station and indigenous market for gas, the block stands as a potential for development. Following completion of the transaction the Tanger-Larache partners will be Dana 15%, Repsol 30% (operator), Gas Naturel 30% and Moroccan state organisation ONHYM 25%. The Block L5 and L7 partners will be Dana 27%, Woodside 30% (operator), Repsol 23% and Global 20%.
IHS Inc., the global provider of integrated oil and gas information, software and consulting services, says it has been engaged by Angola’s state hydrocarbon company Sonangol, to help facilitate an offshore E&P licensing bid round for Angola in early 2007. No additional details regarding timing or blocks to be offered are available at this time. More information will be released as it becomes available.
Algeria has moved its next bid round date to early 2007. Plans are to offer 10 packages of open blocks. The 7th Bid Round announcement was originally planned for October2005, but has been affected by the lengthy, drawn out reform in the responsible ministry. Plans were delayed in order to establish two new agencies under the Ministry of Energy and Mines, one of which is to conduct the bid rounds. Then again the Ministry was bogged down with the passage in 2005 and the revision in 2006 of the Hydrocarbons Law, whichintroduced a windfall profits tax, among other things. As an African opportunity, Algeria is facing competition for exploration investments from Libya, Nigeria and Angola. It has plans to increase crude oil production to 1.5 MMBOPD in the short term and to 2.0 MMBOPD by 2010 from the current 1.4 MMBOPD. In this regard, the country must replace crude oil reserves by attracting FDI (foreign direct investment) most of which is made by FOCs (foreign oil companies).
The Cabinda Central Licence Block B looks dicey, but…
AFREN PLC, THEAIM LISTED independent targeting African resources, has shown up in Angola, scouring for opportunities. Its first choice, to go by the map, doesn’t look exciting. The company has entered into a Heads of Agreement with Gulf Energy Resources to acquire a 5% stake in the Cabinda Central License Block B, Cabinda province, onshore Angola. What the map does not show is that a number of wells did encounter- in the general onshore Cabinda area-encouraging oil shows in fractured basement and in the pre-salt sediments. In actual fact, most of the wells in this area were drilled in the mid 1960’s on minimal seismic data or just gravity data, or-for that matter-rudimentary surface geology mapping. Discussions with some oil industry analysts on this acquisition by Afren, reveals that it is geologically and strategically a very well placed move by the company. From a regional hydrocarbon perspective, the onshore Cabinda area is optimally placed in that it is the onshore extension of the prolific geology of Block 0, where Chevron is producing over 400,000BOPD. The NW-SE geologic trend of Chevron’s oilfields show that this trend should extend into the onshore area. Had there not been 27 years of civil war in Angola, this area could have been explored and probably developed and placed on production decades ago.
Devon Energy is the operator of the 1,125 sq km license. Other partners in the block are Repsol 25%, Sonangol 20%, and Petrogal with 20%. Devon plans to re-commence exploration work in the License subject to the effectiveness of the Production Sharing Agreement (PSA).
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