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Sonangol Drills Ahead on a Rare Onshore Asset in Luanda Province

Sonangol has spud a well in the Block KON11, onshore Kwanza Basin, with the operation of “Poço Tobias-13”), located in the commune of Cabo Ledo, municipality of Quissama, province of Luanda.

The drilling is coming 27 years after the company disbanded its operations from the area.

The well is expected to reach a total depth of between 700 and 800 meters.

The company has assessed the field, which is marginal, as holding an estimated volume of six million barrels

Sonangol operates KON11, with 30 percent stake. Partners include Brite’s Oil and Gas (25 percent), Grupo Simples (20 percent), Atlas Petroleum Exploration (20 percent) and Omega (5 percent).

In attendance at the spudding event were Diamantino Azevedo, the Angolan Minister of Mineral Resources, Oil and Gas, Paulino Jerónimo, President of the Board of Directors of ANPG, Sebastião Gaspar Martins, President of Sonangol’s Board of Directors and Clementina Palma, the communal administrator of Cabo Ledo, as well as administrators, Block manager, and managers assigned to the oil companies.

Will the Gold Rush for Offshore Rigs Continue into 2024?

By Gerard Kreeft

Gold rush fever has hit the offshore oil and gas market.

True, oil companies are proving to be skimpy with their needed investments and the oil prices (Brent) are holding relatively stable at $85.
Yet a tightening deepwater rig market, and a decreased number of deepwater basins from which to explore, have created a specialist market. The rig owners who own the deepwater drillships and rigs are virtually in a monopoly position and are able to extract day rates approaching $500,000; day rates not seen since 2014-2015.

Deepwater operators, anxious to maintain continuity of their exploration and production operations, are faced with fewer deeper basins to explore, and reduced budgets given the competition of new energy.

What can we anticipate? More gold rush fever?

The Case of the Operators

In a 2021 study of deepwater basins, Andrew Latham, Wood Mackenzie’s Vice President  for Energy Research, predicted that deepwater upstream growth was expected to rise to over 17MillionBOEPD(barrels of oil equivalent per day) by 2030 from 10MillionBOEPD. He concluded that almost half of oil and gas reserves being sanctioned over the next 5 years will come from deepwater. Why are deepwater plays so important?

Simply because of reservoir fundamentals.

Deepwater reservoirs produce substantially more than shallow or onshore reservoirs. Estimated Ultimate Recovery (EUR) in deepwater averages 12Million Barrels of Oil Equivalent Per Day (12MMBOEPD)  for oil wells and 43MMBOEPD for gas wells. Future deepwater fields enjoy twice the average EUR of fields already on stream, reflecting the industry’s success in Guyana and Brazil’s Santos Basins.

Brazil has an average EUR of 14MMBOEPD per well.

Angola has an average EUR of 10MMBOEPD per well.

Nigeria has an average EUR of 16MMBOEPD per well.

Guyana has an average EUR of 24MMBOEPD per well.

 Average EUR for gas wells up to 2009 was 31MMBOEPD; that has now jumped to 90MMBOEPD, based on gas finds in the eastern Mediterranean, Mozambique, Mauritania and Senegal.

Rystad estimates that oil and gas consumption will continue at a rate of 100MMBOEPD per day through 2024. The breakeven price for developing 83% of undeveloped reserves is $65 per barrel. Offshore capex for 2023 is estimated at $191Billion and $198Billion for 2024.

In WoodMac’s analysis, much of the deepwater exploration will  take place within the golden triangle— meaning– Latin America (Brazil, Guyana and Suriname); North America (US Gulf of Mexico, and Mexico) and Africa (Atlantic Margin and East Africa gas). These three regions plus the eastern Mediterranean account for 75% of global deepwater rig demand.

The Case of the Drillers

Currently, the total benign floater supply has declined to 156 units from a peak of 281 in 2014. Three contractors—Transocean(38), Valaris(51), and Noble(32)–own 121 of these rigs, creating a near monopoly. Their share prices have skyrocketed between July 2021-June 2023:

Transocean increasing 40%;

Valaris increasing 153%; and

Noble increasing 200%.

Table 1: Stock market prices of rig owners  July 2021- June 2023

Year Transocean Valaris Noble
2021 $5 $30 $9
2023 $7 $76 $27

Rig utilization for benign ultra-deepwater hit 90% in the last few months with current day rates of $470,000/day – only marginally below the 2014 peak. Demand momentum will continue through 2025.

There are only 10 competitive warm or cold stacked drillships remaining.  Only eight (8) newbuild drillships remain in the South Korean shipyards. Will the demand gap set off a new building spree? Not likely. Drilling contractors will be reluctant to commit to new builds without long-term contracts, which operators are unlikely to offer. Many rig owners will continue to manage and enhance margins on their existing fleet, while taking the lower-risk option of reactivating the most capable and viable stacked rigs under firm contracts.

Future building of new rigs will depend on timing: wells drilled in 2023 could lead to new oil supplies by 2030 and payback time perhaps by 2035; deepwater gas wells require a longer lead time.

Final Remarks

The deepwater play has become a specialist market between oil and gas companies and the drilling fraternity. Their relationship, though fraught with ongoing bickering regarding dayrates and rig availability remains a prisoners’ dilemma: each requiring the other to ensure project closure.

 Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil + Gas Report, and is a guest contributor to IEEFA(Institute for Energy Economics and Financial Analysis). His book ‘The 10 Commandments of the Energy Transition ‘is on sale at https://books.friesenpress.com/store/title/119734000211674846/Gerard-Kreeft-The-10-Commandments-of-the-Energy-Transition




Sonangol Prepares to Return to Drill in Onshore Kwanza Basin


Angola’s upstream petroleum regulator ANPG is, with the E& P arm of the state hydrocarbon firm Sonangol, preparing the grounds for drilling and evaluation of Block KON11, in the Kwanza Onshore Basin, in Luanda, “with technical procedures in progress to guarantee the execution of the contract within the safety standards and respect for the environment required by the industry.

The execution of the operations of the Block, which had been inactive since 1996, is the responsibility of the consortium formed by Sonangol Pesquisa e Produção (with 30%), as operator, Brite’s Oil & Gas (with 25%), Grupo Simples Oil, and Atlas Petroleum Exploration Worldwide (which own 20% each), as well as Omega Risk Solutions Angola (with 5%). This concession was awarded under the 2020 Bid.

If the drilling shows positive results, the consortium will then proceed with the survey of geological and geophysical data (G&G), with the aim of improving the mapping of the Block’s structures, without jeopardizing the preliminary development aimed at restarting production.

The resumption of exploration activities in Block KON11 represents an important milestone for the Angolan oil industry, as it is the effective reactivation of operations in an onshore block without activity since the 90s, namely in the adverse context of the current global economic situation.

US Minnow Claims “Unprecedented” Discovery in Egypt’s Western Desert

By Mohammed Jetutu, in Cairo

American junior IPR Energy Group has announced a new find in the Alamein/Yidma Concession in Egypt’s Western Desert, where it holds a 100% Working Interest.

The company describes it as a “major, unprecedented find”, even though it says it encountered only 27 feet of net pay in the Lower Kharita reservoir.

Admittedly, test results delivering an average production rate of 3,300Barrels of Oil Per Day (BOPD) at 36°API with less

than 1% BS&W on a ½ in. choke is huge for an oil well in Egypt, where reservoirs hardly do up to 1,000BOPD.

Alamein 48-K was drilled to a depth of 8,960 ft utilizing the IPR-1 750 HP Drilling Rig, while testing and completion was carried out with the IPR-2 350 HP Workover Unit at a total cost of $1.55Million.

The well will be completed with an Electrical Submersible Pup (ESP) and immediately put onstream through the existing Alamein/Yidma facilities.

“This well has unlocked major potential in the Lower Kharita formation, and we will work to delimit this prolific reservoir throughout the Development Lease parallel to implementing waterflooding plans”, said Mahmoud K. Dabbous, the operator’s Chairman & CEO.

IPR acquired Phillips Petroleum’s Egypt portfolio in 1993 and continues to be the Operator after 30 years.

IPR has produced over 34 million barrels of oil from Alamein/Yidma, and the lease is now producing over 6,500 BOPD, substantially raising IPR’s total output in Egypt from eight concessions. IPR is currently amending the Alamein/Yidma Concession Agreement, which will enhance the fiscal terms for IPR and promote aggressive future investments. Over the course of its time in Egypt, IPR has invested approximately $1 billion in the Egyptian Petroleum Sector.

“Texas headquartered IPR Energy Group is a consortium of multi-faceted companies across the globe that conducts onshore and offshore operated and non-operated exploration and production (E&P), as well as field services and integrated technology packages of engineering, geoscience studies, and enhanced oil recovery (EOR) field development. IPR is a Board Member of the U.S.-Egypt Business Council, which promotes commercial and political relations between the two countries in conjunction with the U.S. Chamber of Commerce and American Chamber of Commerce in Egypt”, the company says on its website.

ENI’s Alleged Duster in Mozambique is Just a Regular Day at Work

By Fred Akanni, Editor in Chief

So much has been read into the alleged failure of the Italian player, ENI, to make a discovery with the recently drilled well in Mozambique’s frontier Angoche basin.

“ENI’s Mozambican well failure spoils hope for East African oil find”, screams Zitamar News, one of Mozambique’s most authoritative online news sites.

ENI itself has not made any announcement about the status of Raia-1, the widely anticipated wildcat, located in concession Block A5-A in the Angoche basin, off the coast of Nampula province, since drilling ended in June 2023.

The allegedly poor result of Raia-1 “is clearly bad news for deepwater exploration in Mozambique”, Zitamar News quotes David Thomson, vice-president for sub-Saharan Africa at Welligence Energy Analytics.

All of this is hyperbole.

If there is anything to learn from hydrocarbon exploration history of Africa in the last 30 years, it is not to assume that a dry hole experience in any part of  a frontier basin is a definitive signal of absence of huge volumes of hydrocarbon, or for that matter, the likelihood of other companies cancelling their plans for drilling in the vicinity, as the Zitamar News story elaborately sets out to establish.

Neither the reported misgivings of officials of Wellingence Energy nor the frustrated comments of the bosses at Enervous, a market intelligence entity, says anything about the pre-drill geologic expectations of the well and what ENI may have missed.

None of the commentaries have indicated any knowledge of the petrophysical results of Raia-1, which are likely to have been shared with the state hydrocarbon firm ENH (Empresa Nacional de Hidrocarbonetos) and the regulatory agency INP (Instituto Nacional de Petróleo).

ENI operates Block A5-A with a 49.5% stake. Other equity holders include QatarEnergy, 25.5%; Sasol, 10% and ENH, 15%.


The Majestic Rig: Second Time Unlucky and Fatal

By Macson Obojemuinmoin, in Warri

The swamp barge Majestic, the drilling facility which capsized in the waters on the way to a drilling location on Tuesday, August 15, 2023, was unlucky for the second time in five years. This time it was fatal.

Majestic was engulfed in fire after it had just finished carrying out a re-completion on one of the wells on Conoil operated Ango field, located in Koluama, Southern Ijaw Local Government Area of Bayelsa state, on Saturday, May 26, 2018.

But unlike the recent accident, the fire did not take a life.

Last Tuesday, the rig, owned by Depthwize, had also just completed a well on the Gbetiokun field for the NEPL/Elcrest joint venture and was on its way to another drill site on the Seplat Energy operated Ovhor field, in Delta state, when it capsized, killing one of the 95 crew members and leaving three others unaccounted for.

“Of the other 92 crew members, 10 were admitted to hospital and stayed overnight”, Seplat said in a second press release in 48 hours. “We are pleased to say the 10 crew members have all now been discharged from hospital”.

Seplat’s Chief Executive Officer Roger Brown noted that the company “continues to support Depthwize with the emergency response and rescue efforts continue, with the priority being the search and rescue of the three missing crew members”. He added that “Depthwize has notified Seplat that the single recorded fatality was a British national. The families of the deceased and the 3 missing crew members have been informed by Depthwize”.

Garba Adamu, spokesperson for Nigerian Upstream Petroleum Regulatory Commission (NUPRC), told Africa Oil+Gas Report that the affected companies  have reported the incident andNUPRC will issue a statement accordingly”.

The Fire Last Time

The fire that engulfed the Majestic in 2018 burnt down significant parts of the rig, but did not affect the well. Major Abdullahi Ibrahim, spokesman of the Operation Delta Safe (ODS), an arm of the Joint Military Task Force in the Niger Delta, was quoted saying at the time that all personnel on board the rig were successfully evacuated.

The fire on the Majestic happened two years after an accident on an ExxonMobil pipeline which led to some curtailment in Depthwize’s operational activity. In mid May 2016, the Monarch another Depthwize owned rig, impacted the pipeline which pumped hydrocarbon fluids from Oso condensate and Usari oil fields to the ExxonMobil terminal at Qua Iboe. The damage on the pipeline was severe enough to cause a halt to a portion of ExxonMobil’s entire crude oil production. Depthwize’s insurance paid for the repairs on the pipeline, as it did to fix the burnt rig later.




Australian Junior Mobilises Rig for Second Well in Zimbabwe

Invictus Energy has commenced the mobilization of the land rig Exalo Rig 202 to Mukuyu-2, its second probe in Zimbabwe’s Cabora Bassa Basin.

The well is on track to spud in September 2023.

“The Mukuyu-2 well will be located approximately 6.8 kilometres north-east from Mukuyu-1 and over 400 metres updip at the primary Upper Angwa target, which provides the potential to prove up a material discovery upon success, Invictus says.

Mukuyu-2 will be a near vertical well with a planned total depth of approximately 3,700 metres, which will also enable Invictus to penetrate the untested Lower Angwa reservoirs in this location.

Mukuyu-2 is targeting a prominent horst block within the greater Mukuyu structural closure.

The primary target interval, the Triassic Upper Angwa Formation, sits approximately 400 metres shallower at Mukuyu-2 than at Mukuyu-1.

“This location will provide excellent information on the distribution and reservoir quality of Upper Angwa sands”, according to the interpretation of Invictus’ geoscientists.

“The Mukuyu-2 well trajectory is planned to be near vertical from the surface location (maximum inclination of 12°) to provide optimal penetration of several stratigraphic intervals within the same structural horst block, while minimising operational complexity for both drilling and formation evaluation activities. The well will also penetrate multiple additional targets including the Dande (JurassicCretaceous), Forest and Pebbly Arkose (both Triassic) Formations within the Mukuyu anticline in the central horst structure”.

“The preparation of the well services equipment to be followed by independent QAQC (Quality Assurance and Quality Control) ahead of mobilisation to the Mukuyu-2 wellsite is well underway and we remain on track to spud in September 2023”, the company explains.


At Last, NNPC Spuds the Nasarawa Well, Four Months After Elaborate “Kick Off” Ceremony

By Macson Obojemuinmoin

Nigeria’s state hydrocarbon company NNPC Ltd. has finally spud Ebenyi-A in Nasarawa State, four months after an elaborate ritual officially described as the “spudding event”.

The company is also frantically working to spud the Wadi-B in Borno state, tentatively by the second week of August, 2023.

NNPC Ltd. had staged two events on the drill sites of the two wells that gave the impression that drilling had commenced.

The spud date for Ebenyi-A, which means the date that the drilling actually began, was July 22, 2023, close to four months after the event at which former President Muhammadu Buhari “kicked off the exploratory drilling campaign”.

The one-trimester- of- a- year delay was largely due to logistical challenges thrown up by access to water required for drilling.

In effect, President Buhari’s widely reported “kicking off of the exploratory drilling campaign”, on March 28, 2023, was at best ceremonial, as it did not translate to actual spudding the well. The NNPC had described the ceremony as the spudding of the Ebenyi-A Well, the first in the Middle Benue Trough’.

NNPC’s press release reported at the time: “Speaking at the ‘spudding’ of the Ebenyi-A Well, President Muhammadu Buhari said the move was in line with the ongoing campaigns for the exploration of crude oil and gas in the nation’s frontier basins.

“The President listed the assets the nation intends to explore as those in the Chad Basin, Dahomey Basin, Anambra Platform, the Calabar Embankment, Sokoto Basin, Bida Basin, Benue Trough as well as the Ultra-Deepwater Niger Delta”.

Following similar, Presidential “kicking off” of Wadi-B well in Bornu State, NNPC was also presented with a technical disruption; heavy rains washed off the constructs of the drill site, such that the pre-drill infrastructure had to be re-installed.

NNPC Ltd has carried out extensive geological mapping and geochemical sampling, as well as stress field surveys in several basins in the north of the country in the last six years. Based on the results of these surveys, it acquires focused three dimensional (3D) seismic data, which is how it arrived at the specific drilling locations in Nasarawa.

“When we shoot 3Ds, we are prospect specific. It is not random”, NNPC insiders say. “If we make a find, we’d drill one or two appraisal wells and then offer the blocks up to the private sector for development”.

The proposed Wadi-B drilling is the latest incarnation of the Chad basin campaign, in Nigeria’s far northeast, which has been on and off for the past 40 years. As head of state in February 1985, Muhammadu Buhari, then a serving Military General, visited a site of the (then) Chad Basin drilling. At the time, 22 wells had been drilled, with only two of them indicating hydrocarbon shows. Wadi-1 was one of those with such evidence.

TGS-Petrodata Commences Large Multi-Client 3D Survey in the Vicinity of Agbami Field

TGS-Petrodata, having secured a Petroleum Exploration License (PEL) with support from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has commenced the Awele South 3D multi-client survey offshore Nigeria.

The ‘Awele South 3D 2023’ project will encompass approximately 5,900 square kilometres within the designated 56,000 square kilometers PEL area.

The project, supported by industry funding, is anticipated to span approximately 90 days, with completion planned in Fourth Quarter 2023.

Chevron’s pre-funding of the project with $28Million is a bet on Nigeria’s deepwater future, say spokesmen for TGS and Petrodata.

Some other international operators have indicated interest in acquiring the data after production, but they will not get the benefit of the discount that Chevron is getting for pre-funding.

“TGS-Petrodata has an extensive multi-client data library in Nigeria, including reprocessed 2D seismic and our regional multibeam and seafloor sampling study” says Will Ashby, Executive Vice President for the Eastern Hemisphere at TGS.  “We are delighted to expand our footprint with the Awele South 3D survey. Since this project was announced in March 2023, the TGS-Petrodata team has worked diligently alongside the NUPRC, NCDMB, COSL and other stakeholders to ensure successful commencement of the survey.

“As one of Africa’s largest and oldest hydrocarbon producers, unlocking this prospectivity and de-risking drilling operations will further bolster Nigeria’s energy production capacity. Having insight into the petroleum system of the Niger Delta basin will enhance our understanding of the country’s potential energy resources.”

Invictus Starts New Seismic Shoot in Zimbabwe’s Frontier Acreage

Australian minnow Invictus Energy reports that work is progressing according to plan on the Cabora Bassa two dimensional seismic acquisition 2023 (CB23 2D) programme being carried out by Polaris Natural Resource Development Ltd (Polaris) on its behalf.

Having also acquired Invictus’ earlier seismic survey in 2021 (CB21), “Polaris are well-placed to deliver safe and efficient operations”, Invictus explains.

A total of 425kilometres of lines have been successfully and safely cleared and the layout of receiver nodes is well underway. The first recorded data has been acquired and the survey is expected to be complete in mid-August 2023.

STRYDE wireless node layout ahead of data acquisition

The programme is a key part of the Company’s Phase 2 exploration campaign in the Cabora Bassa Basin, with the new seismic lines tying-in to existing legacy data, including Invictus’ 2021 survey. The data will provide a denser seismic grid over leads identified in the east of the basin and along the basin’s southern margin.

“This, along with data and insights from Mukuyu-1 and the upcoming Mukuyu-2 well, will be used to mature these leads as future drilling candidates”, Invictus affirms.

The CB23 Survey is utilising the latest generation STRYDE wireless nodes, which are less than 25% of the weight of comparable systems and makes the laying out and retrieving of the wireless nodes significantly easier, cheaper and substantially lowers the environmental footprint.

The survey work will include some dedicated testing of acquisition parameters that will allow for the optimization of a potential future 3D seismic survey in the basin.

2D seismic processing contract awarded to Earth Signal Processing Ltd

Meanwhile, the contract to process the data acquired in the CB23 programme has been awarded to Earth Signal Processing Ltd.

“Earth Signal processed the CB21 survey for Invictus and this prior experience will enable an efficient processing workflow and provide a seamless, high-quality dataset across the basin”.

© 2021 Festac News Press Ltd..