All posts tagged Oil Patch Sub-Sahara


Savannah Slashes Planned Gas Drilling from Four Wells to One

By Macson Obojemiemoin

…British company annuls $53Million of planned expenditure on three wells and redirects money to gas supply optimisation

Savannah Energy has reported drastic changes in its planned principal work programme in the 2020-23 period. Those changes involve significant reduction in drill bit activity and acceleration of work on the midstream segment of the company’s natural gas production and supply business in Nigeria.

“The changes will see only one gas well drilled on the Uquo field, (as opposed to four assumed previously)”, the company says in a report.

Savannah will however accelerate the Uquo field compression project, previously assumed to commence in 2026/27, to 2021/22.

The change in drilling plans results from the company’s amendment of its planned four-year capital expenditure programme in Nigeria, as originally set out in the Nigeria Competent Person’s Report (the “Nigeria CPR”) published December 2019.

“The Company now expects to reduce its Nigerian capital expenditures by 15% over the 2020-23 period from approximately $118Million to S$100Million”, Savannah explains. “This has resulted in a reduction in the overall indicative Group capital expenditure plans of around 13% from $137Million to $119Million over the same period”.

Savannah explains in a spreadsheet that it will be spending $45Million between 2021 and 2022 on the Uquo field compression project, a project that was not in the previous plan. Conversely, it will be annulling the planned spend of up to $53Million between 2021 and 2023, a programme that was the most prominent in the previous plan.

These changes, Savannah, argues, follow “the completion of the relevant technical and commercial studies”.

Savannah assures that “the Uquo reservoir continues to perform in line with expectations and that the proposed change in the capital expenditure profile is not expected to impact Uquo field production or expected ultimate reserve recovery”. The amendments, it contends, “enhance the project economics of the ongoing Uquo field development”.

 

 


Adom-Frimpong is new Chairman of Ghana’s Oil Revenue Watchdog

Ghana’s Public Interest and Accountability Committee (PIAC), the statutory body with oversight responsibility of the management and use of the country’s petroleum revenues, has elected Kwame Adom-Frimpong as its new chairman.

Mr. Adom-Frimpong, a professor of accounting who represents the Institute of Chartered Accountants, Ghana (ICAG) on the PIAC, was elected in a unanimous decision by the Committee, drawn from 13 nominating institutions, according to a statement by the PIAC communications department. He will steer the affairs of PIAC as Chairman for one year, having taken over from Noble Wadzah, whose membership tenure on the Committee expired at the end of last year.

Adom-Frimpong is a graduate of the University of Wales, Bangor, UK (MBA) and the University of London. He obtained his Doctorate degree in Business Administration (DBA-Finance option) in 2001 from University for Professional Studies, Arcadia, USA and again had PhD in Economics Finance from the same University in 2004.

He is currently the Managing Director of Mainstream Reinsurance Company and a Partner of Adom Boafo & Associates, a firm of Chartered Accountants and Management Consultants. He worked with PricewaterhouseCoopers for five years as Audit Supervisor, five years with SSNIT as Head of Audit and ABC Brewery Company as Senior Cost and Management Accountant for four years.

Adom-Frimpong qualified as a Chartered Accountant in 1990, and is the immediate past President of the Institute of Chartered of Accountants Ghana (ICAG). He is a Fellow of both the Chartered Institute of Bankers (FCIB) and the Chartered Insurance Institute of Ghana (FCIIG). He is also a Barrister-at-Law and a member of the Ghana Bar Association.

 


ENI Discovers Oil and Hooks It Up Quickly in Egypt’s Western Desert

 

By Toyin Akinosho

ENI announced a relatively small new oil discovery in Egypt and hooked it up within a month.

The discovery, in the Meleiha Concession in Egypt’s Western Desert, was achieved through the Arcadia- 9 well, drilled on the Arcadia South structure, which is located 1.5km south of the main Arcadia field already in production.

Arcadia -9 encountered 85 feet of oil column in the Cretaceous sandstones of the Alam El Bueib 3G formation. The well was drilled close to existing production facilities and is already tied-in to production, with a stabilized rate of 5,500 barrels of oil per day.

Following the discovery, two development wells, Arcadia 10 and Arcadia 11, have been drilled back-to-back, the Italian major says in a statement. The first one encountered 25 feet of oil column and the second one 80 feet, within the Alam El Bueib 3G formation. The three wells share the same oil-water contact in the discovered reservoir. Arcadia 11 also encountered 20 feet of oil pay in the overlying Alam El Bueib 3D formation.

“The new discovery adds 10,000 barrels of oil per day to ENI’s gross production in the Western Desert of Egypt”, the company explains.

ENI’s successful implementation of its infrastructure-led exploration strategy in the Western Desert through AGIBA, a joint venture between Eni and Egyptian General Petroleum Corporation (EGPC), allows a quick valorization of these new resources. 

ENI, through its subsidiary IEOC, holds a 38% interest in the Meleiha concession while Lukoil holds a 12% and EGPC a 50% interest.


Sonatrach’s 50% Budget Slash, Cuts Out Sixty Planned Wells in Algeria

Algerian state hydrocarbon company Sonatrach is spending half of its originally planned budget for 2020.

Africa’s largest NOC was ordered to reduce its budget for 2020 from $14 Billion to $7 Billion(or from €12.4Billion to €6.2Billion).

The group, which contributes nearly 60% of the state budget and more than 95% of the country’s foreign exchange earnings, has significantly reduced its drilling and field optimization activities and suspended plans for newfield developments, no matter how close to existing facility. Africa Oil+Gas Report sources say that over 60 planned new wells will be affected.

There were 50 active rigs in Algeria in 2018, but they dropped to 42 in 2019. They would have dropped to 32, with COVID-19 challenges, but now they are likely to slip to 29, Africa Oil+Gas Report research suggests.

Hydrocarbon revenues into Algeria crashed by nearly 30% in the first quarter 2020, compared to last year.

Unlike most other hydrocarbon-led economies in Africa (Nigeria Angola, Libya, etc), most of the work programme in Algeria is performed by Sonatrach, as a result of historic production agreements that always insisted that Sonatrach operate the acreages.

So, unlike its peer countries, the state cannot spread the burden of financing oil and gas field operations in this time of pandemic, in a way that international companies have a good share of the risk.

Algeria, last year approved laws to encourage increased equity stakes and participation in acreages and projects by E&P companies, but the lingering antigovernment protests have discouraged implementation.

This article was originally published in the June 2020 edition of the Africa Oil+Gas Report


Advertiser’s Announcement: OILSERV Ltd Commences Massive AKK Pipeline Project

Nigeria is finally on the verge of unlocking huge economic benefits arising from its natural gas endowment. For many years, the country had been hindered by absence of gas transmission pipelines in her bid to harness its abundant gas reserves for provision of gas to generate electricity, and stimulate rapid industrialization using gas as feedstock for fertilisers, ammonia and other petrochemical applications.

The commencement of the NNPC-sponsored Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline project by leading indigenous EPC giant – OILSERV Limited is the cause for this renewed optimism. OILSERV has been awarded the engineering, procurement, construction, installation, testing, and commissioning of the first segment of the 614 km x 40-Inch Gas pipeline, which is from Ajaokuta to mid-way between Abuja and Kaduna. The second segment has been awarded to another company.

Information available to us shows that OILSERV has achieved significant progress in a short spate of time including ongoing detailed engineering design, topographical and geotechnical surveys, haulage and stacking of line pipes in preparation to commence construction activities.

In the words of the Group Managing Director of NNPC; Melle Kolo Kyari “the AKK project is key to resolving the power deficit challenge of the country. Its multiplier effect on the economy and provisions of jobs will be unprecedented. NNPC will give all necessary support to the Contractors to enable them deliver the project within time and within budget”.

Chairman of OILSERV Ltd, Engr. Emeka Okwuosa, gave a pledge that OILSERV will leave no stone unturned to partner with NNPC and make the dreams of 200million Nigerians come true by delivering the AKK project to global quality and standards. In his words, “The capability of OILSERV has been honed in the course of successful delivery of landmark EPC contracts such as lot B of the 48inch OB3 gas pipeline system that is currently being commissioned”.

The optimism and hope that this development represents is a clear elixir that is surely needed by the entire nation at this time. We wish OILSERV, NNPC and everyone else involved in this endeavor, success.


Hydraulic Workover Rig Catches Fire on Ororo Well

By Toyin Akinosho

A Hydraulic workover rig Grace-1 HWU, working for the Nigerian independent Guarantee Petroleum, burst into flames over the weekend in the course of re-entry operations on the Ororo-1 well in shallow water Oil Mining Lease (OML) 95.

The incident was the culmination of a well control situation that had been shaping up since mid -April.

Field data indicate that, in late April, technicians had put the well under control after it had released fluid to surface through malfunctioned Blow Out Preventer (BOP) on the rig, owned by Joeny Holdings Limited. “Well is stable and gas leak at the same level as at when BOP was closed-in.  No increase in gas flow”, the report indicated as of April 22, 2020.

But by May 15, the wellhead had caught fire.

“All the personnel had been successfully evacuated off the 300 Series SEWOP (Self Elevating Work-Over Platform)”, reported Guarantee Petroleum, operator of the Ororo field. But the Platform itself had not been moved from the site.

The company had written the Department of Petroleum Resources (DPR), the industry regulatory agency, since April 23rd, requesting for approval to carry out the needed containment of the flow of gas and fluid droplets from the wellhead. Guarantee claims that the regulator did not dignify it with a response.

DPR spokespersons dd not have any comments on the matter.

Guarantee’s licence to Ororo field had been revoked by the Nigerian government, through the DPR, on April 7, 2020, but the company was deep in the middle of the re-entry operations when the letter came.

DPR’s refusal to respond, in the last month, to Guarantee Petroleum’s correspondences, may have to do with the regulator’s consideration that the company no longer had a right to the field. But that itself throws up a question: How can you revoke a licence right in the middle of operations you have yourself approved? See related story.

On May 15, after the fire incident started, Guarantee Petroleum sought DPR’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”.

It also said it contacted Chevron Nigeria and Halliburton (the American oil service provider) for help. Chevron, an E&P major, is the operator of OML 95, the acreage from which Ororo field was ringfenced.

Esimaje Brikinn, Chevron’s General Manager, Public Affairs  explained to Africa Oil+Gas Report that  “the affected facility is a third-party facility and it is not operated by Chevron Nigeria Limited (CNL) or any of its affiliates”. He added that the company was “prepared to provide necessary emergency response assistance in accordance with petroleum industry emergency response protocol, to help address the situation, if required. CNL remains committed to safety of the people and the environment. CNL will continue working with relevant regulatory agencies and other stakeholders on protection of the environment”.

Grace-1 HWU had been on the well since October 2019.

 


Namibia Records A Second Duster in Weeks

Chariot Oil and Gas , a London listed minnow, announced the deployment of the Ocean Rig Poseidon to spud the Prospect S well in the Central Blocks licence offshore Namibia, less than a week after Tullow Oil  went to town with the results of Cormorant-1 as a dry hole.

12 days later, the probe was announced a duster.
The well had been safely drilled to a total measured depth (MD) of 4,165 m to test the stacked targets in Prospect S. It penetrated the anticipated turbidite reservoir sands, in line with the pre-drill prognosis, however the reservoirs were water-bearing. “The data collected will be used to calibrate the existing data sets to understand the implications of the well results on the prospectivity of the surrounding area.”
The operator was in the process of plugging and abandoning the well as we went to press in early October 2018.

The structure on which the Prospect S was drilled is one of five dip-closed structural traps, totalling 1,758MMBbls gross mean prospective resources, which have been identified in the Upper Cretaceous turbidite clastic play fairway. The company had talked of a probability of geologic success of 29%, citing a Competent Persons Report by Netherland Sewell Associated Inc.

“A further two higher risk-reward, stratigraphic traps, totalling 885MMBbls gross mean prospective resources”,  was to have been de-risked through the calibration of the 6,100km2 of proprietary 3D seismic data on the Central Blocks with the result of the Prospect S well. All that did not happen.

Chariot operates the Central Blocks with 65%. Partners include Azinam 20%, NAMCOR 10% and Ignitus 5%.

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Starfish Smells Like A Duster

Starfish Smells Like A Duster

By Toyin Akinosho

The latest wildcat well being drilled offshore Ghana is looking like a dud. “Initial interpretation of the wireline logs and MDT data is that no movable hydrocarbons have been encountered in the well, based on the current data”, reports Rialto Energy, the Austrailian minnow which has 12.5% stake in the Offshore Accra Contract Area. “The forward plan is to complete wireline logging operations and evaluation of the well data and block prospectivity. The well will be plugged and abandoned as programmed”.

The Starfish prospect is located offshore Ghana along the prolific offshore West African Margin. The partners regard it as a large, deep-water prospect, “analogous to the Jubilee discovery with unrisked prospective resources estimated to be in the range of half a billion barrels (431 MMbbls (p50); 665 MMbbls (pmean))”.In buying its stake of the Offshore Accra Contract area in December 2012, Rialto Energy was expected to pay around $3 million, and provide a bank guarantee in respect of its participating interest share of the approved work programme and budget for the current exploration period.The company’s share of the well cost is expected to be $10Million. “The prospect was matured following reprocessing of the original 3D seismic data and the acquisition of the new 3D survey in 2011 over the outboard deep water area”, Rialto says in the release. Starfish-1 was drilled to a final total depth of 4,380 metres. Wireline logging operations were undertaken to evaluate the hydrocarbon potential of the primary target. The Offshore Accra Contract Area is operated by Ophir Energy, the Australian independent, with 20%. Other partners include Afex, also with  20%, and Vitol (30%). Tap Oil, which won the lase, holds 17.5%.


The Niger Delta Is Not A Mature Basin-Omatsola

By Toyin Akinosho

People often say that the Niger Delta basin is a mature basin, an oil rich province in the waning days of its productive life. Ebi Omatsola disagrees. “The Niger Delta is a mid- life basin”, he argues.

EBI OMATSOLA

EBI OMATSOLA

“Only 2% of Niger Delta wells have reached deeper than 15,000feet(4572metres) Total Depth”, laments Omatsola, managing director of Conoil Producing, the Nigerian independent. “70% of the wells in the basin have not gone deeper than 9,000feet(2743metres) True Vertical Depth. This is something like scratching the surface”, he told a monthly technical meeting of the Petroleum Club recently. Operators, he said, are afraid of taking risks. “Once we run into a shale sequence which gives us a heart attack, we run away”, he told the club, an assembly of owners as well as  ranking managers of E&P companies.

“Rent A Depth”

Omatsola says that policies should be introduced that allow government let companies rent a depth. “If you are holding on to an acreage and you can’t go deeper than a certain depth,can I take it over?”, he asked. “So long as I can show that I can, I should be offered the deeper parts of the acreage below which you can’t go and I should have obligations to drill a certain number of wells, for a certain number of years, before I give it up”. He said that companies “keep talking about incentives”, to do what should ordinarily be in their own interest.

The Niger Delta basin has 37Billion (proven) barrels of oil left, after 47Billion have been produced in 55 years, but oil companies can still find more than twice these remaining reserves, if only they can breach their comfort zones and drill deeper.

There have been several, sporadic attempts in the past. In the mid- 90s, Shell attempted a deep drilling campaign, with mixed results. A decade after, ExxonMobil and TOTAL jointly  spud  a well, targeted to drill deeper than 15,000feet, but pressure problems forced them to stop, even though they were using a High Temperature, High Pressure rig.

As I write this, Agip is drilling a deep well, Ogbainbiri Deep, to appraise and develop the deep sands earlier encountered in Ogbaibiri 2, which is currently producing at shallower depths.

“You’d never find new oil if you’re stuck with the same idea”, warned Omatsola, a 71 year old former Chief Geologist at Shell Nigeria. “Here’s a basin that has productive zones as deep as 20,000feet(6,096 metres),” and that doesn’t have to reach “the lower part of the Agbada(the oil prone, sandy shale sequence in the basin) or Akata, (the massive shale, high pressure sequence)”.

He should know. Conoil, which he heads, is currently drilling a well, Ango-2, with targets at deeper than 16,000feet(4,877 metres) for commercial sized oil pool. Earlier in the year, Conoil flowed 4,000BOPD of light (340 API)oil in two reservoirs inAngo 1Stk 3, in Oil Mining Lease(OML) 59, at depths  between 15,400ft and 15,550ft True Vertical Depth (TVD). “The reservoirs are ponded against a shale ridge”, Omatsola says of the play concept. “It’s the deepest productive zone in the Niger Delta”.

The word ‘productive’ is instructive. Agip has a number of wells that have reached deeper than 16,000feet, but are not producing.

The Ango 1Stk 3 results have provided Omatsola more ammunition to campaign for deep drilling in the Niger Delta. Showing a number of slides of seismic lines indicating strong seismic events at great depths (around 6secs),he told the Petroleum Club that “the Coastal Swamp belt is the most productive depobelt” of the five extensional depobeltsin the onshore terrain of the Niger Delta. “Here, there’s 16,000 feet of untested sequence”.

Omatsola admitted that there were challenges to overcome, in getting everyone on board his “go-deeper” campaign. “You must understand basin modeling”, he told his audience. For this “the geoscientist (geologist and geophysicist) is the key”.

Companies need to embark more on High Resolution deep seismic imaging, which pictures the subsurface clearly as deep as eight (8)seconds (seismic time), equivalent to about 23,000feet(7,010metres)-after time depth conversion.

“We must close the skill gap in the industry and have earth scientists who can tell Schlumberger what they want and not just receive what Schlumberger claims it has to offer”.

And then the industry has to have the tools of deep drilling. “There are only three rigs in the country with the capacity and two of them are owned by Depthsize”. The rigs he was talking about, he said, “must have depth capacity of up to 35,000feet(10,668metres), rated to at least 15,000psi (pounds per square inch) choke/kill/ manifold pressure. Such rigs must be over 3,000HP (Horse Power), absolutely” .

Nigeria, he concluded, must be ready to tap into and develop the potential upside of the Niger Delta Basin.


Africa’s 2012 Hydrocarbon Finds

  • Cobalt reported that its Came iapre salt oil discovery in Block 21,offshore Angola, flowed at an unstimulated, sustained rate of 5,010 barrels per day.
  • Statoil described its Zafarani discovery in Block 2 offshore Tanzania a “high impact

discovery” with as much as 5 Tcf of gasin place. ExxonMobil is a partner in the well.

March

Offshore Nigeria, Afren and Amni tested a light oil discovery on OML

112. Afren claimed that future horizontal wells at its Okoro East oil discovery, offshore

South east Nigeria, should yield 4,500-7,000barrels of oil per day per well.

 May

  • Onshore Kenya, Tullow Oil’sNgamia-1 well found more than 328 feetof oil pay over a gross oil-bearing intervalof 2,130 feet in multiple zones.
  • Anadarko Petroleum added seven to 20-plus Tcf of recoverable gas offshore Mozambique at an explorationstrike about 30km northwest of its Prosperidade complex.
  • In an exploratory well on the Ebok North Fault Block offshore south east Nigeria, Afren and Oriental Energy Resources identified 370 feet true verticalthickness of net oil pay in what Afren described as  “excellent quality reservoir sands.”
  • BG Group reported a fifth gasdiscovery offshore Tanzania with the Mzia-1exploratory well on Block 1 – a first successin the deeper Cretaceous section.
  • Agiba, a joint operating company, operated the Emry Deep 1X well about 288km southwest of Alexandria in Egypt,which encountered 250 feet of net pay in multiplesandstones of the Lower Cretaceous Alam El Bueib Formation and flowed 3,500barrels/day during testing.
  • Offshore Mozambique, an AnadarkoPetroleum partnership hit more than 300 netfeet of natural gas pay in two high-qualityOligocene fan systems with the Atum discovery well in Offshore Area 1 in theRovuma basin.

June

Tullow Oil’s Paon-1X deepwater exploration well, a light oil discovery in a Turonian fan system in the CI-103 licenseoffshore Cote d’Ivoire, extended a provenoil play westward from previous discoveriesoffshore Ghana.

July

In Offshore Area 4, Mozambique, ENI’sMamba North East-2 giant gas discoveryencountered more than 650 feet of payin stacked, multiple, high-quality zones,adding at least 10 Tcf to the play’s potential. The Papa-1 deepwater wildcat on Block 3 offshore Tanzania became the first

Cretaceous gas discovery outboard of the Rufiji Delta, according to partners Ophir Energy and BG.

November

  • Tullow Oil said Twiga South-1 in Block13T, onshore Kenya, found 98 feet of net oilpay with further potential to be assessed.
  • The Mamba South 2 and Coral 2delineation wells in Area 4, Mozambique, added about six Tcf potential in the Mamba complex for ENI and partners.

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