The good, the bad, the ugly

Africa Region

American Association of Petroleum Geologists (AAPG)
James K. Agbenorto
James K. Agbenorto

Q: In entering a new year, and in terms of the profession and industry, how would you describe the “state” of your Region?

A: The importance of the Africa Region as a useful source of energy for the United States and Western Europe has grown considerably over the past couple of years, largely because of:

  • Increased turmoil in the Middle East.
  • Ascendency of nationalist governments in Central and Southern America.

Furthermore, the impact of the rapid economic growth of “Asian giants” China and India is such that African oil supplies now face increased demand to fuel this growth and, therefore, increased E&P activity. China, for instance, has indicated great interest in West African oil resources, and it recently became Africa’s second-biggest trading partner behind the United States.

Such activity/dynamism has called for continued transfer of technology into the Region and for greater involvement and expertise of African geoscientists and engineers from around the world to explore for and exploit “home-based” hydrocarbon resources and reserves.

It is of note that of the 12 countries that make up the OPEC cartel, a third of them (Algeria, Angola, Libya, Nigeria) are African. A fifth country, Gabon, also had been a cartel member until its withdrawal in 1994.

Q: How would you describe exploration throughout your Region over the past year? For example, was it healthy? Robust? Troubled? Promising?

A: E&P activity in the Africa Region over the past year may be described generally as robust and promising, even though different locations have seen evidences of all four attributes in diverse dimensions – healthy, robust, troubled and (positively!) promising. In various locations of the Region over the past year, seismic surveys have been under way and drilling rigs were being relocated to the area.

In West Africa, the Gulf of Guinea has become one of the world’s most important targets for deepwater E&P. After years of political upheaval and brutal civil wars – particularly in Liberia, Sierra Leone and Côte d’Ivoire – the sub-Region has begun to experience a more positive environment for oil and gas development.

The recent discovery of Ghana’s giant Jubilee Field, coupled with U.S. President Obama’s new African foreign policy, has helped to make West Africa a desirable destination for oil and gas E&P.

“Ghana will begin pumping crude oil next year and expects to begin producing about 500,000 bopd by 2014. The recently sanctioned Jubilee project, with resources of around 1.2 billion boe and valued at $15 billion, will put Ghana on the road to becoming a significant new oil province”, quotes the September 2009 issue of World Oil.

This past December marked the 10th anniversary of deepwater oil production in Angola. Since oil started flowing from Chevron’s Kuito field in late 1999, deepwater production there has grown to ~1.5 MMBPD, eclipsing deepwater output from the U.S. Gulf of Mexico and Nigeria, and sitting in second place after Brazil in the global DW oil rankings. This situation is likely to remain through continuing interest and investment in Angola. Angola has 12 major DW projects exploiting 35 fields that initially contained 6.5 BBO. Angola is the second-largest oil producer in sub-Saharan Africa after Nigeria.

Over the past year, visiting Russian President Dmitry Medvedev discussed various areas of investment and technical cooperation with Nigeria. Moscow suggested investing up to $2.5 billion in Nigeria’s energy sector as it tries to catch up with China in gaining a share of Africa’s natural resources. Russia’s Gazprom has also been keen to get involved in the Trans-Saharan Pipeline aimed at bringing Nigerian gas to Europe. According to World Oil, “Chevron is investing $3 billion a year in existing and new oil and gas projects in Nigeria. ExxonMobil has plans to invest $60 billion in Nigeria over the next several years.”

The only apparent hindrances to these plans are the higher royalty and tax clauses in the proposed energy reform bill, and the continued offshore attacks and pipeline sabotage by militant groups. According to Shell E&P Africa VP, Markus Droll, security has been Shell’s biggest problem in Nigeria.

He said Bonny and Port Harcourt developments east of the Niger Delta were producing less than 150,000 bpd when they could have been producing in excess of 800,000 bpd.

Several discoveries were made over the past year in North Africa, including:

  • Libya
    • Sonatrach International Petroleum Exploration & Production Corp. (Sipex) made a discovery with wildcat A1-65/02 on Block A1-65 Area 65. It tested 1,344 bopd (48.8° API) and 1.88 MMcfd from Ordovician Mamouniyat sandstone reservoirs.
    • Repsol and partner OMV made a discovery with A1-NC202 well in the offshore Sirte Basin. It flowed 1,264 bopd and 0.6 MMcfd from Dernah (Eocene) reservoirs.
    • Tatneft made an oil discovery with A1-82/04 well on Area 82 in the onshore Ghadames Basin. The well tested 400 bopd from Ouan Kasa reservoirs.
    • NOC subsidiary Arabian Gulf Oil Company made a discovery with B1-NC4 well, also in the Ghadames Basin. The well tested 4,012 bopd and 1.36 MMcfgd from Lower Akakus reservoirs, and 600 bopd and 4.8 MMcfgd from the Mamouniyat interval.
  • Algeria
    • Repsol made a gas discovery with TGFO-1 well on the M’Sari Akabli Block in the onshore Ahnet Basin. The well flowed 12.8 MMcfd from Emsian (Devonian) reservoirs.
    • The PetroChina unit of CNPC also made an oil discovery in the desert Oued Mya Basin, Block 438B.
  • Egypt
    • Apache Corporation’s Phiops-5 appraisal well tested 8,279 bopd and 0.4 MMcfd from Cretaceous Alam El Buieb and Jurassic Safa reservoirs on the South Umbarka Concession, Western Desert. Phiops is among five fields discovered by Apache in the area.
    • Onshore, Dana Gas tested Abu Madi reservoirs with its Tulip-1 well. Flowrates of 11.4 MMcfd and 381bcpd were achieved.
    • Still onshore, Vegas Oil & Gas tested 2,809 bopd (oil) and 3.04 MMcfd (gas) from Kareem Shagar Sandstone reservoirs in Geyad-1X well on the North West Gemsa Concession. In addition, 1,174 bopd and 1.3 MMcfd test rates were achieved in Lower Kareem Rahmi reservoirs. Furthermore, the Al-Amir SE-3 appraisal well tested 2,395 bopd and 2.2 MMcfd from Kareem Shagar reservoirs in the North West Gemsa Concession.
  • Morocco
    • Repsol-YPF discovered gas with Anchois-1 well on the offshore Tanger-Larache license block. Recoverable reserves of about 100 Bcf from 427 feet of combined pay from two sandstone reservoir intervals have been estimated.
    • Onshore, Circle Oil made a discovery with CGD-10 well on the Sebou Block in the Rharb Basin. The well tested 3.9 MMcfd from Lower Guebbas reservoirs from 2,917 to 2,943 feet.
  • Sudan
    • Petronas and Sudan National Petroleum Corp. (Sudapet) made a gas discovery with their Hosan and Tawakul wells on Block 8. Reserves for the wells are about 123 Bcfg, although the block may contain as much as 16-20 Tcf.

Activity for East and Southern Africa include:

  • Uganda – Tullow Oil made an oil discovery with Ngara-1 well in the Albert Basin in the Butiaba region. The well, located two miles south of the company’s Ngege-1 discovery, found eight meters of net oil pay. Tullow also encountered seven meters of oil pay in a 14-meter gross sand in its Ngassa-2 exploration well, located in the Kaiso-Tonya region. Ngassa has the potential to be the largest oil field in the basin to date. The Ngara-1, Ngassa-2 and other discoveries made in Uganda will form part of Tullow’s detailed basin development plan.
  • Kenya – China National Offshore Oil Corporation (CNOOC) commenced drilling its initial exploration well in northern Kenya on Block 9. The Boghal-1 well, in the Anza Basin, will be the deepest well yet drilled in Kenya and is expected to reach a TD of 18,229 feet and will penetrate two possible hydrocarbon horizons at 9,843 and 16,400 feet.
  • Mozambique – Anadarko Petroleum began drilling its Mecupa-1 well on the Rovuma Block onshore. The well is located in south of Mnazi Bay Field that contains 1 Tcfg in Oligocene reservoirs.
  • Madagascar – Sunpec subsidiary Madagascar Energy International made an oil discovery onshore with the SKL-2 well in Block 3113. Thirty-one oil-bearing zones with a total thickness of 279 feet at depths between 10,780 and 11,890 feet were reported.
  • Namibia – Sintezneftegaz Namibia discovered gas with its Kunene-1 well in the offshore Namibe Basin. Reserves are estimated at 14 Tcf.

Q: What are the hottest areas of exploration in your Region? Do you see continued activity there?

A: Hitherto, the hot spots had been only in the West and North Africa (particularly Nigeria, Angola, Equatorial Guinea, Algeria, Libya, Egypt, Sudan and Morocco). Today, with major discoveries in these and other previously unknown areas, attention is spreading also to East Africa (e.g. Tullow Oil’s finds in Uganda) and to South Africa, where Royal Dutch Shell in 2009 picked up an offshore deepwater exploration license in the Orange Basin, followed by a Technical Cooperation Study agreement for the onshore Karoo Basin.

Of great significance in these emerging oil provinces of Africa are the contributions of deepwater play fairway systems in West Africa – such as in Nigeria (e.g. the giant Bonga, Agbami, Erha, N’nwa); Angola (e.g. Girassol, Kizomba, Dalia); Congo (e.g. Moho, N’Kossa); Equatorial Guinea (La Ceiba, Zafiro); and lately in Ghana (the giant Jubilee field).

I expect to see increased E&P activity throughout the emerging oil provinces of Africa from 2010 on. Such activity will gradually follow the pattern of countries mentioned above – but many new players will emerge over time and – with good resource management practices – even outstrip E&P outputs of the older “pioneers” by taking advantage of mistakes committed by the latter.

Q: What might be the hot exploration areas to watch in 2010?

A: Those areas south of the Sahara would be Nigeria, Angola, Equatorial Guinea, Chad, Congo Brazzaville, Gabon, Ghana, Cote d’Ivoire, Mali, Cameroon, Sao Tome & Principe, Liberia, Sierra Leone, Namibia, Uganda, Mozambique and Madagascar.

In northern Africa, the areas would be Algeria, Libya, Egypt, Sudan and Morocco.

Q: What are the biggest challenges facing the profession and the industry in your Region in 2010?

A: Five big ones:

  • The global credit crunch – a threat to availability of indispensable investment capital for E&P projects.
  • Unstable world oil prices and their impacts on developing economies in Africa.
  • Civil unrests and political upheavals.
  • Socio-economic effects of global warming and climate change.
  • Implementation of plans and programs to boost geosciences training opportunities in the AAPG Africa Region – e.g. AAPG short courses, field trips/geological tours/excursions, Distinguished Lectures, Visiting Geoscientists programs, etc.

Q: What developments do you anticipate happening there in 2010?

A: Africa currently offers “unparalleled opportunities” for both majors and independents.

The year 2010 promises a lot of activity and dynamism for the continent of Africa in terms of oil and gas – O&G – exploration and production.

Oil production in Africa is expected to climb rapidly during the next 10 years. While the United States and Europe still have eyes focused on Africa, competitor China has also indicated great interest in West African oil resources, and it recently became Africa’s second-biggest trading partner behind the United States.

The upside for increased E&P activity in Africa will be that an upsurge in oil prices will create an inflow of petrol dollars into the economies of oil producing states. This will lead to increased competition to attract investment capital into those countries, with hitherto frontier ones upgrading to green and promising destinations.

Q: What are some things that you’d like to see happen in 2010 that would directly help both the industry and the profession in your Region?

A: First, on the AAPG Front:

  • Achieving a desirable level of AAPG strategic transformation within the tenets of the Global Corporate Structure – GCS. The functional objective is to enable AAPG achieve its overarching goal of being “indispensible to all professionals in the energy-related geosciences worldwide” through:
    • Advancing geoscience knowledge and practice.
    • Continuous professional development.
    • Public awareness and understanding.
    • Membership and member services.
    • Financial strength.
    • Effective global presence.
  • Concluding the AAPG Regions MOU – blueprint for working relationships and responsibilities among AAPG HQ and global leadership, AAPG Regions as well as AAPG members, volunteers and other professional staff.
  • Improvement of communications infra-structure for effective networking and collaboration amongst Region leadership, all members, Affiliated societies, Student Chapters and key industry players in the Region.
  • Achievement of a tremendous leap in AAPG Active member numbers in the Africa Region, with preferably reasonable geographical distribution across the continent.
  • Greater collaboration amongst Industry (international and national oil companies – IOCs and NOCs, other industry players) Academia and AAPG Africa Region.
  • Increases in numbers of Affiliated Societies (to the AAPG Africa Region) and of active/dynamic Student Chapters. Vibrant activities and programs in these Societies/Chapters backed up by strong and dedicated memberships.

In general industry terms:

  • Sustained industry successes in existing key exploration, development and production project locations on the continent.
  • Increased and more dynamic activity in especially frontier locations of petroleum E&P leading to high success ratios.
  • Consistency in innovation and in knowledge sharing amongst industry practitioners.
  • Discoveries of more giant fields on- and offshore in more sub-regions of the continent as basis for greater economic growth.
  • Systematic and sustained professional growth and development of all Africa-based geoscientists.
  • Greater regional balance in professional and academic programs involving petroleum science in Africa.
  • Increased avenues for growth and advancement of the younger core of African petroleum experts, who are capable of laying strong foundations to develop the economies of African states and thus make the continent the preferred choice to practice careers.

General Acknowledgements:

  • World Oil magazine
  • Offshore magazine
  • Hart’s E&P magazine
  • Tullow Oil plc site
  • Petroleum Africa News
  • site and with statistics from the US Energy Agency, 2005

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The Africa Region Web site was recently launched and should become a good resource for the region's activities and developments.

The Africa Region Web site was recently launched and should become a good resource for the region's activities and developments.

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