The Ivoirian government is prioritising upstream oil and gas exploration in offshore blocks, and adopting strict policies to limit speculative activity. According to the Ministry of Petroleum and Energy (Ministère du Pé trole et de l’Energie, MPE), at the end of the first half of 2012, total production of crude oil from the producing blocks of CI-11, CI-26, CI-27 and CI-40 was equal to 5.66m barrels, or an average of 31,286 barrels per day (bpd), a decrease of 9.03% from 6.22m over the same period in 2011. However, total gas production saw a 10.33% increase to 29.98 million British thermal units (MMBtu), up from 27.17 MMB tu. While the CI-11, CI-26 and CI-27 fields continue to see strong production levels, the CI-40 block, which contains the Baobab field and is operated by Canadian Natural Resources (CNR), has seen diminishing production. Subsequently, the share of natural gas production for the Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire (Petroci) fell by 5.44% to 16.83 MMB tu in the first six months of 2012 from 17.80 MMB tu over the same period in 2011. During this period, total oil and natural gas production had an approximate value of CFA352.62bn (€528.93m).
LEADING THE WAY: Foxtrot, majority-owned by French conglomerate Bouygues, plans to invest CFA500bn (€750m) to boost natural gas output from its CI-27 block, the country’s biggest-producing natural gas field, over a five-year period. The company secured a guarantee from the Multilateral Investment Guarantee Agency for up to €339m for an equity investment by SCDM Énergie that will help fund upgrades to the existing production platform in CI-27. The company is also seeking a partner to buy a 12% share of the gas field.
With proven reserves of 611bn cu ft, the Foxtrot field, located in the waters off Jacqueville, provides the majority of natural gas to the Azito, Vridi and Ciprel power plants. It has a current capacity of 110m-120m cu ft of natural gas per day, which is expected to rise to 140m cu ft starting in mid-2013, with a maximum output of 154m cu ft following the completion of the expansion project. The capital injection will also go toward funding the drilling of seven new wells by the end of 2014 and the building of a new production platform in the Marlin gas field in mid-2015. The Marlin gas field has an anticipated output of 7000 bpd. In April 2013, RAK Petroleum, an Emirati operator, acquired an indirect 8% interest in the CI-27 block through its takeover of the US group Mondoil Enterprises.
Afren, the AIM-listed Nigerian oil and gas company, has agreed to sell its 100% stake in the Lion Gas Plant and 47.96% stake in the CI-11 block to Petroci. With capacity of 75m cu ft per day, the plant processes gasoline and butane from natural gas from its CI-11 block and CNR’s CI-26 (60 km south-west of Abidjan) and CI-40 blocks (25 km offshore). As of 2012, the CI-11 block, which contains the Lion oil field and Panthere gas field and lies 13 km offshore, has a capacity of 4933 bpd of crude oil and 23.9m cu ft per day of natural gas. Afren still holds 65% interest in the CI-01 exploratory block, which contains the Kudu, Eland and Ibex yields, and sits to the eastern-most point of Ivoirian territorial waters; it has estimated reserves of 102bn cu ft of natural gas and 20m barrels of oil, respectively. Given that the block is located to the north-west of the Jubilee and Tweneboa oil and gas finds in Ghana, both of which have attracted the attention of international operators, it could hold considerable promise. With Petroci a development partner, Afren is currently taking steps to prepare a field development plan, which includes a seismic dataset.
Rialto, the Perth-based independent energy company, started an exploration programme for the 675-sq-km Hippo field in its CI-202 block, which sits 30 km south of Abidjan, after disappointing findings in the adjacent Gazelle field. The company has since suspended its exploration plans after signing an acquisition deal with oil trader Vitol. Per the deal terms, Vitol will acquire a 65% stake in the company’s Côte d’Ivoire assets for €38m, which will be used to fund exploration activities. Rialto and Vitol plan to undergo more technical assessment of the block’s prospects before drilling exploration wells. Afren has also stated that it would consider entering into a joint oil and gas development programme with Rialto for the CI-01 and CI-202 blocks, which would help meet the government’s goal of increasing natural gas supply for power generation.
CNR has also launched a drilling programme in the deepwater Baobab field. It has brought in a rig to drill development wells to boost flagging production from the field, which is 900-1300 metres deep.
OPPORTUNITIES: Given Ghana’s large oil and gas findings in the Jubilee field, Côte d’Ivoire’s exploration blocks bordering the maritime border with its western neighbour have drawn interest from a number of international oil companies. In October 2010, Total acquired a 60% stake in ultra-deep offshore exploration permits for CI-100 block (100 km south-east of Abidjan) from Ivoirian energy company Yams Petroleum. Per the deal terms, Total took over operating rights for the block, which is 1500-3100 metres deep, while Yam still holds a 25% interest and Petroci 15% in the asset. Total also owns stakes in exploration permits for three other ultra-deep blocks, CI-514, CI-515 and CI-516, which are located in western waters. In April 2013, Total made an initial discovery of 28 metres of net oil pay from its first Ivoire-1X exploration well in the western part of block CI-100 at a depth of 2280 metres, suggesting that the hydrocarbons-rich geological system of western Ghana’s bountiful Tano basin continues into Ivoirian waters.
PanAtlantic Exploration, a Russian-American group, and Russian major Lukoil made a discovery in deep offshore block CI-401, which is also located adjacent to the maritime border with Ghana and north of Total’s CI-100 block. The companies drilled a well at 1689 metres and found deposits of light oil. Lukoil also announced in 2013 plans to invest €310m in an exploration programme that includes drilling three wells. The Russian company is now undertaking exploration activities on five offshore blocks.
Tullow Oil’s findings in deepwater block CI-103 also suggests that rich oil deposits in western Ghana extend into Côte d’Ivoire, with discoveries of light oil in a Turonian fan system in the block. Tullow, which is also the operator, holds a 45% stake in the block, while Anadarko Petroleum holds a 40% interest and Petroci 15%.
Finally, the Directorate General of Hydrocarbons has recently announced a restricted tender for exploration of the CI-506 and CI-507 offshore blocks.
A LICENCE TO DRILL: Given its push to increase oil and gas supplies for the power sector, the government has ramped up pressure on companies to start exploration and development activities or risk losing their permits.
At present, the government uses production-sharing contracts for awarding blocks. The MPE has revoked eight permits from companies that have not started development work; the main criteria for revoking licences is lack of intent due to technical or financial capacity to engage in exploration activities. So far, the government has already signed production-sharing contracts for 26 out of 51 blocks. Eight drilling campaigns took place from April to December 2011.
Through signing production-sharing agreements, Petroci has also taken a more active role in the energy sector. As similar to many African state-owned energy firms, Petroci participates in oil and gas exploration activities by acquiring equity of up to 15% in permits. While crude oil output fell over the first half of 2012, Petroci’s share in production climbed on the back of production-sharing contracts.
According to the MPE, the former contributed some 36.67% of total production – or 2.08m barrels – as compared to 23.61% over the same period in 2011. The Ivoirian government’s earnings totalled about CFA98.27bn (€147.4m) from Petroci’s shares. While the firm conducts few drilling campaigns – just five between 2001 and 2011 – it provides access to sophisticated geological and seismic data to its partners.
Petroci’s acquisitions over 2012, including Afren’s natural gas assets and raising its stake in Rialto’s Gazelle field to 26%, is part of the company’s mandate to develop the energy sector and support the discovery of more oil and gas assets in collaboration with partners. Given profits of CFA43.9bn (€65.9m) in 2011, Petroci has the means to contribute to further exploration.
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