Gabon is banking on its deepwater resources to achieve its ambitious target of doubling oil production to 500,000 barrels per day (bpd) by 2025. The discoveries since mid-2013 by Total, Shell and Eni in its pre-salt formations and those by its neighbours in the Gulf of Guinea have raised hopes that its offshore resources mirror those of Brazil, and will enable it to reverse a trend of plateauing production.
Gabon has the second-highest number of active oil blocks in sub-Saharan Africa to be licensed, as well as open blocks that have yet to be licensed. Exploration was under way at 52 blocks as of October 2014, according to Togo’s Ecobank, while exploration rights were awarded for a further nine permits in August 2014 in the last licensing round.
Gabon expects to launch a new licensing round for offshore blocks in September 2015 once 3D seismic surveys have been conducted, with bids expected in early 2016. The Ministry of Petroleum and Hydrocarbons intimated that the next batch will be allocated to firms that have the resources to develop the reserves, suggesting that, unlike in the last licensing round, the oil majors will be favoured.
Following the 10th licensing round, which was initiated in 2013, production-sharing contracts were signed in August 2014 for nine blocks after lengthy negotiations. UK-based juniors Impact Oil and Gas and Ophir Energy acquired 100% interests in three blocks and two blocks, respectively, while 100% interests in one block each were secured by Malaysia’s Petronas, US-based Marathon Oil, Spain’s Repsol and a joint venture of Noble Energy with Woodside Petroleum. Negotiations are reportedly continuing with ExxonMobil for the C11 block.
Deep & Ultra Deep
With low oil prices slowing capital spending on new exploration for many producers, high-cost operations in deep and ultra-deep blocks are proving less attractive – at least until barrel prices stabilise. The depths of many of the offshore blocks offered in the last round posed a problem, according to Charles Tchen, the CEO of Independent Petroleum Consultants, with bids submitted for only 13 of the 45 offered. The government will attempt to auction off the remaining blocks in the next licensing round, but, for Tchen, potentially only nine blocks will be of interest. “Some of the remaining blocks in shallower waters are interesting, but most of them are in very deep water. Only 13 attracted interest as the others were at depths of 3500 metres and over,” he said. “The deeper the water, the higher the exploration costs and risks.” With the exception of the licence acquired by Noble and Woodside, each of the companies acquired 100% interests, which, given the water depths, is expected to give rise to farm-in opportunities to share exploration risk.
Although the production-sharing contracts allow operators to issue tenders for the seismic surveys of each block – with a number of 3D surveys under way or completed – the government is conducting its own study, using CGG Veritas to do a 3D-seismic survey of the licences awarded.
Ophir Energy announced in March 2015 that it had completed a 2300-sq-km survey for Nkouere and Nkawa, which lie in water depths of 2000-2500 metres. The results have not been disclosed but the UK-based junior will be hoping that they bring good news, after three exploration wells drilled in 2014 in its adjacent Mbeli, Ntsina and Gnondo blocks in the North Gabon basin provided no major hydrocarbon shows. Ophir said it has acquired an 8500-sq-km 3D seismic data survey to better understand the blocks.
Impact Oil and Gas announced in February 2015 that it had completed the acquisition of 3D seismic data covering 2300 sq km on Block B7, one of its three blocks, lying in 200-1800 metres of water, and had contracted Geotrace to process the data. The seismic survey represents the work programme for the initial term of the Block B7 licence, with the second term, which will include a well commitment, to start in the first quarter of 2017. Interpretation of data for blocks D13 and D14, targeting the pre-salt, is ongoing. Marathon Oil, meanwhile, began acquisition of 3D seismic on the 100%-owned Tchicuate offshore block in November 2014. The US firm expects to complete processing by the end of 2015 and said the block, in 1000-2500 metres of water, is near proven shallow-water, pre-salt oil discoveries.
Major new oil discoveries have been few and far between in recent years. In contrast, Total, Eni and Shell have all encountered significant gas and condensate deposits in Gabon’s pre-salt formation during offshore exploration. Following the first discovery in the deepwater portion of Gabon’s pre-salt play by Total in August 2013, Shell and Eni made their own discoveries during 2014.
Total, which has a 42% stake in the Diaba deep offshore field, in partnership with Marathon Oil and Cobalt International Energy, announced in August 2013 the first discovery in Gabon’s deepwater pre-salt play. The Diaman-1B exploration well encountered 50-55 net metres of hydrocarbons pay, with preliminary analysis suggesting natural gas with condensate content. The French operator announced in March 2015 that it is still processing data from the seismic 3D survey, launched in September 2014 to cover the western portion of the licence.
In October 2014 Shell announced that its Leopard-1 well, which was drilled 145 km off the coast, had encountered a substantial natural gas column with around 200 metres net gas pay in a pre-salt reservoir. Shell, as operator with a 75% stake, and its partner CNOOC, with a 25% stake, are undertaking an appraisal to determine resource volumes. Leopard-1 was drilled in water 2110 metres deep to a total vertical depth of 5063 metres, while Total’s well on the Diaba licence G4-223 was drilled to a total depth of 5584 metres in 1729 metres of water.
An appraisal campaign is also under way by Eni at its Nyonie Deep prospect following what it described as an important gas and condensates discovery in July 2014. The Italian oil and gas group said that preliminary estimates suggest an initial potential in place of 500m barrels of oil equivalent. The well was drilled down 4314 metres in just 28 metres of water.
Exploration work is also taking place onshore. An oil and gas accumulation was discovered in July 2014 during the drilling of the Igongo-1 well on the Nziembou licence, which is operated by Perenco, and is being assessed. The well encountered 90 metres of net oil and natural gas pay, and is expected to be brought on-stream in 2015. In March 2015 Maurel & Prom announced production test rates of more than 1000 bpd on the Mabounda-1 and Niembi-1 exploration wells in the Ezanga permit, with the aim of starting production in September 2015. The company has also announced that it is to move forward with the development of its two latest discoveries at its Kari and Nyanga Mayombe exploration licences.