Petronas makes offshore discovery in Gabon

PETRONAS has made the Boudji-1 discovery in deepwater Gabon. The discovery is located in Block F14 or Likuale in which PETRONAS holds 50% as an operator, Woodside holds 30% and the government holds 20%. The block lies in deepwater between depths of 2,500-3,200m.

Exploration activity in the deepwater has been slow with the country previously focussing in the onshore and coastal areas. Gabon has held ad-hoc licensing rounds for the offshore with PETRONAS’ block awarded in 2014. The 11th round held in 2015 is the most recent – the deadline for bids was extended, however in the end no awards were made with the timing coinciding with the collapse in the oil price.

PETRONAS is building ups its international presence again after a series of failed investments such as in Canadian and Egyptian LNG. Last week saw the company farm-in to 40% of FAR Energy’s blocks in The Gambia.

Full announcement of the Gabon discovery below.

PETRONAS ANNOUNCES DEEPWATER OIL AND GAS DISCOVERY OFFSHORE GABON

PETRONAS’ subsidiary, PC Gabon Upstream S.A. (PCGUSA) today announced new oil and gas discovery from its Boudji-1 exploration well in Block F14 (Likuale), located in South Gabon.  

The ultra-deepwater exploration well, drilled in water depths of 2,800 metres, encountered 90 metres of gross high quality hydrocarbon-bearing pre-salt sands.

The discovery marks a significant milestone for PETRONAS as it expands upstream growth in West Africa, demonstrating its frontier exploration and deepwater operational capabilities.

“The discovery in Gabon is an encouraging development for PETRONAS, as we continue to pursue growth activities beyond Malaysia, in line with the strategy to expand our core oil and gas business by growing our resource base,” said PETRONAS Executive Vice President & Upstream CEO, Datuk Mohd Anuar Taib.

“Aside from boosting Gabon’s oil and gas industry, this discovery will also spur further growth activities in the region, and complements our achievements towards building a significant deepwater portfolio globally,” he added.

PETRONAS, together with the Ministry of Petroleum & Hydrocarbons, Gabon, will conduct an assessment to further determine the commerciality of the resource volume.

PCGUSA is the operator for Block F14 (Likuale), with Australia’s Woodside holding a 30 per cent participating interest.

To-date, PETRONAS’ deepwater portfolio includes partnerships in the Gumusut-Kakap, Malikai and Kikeh deepwater fields located offshore Sabah. Additionally, there are two new upcoming deepwater development projects in the portfolio – the Limbayong field in Sabah and the Kelidang Cluster in Brunei.

PETRONAS’ global upstream reach continues to expand to Mexico with the winning of six deepwater blocks in bidding round 2.4, positioning PETRONAS as the second largest gross acreage holder in offshore Mexico with a total of nine blocks.

Further strengthening the company’s presence in West Africa, PETRONAS has recently signed a farm-out agreement (FOA) with Australia’ FAR Ltd for a 40 percent interest in the offshore petroleum licenses of Blocks A2 and A5 located offshore Gambia.

Source: http://www.petronas.com.my/media-relations/media-releases/Pages/article/PETRONAS-ANNOUNCES-DEEPWATER-OIL-AND-GAS-DISCOVERY-OFFSHORE-GABON.aspx

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Shell sells onshore Gabon to Carlyle

On 24^th March, Shell announced the sale of its onshore Gabon assets to Assala Energy Holdings (a portfolio company backed by Carlyle Group).

Assala will pay USD587 million and assume debt of USD285 million, taking “enterprise value” to c.USD870 million. Shell will also receive up to a further USD150 million in contingent payments depending on oil prices and performance. This compares with a Wood Mackenzie NPV10 of c.USD600 million and implies that some value being placed on the gas resources.

The onshore portfolio comprises c.60mmbbl of oil (commercial) and c.160bcf of contingent gas. The gas is currently undeveloped due to a limited market, but could one day be used to supply local power generation. The portfolio produces c.35mbopd of and Shell Trading will retain lifting rights from the assets for the next five years.

The licences being acquired are a mix of PSCs and concessions with some of the concessions being converted into PSCs over the last 10-20 years when they came up for renewal. The licences are owned directly and indirectly through a JV with the Gabonese government (75% Shell, 25% State). The largest asset in the portfolio is Toucan which commenced production in 2003 – significant investment was made between 2012-2014 as part of an additional phase of development to extend the field life to c.2030.

The offshore licences (BC9 and BC10) are excluded from the same, where Shell made the large Leopard-1 discovery in 2014 which is estimated to contain close to 1tcf of recoverable gas.

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Sub-Saharan Africa - newsflow update

Gabon Deepwater - Leopard discovery

• Leopard-1 was drilled on licence BCD10
• Shell 75%*, CNOOC 25%
• Encountered substantial gas column with 200m net gas pay
• Further appraisal required
• FLNG? 3-4 tcf may be required, although economics of sales into Europe are marginal
• Government is also keen to grow domestic gas market

Congo Offshore - Eni/NewAge - follow up discovery in Marine XII

• Minsala Marine discovery
• Estimated 1bnboe in place, of which 80% oil
• In same shallow water block as the Litchendjili and Nene Marine fields, both of which are currently undergoing development

Angola - first discovery in Kwanza Basin

• Pre-salt offshore Kwanza Basin - oil discovery made by Repsol
• Will evaluate commerciality of the Locosso oil field
• Located in Block 22, immediately to south of Cobalt's Block 21 which contains the play opening Cameia field
• Given remote location and water depth, Wood Mackenzie estimates will require 300mmbbl to be commercial on standalone basis

Liberia, Cote d'Ivoire - Anadarko's non-commercial wells

• Anadarko wells in West Africa all encountered non-commercial oil
• Liberia: Iroko-1 and Timbo-1
• Cote d'Ivoire: Morue-1
• http://www.anadarko.com/SiteCollectionDocuments/PDF/Operations%20Reports/APC%203Q14%20Ops%20Report%2010-28-14.pdf

Nigeria - NNPC pre-empts sale of OML25

• NNPC has pre-empted on the sale of OML25
• Post transaction, NNPC will own 100% and likely transfer the interest to NPDC
• NPDC's portfolio is already overstretched and future investment will be heavily constrained
• The winning bidder of the Shell, Eni, Total process was Crestar Integrated Natural Resources Limited
• It is believed that the pre-emption, a decision made by the Minster of Energy, is due to Crestar's Chairman being  Osten Olorunsola
• The Minister of Energy had fired Osten Olorunsola as Director of Petroleum Resources in June 2013
• http://africaoilgasreport.com/2014/11/farm-in-farm-out/nnpc-in-desperate-search-for-funds-to-pay-for-oml-25/

South Sudan - fighting likely to intensify around fields

• Government and rebels now re-arming following end of rainy season
• Sudan is providing South Sudanese Machar-led rebels with weapons and intelligence
• Rebels likely to set-up bases where they can attack oil fields
• Local self defence militia are guarding fields bolstered by Chinese peacekeepers
• Should prevent rebels gaining control of fields, but fighting likely to intensify

East African export pipeline

• World bank has pledged USD600mm funding towards Ugandan/Kenyan export pipeline
• Total cost estimated to be >USD4bn
• Project still remains in early stages - commercial structure, construction, ownership and operations all yet to be determined
• FEED contracts expected to be awarded end of 2014

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