West African activity levels have been slower than their deepwater counterparts in Latin America and the US Gulf to recover since the downturn, but visible developments show that activity levels may have reached a turning point.
There are 11 developments due on stream during 2018 with an additional four in 2019. This is more than the current visible number of projects due online by 2020 in the US Gulf. Whilst these developments will bring new production online in West Africa, additional exploration activities will be required to maintain any uptick in activity levels.
Those exploratory activities that are visible for next year are moving away from the traditional deepwater oil and gas nations to emerging nations such Gabon, Morocco, Namibia, South Africa, Guinea and Equatorial Guinea who all have rig demand for 2018 or 2019 for wildcat wells in their territorial waters. Morocco’s test at Rabat Deep and Mauritania’s ongoing exploration around the Tortue field are the most promising prospects in the region. There are fresh licensing rounds from Guinea, Sierra Leone, Ivory Coast and Republic of Congo underway or due to start in early 2018.
In the traditional oil and gas nations such as Nigeria and Angola, major developments are progressing on schedule. Kosmos are currently building the reserves for the Tortue development in Mauritania with exploratory work ongoing around the field that has seen mixed results. Yaakar was successful but Hippocampe was water-bearing, while Cairn is progressing the SNE development off Senegal towards FID in 2018 following a successful drilling campaign in 2017 boosted reserves at the field to 560 million bbls of oil and c. 1 trillion cf of non-associated gas. The Jubilee development in Ghana has received approval from authorities for a full field development paving the way for Tullow to begin development with drilling expected to start in early 2018 using the current production vessel. In Nigeria, Eni is looking to reach FID in early 2018 on its 560 million bbl development of the Zabazaba and Etan fields, where they are also facing lingering questions over how they and Shell gained control of the licence in 2011 which may cause delays to the project in the future. Ophir Energy has delayed FID on the Fortuna LNG project off Equatorial Guinea to 2018 after Ophir and its partners found sourcing the remaining $1.2 billion of the $2 billion project was taking longer than they had anticipated.
Two major deepwater West African projects are due online in 2018 – Egina field in Nigeria and Kaombo project in Angola – with both on schedule and on budget. In Ghana, Tullow expect to return to development drilling on their TEN project following a favourable ruling by ITLOS in September.
In East Africa, Mozambique’s first offshore field development received approval earlier this year with Eni contracting the Saipem 12000 to complete development drilling at the $8 billion Coral South development. The first of up to three phases of the project will see subsea wells connected to a FLNG vessel to begin production in 2022. In neighbouring Tanzania, Statoil is preparing to test its acreage as it attempts to produce a viable multi-field deepwater development. Statoil have contracted the Ocean Rig Poseidon the one well program it hopes will add to the 22 trillion cf of in-place resources already discovered.
For more details on these projects and exploration activities, please see our Deepwater Insights: Africa report.