New Oil Finds in Eq. Guinea. (Oil and Gas)
Ford, Neil, African Business
Amerada Hess has made another sub-stantial find in the Rio Muni Basin, off-shore Equatorial Guinea. The Akom discovery in the Block G was made in 443m of water, at a total depth of 2,481m, encountering 49m of net pay. The announcement follows hot on the heels of the Ebano discovery, three kilometres to the north west, in another of the US independent's concession areas, Block F. In January 2002, over l00m of net pay was encountered by an exploration well on Ebano.
In addition to the Ceiba, Okume and Oveng fields, the discoveries confirm the oil wealth in the maritime territory surrounding Equatorial Guinea. Lying 20km to the north east of Ceiba. the Ovene-l well struck oil in December 2001. The head of Amerada Hess' operations in the Gulf of Guinea, Brian Maxsted, said: "We are extremely pleased to make our third successive find offshore Equatorial Guinea after the discovery and development of the Ceiba Field. This continuing success is further confirmation of the significant prospectivity of our assets in the Rio Muni Basin offshore Equatorial Guinea."
Maxsted continued: "Possible development scenarios are being evaluated for the Okume, Oveng, Ebano and Akom discoveries, while exploration drilling continues. The imminent arrival of a third rig will enable us to accelerate our drilling offshore Equatorial Guinea." The options available to the company include developing two or more of the discoveries in a single development, or developing them all separately.
Amerada Hess is the operator of both Blocks F and G, with 85% equity in each of the ventures. Its partner in the two concessions is South Africa's Energy Africa. However, the government of Equatorial Guinea is entitled to 5% of production on both blocks.
Amerada Hess acquired its interests in Equatorial Guinea when it took over the original operator, Triton Energy, at the end of 2001 in a $3,2bn deal. Since the take-over, the new discoveries have confirmed the value of the blocks.
The Equatorial Guinean operations have also boosted Energy Africa's profits. As a result of increasing production in Guinean waters, the company doubled its total production during 2001. The success should guarantee that the two companies are able to find enough capital to finance the $lbn required to develop the Oveng and Okume discoveries alone.
Oil transforms economy
Offshore Equatorial Guinea is one of the most exciting new oil frontiers in the world. Predominately a deepwater region, it is at the forefront of the development of deepwater technology. The discovery of the Ceiba field in 1999 changed the whole oil industry's thinking about the country and boosted investment throughout the Gulf of Guinea. Optimists have named it the 'African Kuwait' and oil production has certainly caused economic growth in the country to rocket.
Government revenues rose by over 1000% between 1994 and 2000, oil revenues as a percentage of GDP increased to 83% in 2000 from 24% in 1994 and GDP per capita doubled between 1997 and 2000. Economic growth in 1997 was a mammoth 71% and is predicted by the IMF to reach 50% for 2001.
Production from the Ceiba, Alba and Zafiro fields already stands well in excess of 200,000 bpd and is set to continue rising for the next few years. Although the oil sector has made few links with the rest of the economy, it has fuelled a construction boom in the capital city, Malabo.
Despite the country's poor human rights record, investment continues to pour in and it is the fourth most popular destination for US private sector investment in sub-Saharan Africa, with $5bn of investment in 2000. The US government does not have an embassy in the country but hopes that economic growth will lead to democratic reform.
A state-owned oil company is in the process of being set up to oversee the state's interests in the sector. Petroguinea is adopting the operational and technical roles of the Ministry of Mines and Energy. …