Wood Mackenzie: Angola the new hot spot

• Offshore Angola Acreage and Major Discoveries [130,620 bytes]

Three potentially giant oil discoveries in a little more than 12 months have confirmed Angola's deepwater area as a global exploration hot spot.

This is the view of Wood Mackenzie Consultants Ltd., Edinburgh, which says development of these finds could take Angola's total oil production from 530,000 b/d today to 1.2 million b/d in 6 years.

The analyst says its forecast is based on optimistic time scales for development of the three main deepwater finds, Girassol, Dalia, and D14-2x, but is conservative in taking no account of undiscovered reserves.

"Recent exploration history suggests that there are more large oil finds to be made," said Wood Mackenzie. "These could extend this production growth profile well beyond the early part of the next decade.

"Angola is one of the few places in the world that can offer unlicensed and unexplored offshore acreage immediately adjacent to, and on trend with, giant oil fields.

"Many of the most attractive blocks will be opened for bids over the coming months and, with all the main players competing strongly, Sonangol will no doubt receive some very large offers."

Girassol

Elf Aquitaine SA unit Elf Angola is operator of offshore Block 17, where it has made two discoveries, Girassol and Dalia, thought to be the largest off West Africa to date (see map, p. 42).

Elf discovered Girassol in more than 1,300 m of water with the Girassol-1 well drilled in April 1996. This was the second well on the block, and it encountered five oil-bearing sands, the lowest of which flowed 2,800 b/d of 33-34° gravity crude oil on test.

"Girassol was soon recognized as potentially one of the largest finds ever made in West Africa," said Wood Mackenzie, "and Elf moved quickly to confirm its significance."

The operator spudded a twin-borehole appraisal well in December 1996. Girassol-2A is a vertical well drilled 6 km northeast of the discovery well. It flowed on test a cumulative 18,000 b/d of oil from two intervals.

"The high flow rates achieved in Girassol-2A are very encouraging," said Wood Mackenzie. "With the success of this well, reserves were put at 500 million bbl."

Girassol-2B well was deviated from the original borehole towards a target 500 m southwest of the rig location. The well flowed 3,080 b/d of oil on test.

"On the basis of the three wells completed so far," said Wood Mackenzie, "recoverable reserves are now put at 700 million bbl of oil. Further reserves upgrades are a distinct possibility once Girassol appraisal/development drilling resumes."

Dalia

In May 1997, Elf drilled the third wildcat on Block 17, Dalia-1, at a point 3 km southeast of Girassol-1. This well also found a potential giant oil field.

"The well tested at a cumulative rate of 16,000 b/d from two intervals in Tertiary age Malembo sandstones," said Wood Mackenzie. "Seismic data suggest that the western part of Dalia is partially superimposed on Girassol."

The analyst says an early estimate of reserves, based on data from the discovery well, suggest Dalia reserves are greater than Girassol's 700 million bbl.

Once Dalia-1 had been completed, Elf began drilling Dalia-2 appraisal well in 1,255 m of water 7 km east of the discovery well. Wood Mackenzie said this was a vertical borehole, results of which are still to be announced.

Once Dalia-2 well is completed, Elf is due to drill two more new-pool wildcats on Block 17 this year. The first of these will be named Rosa-1.

"Block 17 proven reserves, in Girassol and Dalia, already exceed 1.5 billion bbl," said Wood Mackenzie. "The ultimate potential of the block is estimated at double or even triple this volume, and remaining wells of the current drilling program could confirm much of this upside."

D14-2x

Block 14 off Angola is operated by Chevron Corp., which made an oil strike with D14-1x well spudded in August 1996. The well flowed on test 2,750 b/d of oil. Chevron then moved the rig 22 km north to spud D14-2x well in 405 m of water.

"A flow of 7,500 b/d was tested from Miocene sandstones," said Wood Mackenzie, "and D14-2x was declared a potential giant oil discovery with reserves that could exceed 500 million bbl of oil."

In June, Chevron began appraisal drilling of the find. Two wells have been completed and a third is under way. Well results have not been disclosed, but the analyst said the two so far have been successful.

Development

Wood Mackenzie said the huge scale of Elf's Block 17 finds makes early development a priority for the participants: operator Elf 35%, Exxon Corp. 20%, BP Exploration Operating Co. Ltd. 16.67%, Statoil 13.33%, Norsk Hydro AS 10%, and Petrofina SA 5%.

The analyst says development studies are under way, and work could begin as early as 1999. Six contractors have pre-qualified to build a floating production, storage, and offloading facility for Girassol.

"This vessel could be the largest FPSO in the world, with a production capacity of more than 200,000 b/d and 2 million bbl of storage capacity.

"One option could be the use of a concrete barge type of production facility. This would be along the lines of the recently installed N'Kossa production barge offshore Congo."

First oil is anticipated in mid-2000. Although the 1,300 m water depth will provide technical challenges, projects at similar depths are more advanced off Brazil and in the Gulf of Mexico.

Production from Girassol is expected to reach 150,000 b/d by 2002. The project will involve one of the largest subsea developments to date, with 40-60 wells.

"Dalia field is probably too large for a single joint development with Girassol, despite its juxtaposition, but there is obviously potential for sharing some services," said Wood Mackenzie.

"Development is most likely to utilize a second major floating facility. Elf is busy with appraisal work and is yet to announce its target timetable for Dalia development. We estimate a start date no earlier than 2002."

Wood Mackenzie said D14-2x is relatively less appraised than the Block 17 discoveries, and a development plan is still to be chosen: "Water depths in this part of Block 14 are 300-400 m, and we expect that an FPSO type of facility could be installed as early as 2000."

Licensing

State firm Sonangol is undertaking a phased licensing of open acreage off Angola. Following the success of Elf and Chevron, almost all open acreage in Angola is keenly sought after.

Wood Mackenzie expects a number of offshore licenses to be awarded this year and more blocks to be offered for bidding by oil companies in 1997.

Shallow water Block 9 is expected to be awarded to Texaco Inc. following ministerial approval. Five wells were drilled on the block by previous equal license partners Cities Services Co. and Marathon Oil Corp. These were unsuccessful, and the license was relinquished in 1985.

Sonangol is looking to operate Block 5 on behalf of a group of about three other companies. The block has exploration potential, the analyst noted, plus marginal discoveries made by Conoco Inc.

Block 6 Cehonga heavy oil find, made by Total SA in 1983, is the subject of development feasibility studies by Sonangol. One possibility is injection of up to 300 MMcfd of associated gas currently flared on Blocks 2 and 3 to improve productivity.

BHP Petroleum Pty. Ltd. and Texaco Inc. have been invited to operate Blocks 21 and 22, respectively. Negotiations for production-sharing agreements (PSAs) are under way and expected to be concluded this year.

Sonangol is expected to offer operatorship of a PSA for Block 19 in the near future. Interests in Blocks 19, 21, and 22 are expected to be allocated to other companies before PSA signature.

Bidding for deepwater Kwanza basin Blocks 23, 24, and 25 closed on Aug. 12. Wood Mackenzie said Sonangol hopes to select operators this year with a view to awarding licenses in first half 1998.

Congo basin Blocks 31, 32, 33, and 34 are expected to be offered for bidding this month or next, with a view to license awards in mid-1998.

"Exact boundaries of the four blocks are still to be announced," said Wood Mackenzie, "but the area comprises 34,000 sq km with water depths of 2-3,000 m."

Blocks 31-34 are thought to be potentially on trend with Girassol and Dalia discoveries and to be particularly sought after.

For the longer term, Sonangol has tentative plans to establish 14 new blocks (Blocks 35-48) in Angola's southern deepwater basins.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.