Cote d'lvoire has firmed up plans with a group led by a unit of United Meridian Corp. (UMC), Houston, to hike oil and gas production off the West African nation.
Among the latest developments, Cote-d'lvoire:
- Formally approved a development plan proposed for 335,000 acre Block CI-11 by UMC unit UMIC Cote d'lvoire Corp. and partners (see map, Aug. 8, p. 24).
- Signed a long term gas purchase contract in which UMIC and partners will provide gas from their Panthere and Lion fields on Block CI-11 for electrical power generation and other uses.
- Set terms in three agreements that allow the UMIC group to explore three more tracts that lie mostly off Cote d'lvoire in the Gulf of Guinea, with promises of concluding production sharing contracts (PSCs) on the acreage by yearend.
The development plan fits Cote d'lvoire's goal of pushing the use of gas as a means to reduce environmental effects of economic development while allowing Block CI-11 partners to proceed with development of oil, gas, and condensate reserves found on the tract in the past year.
UMC said Block CI-11 oil flow of about 20,000 b/d is the main economic driver of the tract's development. But selling associated gas will enhance the economic return to UMC and its partners and provide an attractive fuel for Cote d'lvoire's power sector.
BLOCK CI-11 PLAN
The Block CI-11 development plan corresponds to a program tentatively approved last summer by Cote d'lvoire.
UMIC and partners agreed to drill six more delineation wells in Block CI-11's Panthere and Lion fields, construct and install gas processing facilities on the tract, and lay a 14 in. gas pipeline and 8 in. crude oil line to power generating plants and the Sir refinery in the capital city of Abidjan.
As approved, the development plan will require the UMIC group to spend a combined $160 million to start production on the tract. About $40 million of that sum has been spent.
Lion field production is expected to begin in second quarter 1995, Panthere field production in fourth quarter 1995. Until the project's oil and gas pipelines are complete, Block CI-11 oil is to be stored aboard a tanker that will shuttle oil to the Sir refinery.
Block CI-11 partners and shares of interest are:
- In Lion field, operator UMIC 25%, state oil company Ste. Nationale d'Operations Petrolieres de la Cote d'Lvoire (Petroci) 40%, International Finance Corp. (IFC) 15%, Global Natural Resources Corp. 10%, and Pluspetrol SA 10%.
- In Panthere field, operator UMIC 25%, Petroci 20%, IFC 23%, Global 16%, and Pluspetrol 16%.
UMC and partners are working with the IFC to arrange project financing for Block CI-11 development. UMC also is seeking an offshore rig to resume Lion field development in November.
GAS CONTRACT TERMS
Cote d'lvoire agreed to buy at least 20 MMcfd of gas in the first year of the contract and at least 50 MMcfd in the second year.
The government will pay $1.70/Mcf for the first 4 years of the pact, after which the sale price is to be adjusted based on the price of West Texas intermediate crude oil.
UMC has retained the right to negotiate with other possible customers sales of gas in addition to the government's daily takes.
Cote d'lvoire Mines & Energy Minister Lamine Fadika last summer said because their hydrocarbon resources are finite African nations cannot justify flaring associated gas.
"To be fully responsible for our country's natural resources, we must prevent waste," Fadika said. "Our associated gas is plentiful, it can be inexpensive, and it can cover our electric energy demand for the short and medium term at low cost."
Petroci will use part of Block CI-11's gas as feedstock to upgrade gasoline produced at the Sir refinery. The electrical power is needed to balance the country's economic and industrial sectors, improve the feasibility of a Canadian company's plan to develop a billion dollar nickel deposit in Cote d'lvoire, and reduce the cost of power to other consumers.
OTHER BLOCKS
With development set for Block CI-11, tract partners have begun lining up rights to explore other tracts off Cote d'lvoire, including 250,000 acre Block CI-12 immediately west of Block CI-11, 1.43 million acre Block CI-01, and 322,000 acre Block CI-02.
UMIC and partners earlier this year collected 8,500 line km of 2D seismic data in two surveys on Block CI-12. Effective Nov. 30, a production sharing contract (PSC) can be put in place by the UMIC group with 30 days notice to the government. Operator UMIC holds a 25% interest in Block CI-12, Petroci 40%, IFC 15%, and Global and Pluspetrol 10% each.
On Blocks CI-01 and CI-02, about 80 miles east of Lion and Panthere fields, the UMIC group plans seismic studies to follow up numerous test flows of earlier discoveries by major companies. Operator UMIC holds a 90% interest in each tract and Petroci 10%, with an option to increase its share to 40%.
