Can Senegal rejuvenate West Africa’s upstream?
Relative stability and promising geology may yield another new frontier in the region
FRESH exploration hotspots have been few and far between across West Africa lately. The exception is Senegal, where highly promising finds and one of West Africa's more stable business regimes are paying dividends for the likes of Kosmos Energy and Cairn Energy.
Senegal's offshore acreage is largely divided between the more oil-rich south and the more gas-prone north, the latter's geology being a continuation of that in Mauritania, another country coming into its own as a prospective gas producer.
To the southwest of Dakar - located on the African mainland's most westerly headland, Edinburgh-based Cairn has built on an initial oil discovery by Australia's Far Petroleum in 2014, drilling several wells in the SNE field within the Rufisque, Sangomar and Sangomar Deep offshore Production-Sharing Contract (PSC) area, which covers some 7,490 square km.
In March, Cairn upgraded its resource estimate for 2C (P50) reserves for the SNE field by 20% to 385m barrels, a figure that could rise further once data from another two recently drilled wells are assessed. The estimate for 1C (P90) reserves came in at 200m barrels.
In the north, Kosmos holds acreage in both Senegal and Mauritania. In May, the company announced the drilling of a fifth-consecutive successful well - Teranga1 - in what it describes as a "fairway" of acreage extending around 200km from the Marsouin-1 well in Mauritania through the Greater Tortue area, on the countries' maritime boundary, to Teranga-1, which lies 65km northwest of Dakar in the Cayar Offshore Profond block.
Kosmos says it has discovered a gross resource of some 25 trillion cubic feet of gas and estimates this offshore fairway across the two countries may hold more than 50 trillion cf of resource potential.
More to come?
The cross-border component to Kosmos's discoveries may not be as big a handicap as it looks, if the firm's memorandum of understanding signed earlier this year with both governments produces the collaboration intended.
Kosmos estimates Greater Tortue alone has a total gross resource of around 20 trillion cf -enough to warrant an LNG project, if agreement can be reached on its location.
Cooperation is also evident on Senegal's southern border, where the country has a joint development area with Guinea Bissau. Here, Australia's Woodside in February farmed into a PSC covering the AGC Profond Block held by Impact Oil & Gas, taking a 65% stake and assuming operatorship.
Unsurprisingly, The Gambia, whose land borders lie entirely within Senegal and has offshore acreage where the River Gambia runs into the Atlantic, is also attracting exploration interest. Last year Houston-based, Africa-focused Erin Energy carried out seismic surveys on its Gambian blocks, which it says are "on trend" with the Cairn/Far discoveries in Senegal.
By contrast to the cooperation between Senegal and its partners over their shared reserves, Côte d'Ivoire and Ghana have yet to settle a maritime border dispute that threatens to stymie Ghana's Ten project - its reserves straddle the border. The dispute is unlikely to speed up development across the border in Côte D'Ivoire, a country long open to explorers but which has so far been unable to produce a hydrocarbons discovery on the scale of Ghana's Jubilee field.
Gas is produced to supply the domestic market, but development of all parts of the economy were hampered by civil war following the 2010 presidential election, from which the country is still recovering.
Unsurprisingly, The Gambia, whose land borders lie entirely within Senegal and has offshore acreage where the River Gambia runs into the Atlantic, is also attracting exploration interest
Some activity is still taking place. Earlier this year, Anadarko drilled the Paon-5A well in block CI-103 and found around 100 feet of vertical pay. This was the company's first horizontal deep-water well. It hopes to repeat its successes across the border in Ghana in similar Cretaceous geology. Anadarko has interests in five offshore blocks in Côte d'Ivoire, covering some 5,665 square km. In May, the firm was drilling a horizontal sidetrack well from Paon-5A with wells planned for two other prospects later this year.
The region's longer-established smaller oil producers are trying to eke out the most from fast-maturing reserves. Floating LNG could help, though the technology remains in infancy. Bermuda-registered Golar LNG plans to supply Cameroon with its first FLNG facility by mid-2017. It also wants to provide an FLNG vessel for Ophir Energy's proposed Fortuna project in Equatorial Guinea.
But the plan may be a casualty of the collapsed talks between Ophir and Schlumberger over possible cooperation on the project. In June, Ophir said it was looking for fresh investors to support Fortuna. Bill Higgs, the firm's chief operating officer, says the capital costs to produce first gas from the project had halved over the previous year to $450m.
Equatorial Guinea launched a bid round for 37 exploration blocks in early June, meanwhile, of which 32 are offshore. The bidding deadline is end-November with licences scheduled to be awarded in January. The government says it is still interested in working with ExxonMobil, despite not renewing the US firm's licence to to operate the Zafiro field, the country's biggest producer.
This article is part of an in-depth series on West Africa. Next article: Action time for Nigeria's government.