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Explorers mull Côte d’Ivoire campaigns

Tullow, BP and CNR are among IOCs with drilling plans

Attractive licensing terms and a revamped acreage map have put Côte d'Ivoire firmly back on the radar for explorers. But the country could do with an early discovery to persuade international oil companies (IOC) to convert positive plans into substantial drilling campaigns.

Abidjan has been pushing hard to ensure that IOCs maintain interest in an upstream sector that has promised much but delivered few oil and gas discoveries in recent years. A dry well drilled by Ophir Energy in 2017 paved the way for that company's exit from the country.

These days, terms for explorers in Côte d'Ivoire are viewed as being amongst the most competitive in Africa. Bernard Looney, BP's head of upstream, praised the country's "low cost access with minimal financial commitments" in a December investor presentation. The country usually allocates blocks via an open licensing system, rather than via specific rounds.

Côte d'Ivoire has also redrawn parts of its licensing map, notably expanding the size of blocks in deep-water acreage in an effort to attract investors to areas that are more costly to develop. Meanwhile, the settling of the country's maritime border dispute with Ghana in September 2017 has already paid dividendsin early 2018, Tullow acquired Block 524 on the Côte d'Ivoire side of the boundary adjacent to its existing TEN oil development in Ghana.

Tullow has been analysing data there and is planning this year to carry out seismic surveys across part of seven onshore blocks along the country's coast it has acquired since 2017. Meanwhile, BP and Kosmos have said they could start drilling in 2020 on acreage they acquired at the end of 2017. They were awarded five blocks covering some 17,000 km2 in deep water off the central coast.

Kossipo well scheduled

However, a big hope for 2019 will be the Kossipo exploration well, which Canadian Natural Resources (CNR) has said it plans to drill in the second quarter. Any oil found there could be tied back to the existing floating production storage and offloading (FPSO) vessel on the Baobab field in Block 40.

Baobab and the CNR-operated Espoir field in adjacent Block 26 are the country's only producing developments, dating back some two decades, which produce fewer than 50,000 bl/d of oil and around 70mn ft3 of gas between them. CNR also plans to start the delayed Phase 4 expansion development at Espoir in late 2019, with first production targeted in early 2020.

Exploration success at Kossipo may spur others to speed their drilling plans, according to Lennert Koch, a sub-Saharan Africa upstream analyst at consultancy Wood Mackenzie. But he warns that the upstream sector's prospects remain fragile.

"While improved fiscal terms and growing confidence in the country's hydrocarbons potential are both positive for the Ivoirian upstream, oil-price volatility may yet deter investment, slowing growth," he says.

Energy minister Tanoh goes

The sector has already been unsettled by the sacking in December of respected energy minister Thierry Tanoh, the main architect of the upstream restructuring. There has been speculation in Abidjan that his departure was in part due to concerns in the upper echelons of government that IOC terms have been overly generous, potentially reducing the government take too much.

However, his dismissal was more the product of the collapse in 2018 of a political alliance between the parties of President Alassane Ouattara and former president Henri Konan Bedie. Tanoh is a close ally of Bedie within the opposition PDCI-RDA party and could be a candidate to succeed the 84-year old in 2020 elections, if Bedie decided not to stand.

"Tanoh was criticised foramongst other thingsgranting exploration licenses at unsuitable prices, but this was really just cover for the dismissal of a minister that the government wanted to remove for political reasons," Felix Bony, editor-in-chief of Ivorian newspaper Soir Info told Petroleum Economist.

Little is known about the likely approach of Tanoh's successor Abdourahmane Cissé to the oil sector. However, the government is expected to tread cautiously with any change of tack, for fear of losing investment at a time when it is pushing to diversify its largely agriculture-based economy.

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