West Africa: Anadarko uncovers a new offshore oil province
ANADARKO has made a large oil discovery off Sierra Leone that should confirm the existence of a new oil frontier, stretching more than 1,000 km offshore west Africa. The find could transform the prospects of the four countries along the coast, Sierra Leone, Liberia, Ghana and Ivory Coast, and draw the majors to the region.
The US independent said the Venus B-1 exploration well, in offshore block SL 6/07, was drilled to a depth of around 18,500 feet, in about 5,900 feet of water, and encountered more than 45 net feet of hydrocarbon pay. Venus is the first deep-water well in the Sierra Leone-Liberian basin.
"The Venus discovery confirms the existence of an active petroleum system in the basin and enhances the prospectivity of our vast acreage position," said Bob Daniels, Anadarko's senior vice-president of worldwide exploration. Added to the Jubilee field in Ghana, Venus has established bookends to a new offshore frontier, the company said. Anadarko said it had identified another 30 prospects in the area.
Anadarko operates Venus with a 40% stake. Its partners in the discovery are Australia's Woodside and Repsol, each with 25%, and the UK's Tullow Oil, which holds 10%.
Tullow operates one of the licences in Ghana's Jubilee field, Africa's largest find in a decade, where discoveries in 2007 have yielded a reserves estimate of 1.8bn of recoverable oil or more. Daniels says drilling in the new frontier could uncover more fields of a similar size. The company plans to drill another two to five wells in the region next year. Its next well, to be drilled after work is completed at Venus, will be in block CI 105, offshore Ivory Coast.
Anadarko would not reveal any more details of its drilling campaign during a conference call last month. But the timing of the Ivory Coast well could be decisive for any of the majors that want to buy into the action. Another large find there and the valuations of the companies operating in the region will jump again.
After news of Venus, Anadarko's shares soared to a 52-week high in New York. Investment bank Goldman Sachs last month raised its share-price target for the firm to $60, although the price had exceeded that level as Petroleum Economist went to press. After a smaller discovery of its own last month in Uganda, shares in Tullow were also rising strongly last month. Speculation had also linked Eni with a move to buy the company, although the Italian firm was said already to have been deterred by Tullow's price.
Anadarko has considerable technical work to undertake before declaring Venus commercial. But in the meantime it is optimistic about future discoveries: Daniels even told journalists that there was a very good chance of finding another Jubilee in the new frontier. If it repeats the Venus experience, the outlook for the company, its partners, and the countries owning the waters is promising.