OWI2 18WCA MAR 7-8

OFFSHORE WELL INTERVENTION WORKSHOP, WEST COAST OF AFRICA

West Coast of Africa Well

Intervention Market Overview
Sam Scarpa, Offshore Network

INTRODUCTION

With oil reserves of 129.1 billion barrels, Africa holds 7.6% of the world’s proven
reserves. More specifically, the West Coast of Africa is home to the continent’s
two largest producing countries, Nigeria and Angola, while Equatorial Guinea, the
Congo and Gabon have proven oil reserves not dissimilar to those found in the
United Kingdom.1

While the West Coast of Africa has been on the radar of many well intervention
contractors for a while, it is fair to say that workover and P&A activity has
recently been ramping up all the way from Mauritania to Angola. A multitude of
factors can be linked to this increase in well work projects, including:

• Regulatory Imperatives: As West African nations develop their oil & gas
regimes, more scrutiny is being applied to operators to ensure they truly
maximise the value of their assets during production and make sure that
both financial and operational plans are put in place for safe P&A and
decommissioning activities.
• Oil Price: As in other parts of the world, the current oil price has led to a
decrease in drilling activity and is forcing operators to look at their existing well
stock for ways of increasing production and maximising ROI.
• Technology: While investment is still being pumped into exploration projects
throughout the region (BP announced a US$1bn partnership with Kosmos
in Mauritania and Senegal2 and 8 of the top-20 discoveries in 2015 were
in Africa3), regional and international operators are looking at innovative 1. BP Statistical Review of World Energy 2016,
technologies that will lower the cost of well intervention and increase the Energy Information Administration (USA) (EIA),
Websearch, The LNG Industry GIIGNL Report,
efficiency of operations for existing fields. 2016 Edition, Rystad Energy
2. http://www.oilreviewafrica.com/aaccpp/
This paper is designed to outline well intervention and P&A opportunities DigitalMagDownload/ORA_1_2017_Final.
available to contractors in the West Coast of Africa by analysing regional levels pdf p.36
of activity, operator well stock and major projects. 3. https://www.pwc.co.za/en/assets/pdf/oil-
and-gas-review-2016.pdf

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WEST AFRICAN WELL
WORK HOT SPOTS

MAURITANIA
After being named one of the top 4 exploration
hot spots in 2013 by BNP Paribas, Mauritania
has recently seen major offshore investments
from the likes of BP and Total. While these fields
remain at exploration stages, Mauritania is also
witnessing a wave of decommissioning activity
at the Chinguetti field following the exit of
Petronas due to falling oil prices.

Government Representation: Ministry of

Petroleum, Energy and Mines

GHANA
Ghana’s offshore basins cover approximately
60,000 km² with offshore exploration dating
back to the 1970’s. Ghana’s mainly deepwater
assets include the Jubilee field where first oil
was achieved in December 2010 following
discovery in 2007. Main players include Tullow,
Hess and Eni.

Government Representation: Ghana National

Petroleum Corporation (GNPC)

CAMEROON
Offering both shallow and deepwater fields, Cameroon
continues to emerge as a key African economy with the
industrial port of Douala an important gateway to most
of Central and West Africa. Perenco and Addax Petroleum
are two of the main players with Perenco performing an
important number of well interventions each year.5

Government Representation: National Oil Company, SNH

ANGOLA
With 75% of oil production coming from mainly deepwater
offshore fields, estimates show Angola currently boasts
9.5 billion barrels of proven oil reserves and 11 trillion
cubic feet of natural gas. BP describes Angola as one of
its most important assets in its E&P portfolio4 while the
Angolan continental shelf is the largest contributor to
Statoil’s oil production outside Norway.6

Government Representation: Ministry of Petroleum &

Sonangol EP

4. https://www.bp.com/en_za/southern-africa/bp-in-southern-africa/Angola/Projects.html
5. http://www.perenco.com/cameroon
6. https://www.statoil.com/en/where-we-are/angola.html

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WEST AFRICAN WELL
WORK HOT SPOTS

NIGERIA
As the largest producer in Africa, Nigeria hosts
international majors including Shell, Chevron,
ExxonMobil and Total and is one of the few West
African countries to boast both shallow and
deepwater assets, as well as onshore fields.

Government Representation: Department of

Petroleum Resources (DPR) & Nigerian National
Petroleum Corporation (NNPC)

EQUATORIAL GUINEA
With exploration dating back to the 1990’s,
Equatorial Guinea hosts a number of operators
including Mobil Equatorial Guinea (MEGI),
Hess, Marathon and Noble Energy. Stringent
decommissioning rules and several ultra-
deepwater wells make Equatorial Guinea
a country to look out for when it comes to
upcoming activity.

Government Representation: Ministry of

Mines, Industry and Energy (MMIE) & GEPetrol

GABON
According to the Oil & Gas Year, Gabon’s 19
deepwater plays cover an area of 128,000 km,
or just over 50% of the country’s total acreage.
These are operated by 10 companies, including
players such as Marathon Oil, Total, Perenco,
Ophir and Vaalco.

Government Representation: Ministry of

Petroleum and Hydrocarbons & Gabon Oil
Company (GOC)

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 PROVEN OIL RESERVES IN THOUSAND
MILLION BARRELS

50 48

Proven reserves Thousand million

barrels
40 37.1 USA 48
Nigeria 37.1
China 25.7
30
25.7 Angola 11.6
Mexico 8
20 Norway 7.6
Thousand million barrels

Indonesia 3.3
11.6
UK 2.5
10 8 7.6 Gabon 2
3.3 2.5 Congo 1.6
2 1.6 1.1
0 Equatorial Guinea 1.1
A

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US

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PRODUCTION IN THOUSANDS OF BARRELS

PER DAY
Production Thousand barrels
daily
Brazil 2605
3000 Nigeria 2053
05
26

Norway 1995
2500
Production in thousands of barrels per day*

53

Angola 1807
5
20

9
19

07

2000 UK 1013
18

Australia 359
1500
Equatorial Guinea 280
13
10

1000 Congo 238

Gabon 227
500
9

Total World 92150

35

7
28

23

22

Total Africa 7892

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Source: BP Statistical Review of World Energy - June 2017

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ZOOM IN ON PROJECTS

[MAURITANIA] CHINGUETTI FIELD P&A

Discovered by Woodside Petroleum in 2001, the deepwater
Chinguetti oilfield lies in 800m of water, about 80km west
of the Mauritanian coastline and 90km from the capital,
Nouakchott. The field was sold in 2007 and Petronas took
over as the operator as part of a JV with Tullow Oil, SMHPM,
Premier, and Kufpec. It was then announced in 2016 that due
to low oil prices, options to decommission the field would
be explored following discussion with the Government of
Mauritania and relevant stakeholders. In June 2017, progress
was made when PBJV was appointed to provide of a well
intervention vessel, platform supply vessel and associated
services for temporary P&A of 15 wells at both the Chinguetti
and Banda fields.7 More to follow…

[NIGERIA] OYO-8 WELL LWI

The Erin Energy-owned Oyo Field is located approximately
75 km off the coast of Nigeria in water depths ranging from
200 to 500 meters. Production started in December 2009
however a sub-surface controlled safety valve recently
failed to re-open following a planned production curtailment
at the Oyo-8 well. Erin Energy then contracted the Island
Constructor light well intervention vessel which mobilized
from Norway in March 2016. After a successful intervention
to open the valve, Erin Energy announced production had
re-started at the Oyo-8 well.8 The company anticipated
production would return to its pre-shut-in levels of around
7,000 barrels of oil per day.

[NIGERIA] BONGA RISERLESS SUBSEA LIVE WELL

INTERVENTION
It was announced in May 2017 that the Cross Group had completed
a 7-well live well intervention and P&A project offshore Nigeria for
SNEPCO using its 7-1/16” 10,000-psi subsea convertible live well
intervention package and dual open water coiled tubing lines.9
The project took place at the Bonga field in water depths up to 3,300
feet using a Dynamic Positioning Multi-Purpose Support Vessel.

[CAMEROON] PERENCO WELL INTERVENTION PROGRAM

Perenco is currently the largest operator in Cameroon with
operations extending over 6 000 km² in the Rio del Rey and Douala
basins. According to their website, the company maintains production
and optimises recovery with several well interventions each year. In
fact, “various teams are permanently dedicated to the work-over of
wells, perforating new reservoirs, performing acid stimulation and
optimising the water injection in the numerous reservoirs operated”.10
7. http://www.offshore-mag.com/articles/2017/06/pbjv-
to-handle-p-a-program-offshore-mauritania.html
8. http://www.islandoffshore.com/media/news-
archive/2016/island-constructor-assisting-erin-
energy-back-on-track-in-nigeria
9. https://www.linkedin.com/pulse/cross-group-
completes-riserless-subsea-live-well-heath-jones/
10. http://www.perenco.com/cameroon

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ZOOM IN ON PROJECTS

[SENEGAL/ GUINEA-BISSAU] M&A ACTIVITY

In March 2017, Chinese crude oil producer CNOOC
took over operatorship of the offshore AGC Profond
block located in the joint development zone between
Senegal and Guinea-Bissau in water depths ranging
from 1,400m to 3,700m. The farm out agreement
with Impact Oil & Gas gives CNOOC a 65% participating
interest in a Production Sharing Contract (PSC) and
associated joint operating agreement.11

[GHANA] OFFSHORE INVESTMENT

The UK’S export credit agency UK Export Finance has
announced it will provide a loan of US $400mn for the
development of offshore gas fields in Ghana, its first
direct loan for a project in Africa.12

[ANGOLA] XIKOMBA FIELD DECOMMISSIONING

Discovered in 1999, ExxonMobil’s Xikomba deepwater field is located in Block 15,
approximately 370km north-west of Luanda in water depths of up to 1,480m. The
nine-well subsea development included four production wells, four water injection
wells and a gas injection well.13 Following first oil in 2003, peak production flowed at
a rate of 90,000 bpd however in 2011, ExxonMobil announced that production would
end and decommissioning of the wells/structure would start. This does not however
mean the end of production in Block 15 since it also hosts the company’s Kizomba
sister developments.14

[GHANA] SALTPOND OIL FIELD DECOMMISSIONING

Following a consistent production decline since 2015, the Saltpond Oil Field, which is
located about 65 miles west of Accra and had been producing oil since the 1970s, is
set to be decommissioned. In 2016, Michael Aryeetey, Chief Operating Officer GNPC
explained that studies were underway to assess the cost of decommissioning the field
and that the project formed part of GNPC’s short term plans.15

11. http://www.offshoreenergytoday.com/cnooc-takes-operatorship-of-west-african-block/
12. Oil Review Africa, Volume 12, Issue 1 2017, p.10
13. http://www.offshore-technology.com/projects/xikomba/
14. http://www.petroleumafrica.com/angola-xikomba-fields-life-cycle-ends/
15. https://www.graphic.com.gh/business/business-news/saltpond-oil-field-faces-closure.html

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ZOOM IN ON WELLS

GHANA: JUBILEE FIELD CAMEROON: RIO DEL REY

LOCATION: 60km offshore between the LOCATION: The Rio del Rey fields lie within the Rio
Deepwater Tano and West Cape Three Points del Rey Basin, which is an eastern extension of the
blocks in Ghana prolific Niger Delta Basin.
DEPTH: approx. 1,100m DEPTH: 0-70 metres
DISCOVERY: Discovered in 2007 by the OPERATOR: Perenco
Mahogany-1 (M-1) and Hyedua-1 (H-1)
exploration wells
OPERATOR: Tullow

NIGERIA: BONGA NORTH WEST FIELD EQUATORIAL GUINEA: ZAFIRO FIELD

LOCATION: Oil mining lease (OML) 118, LOCATION: Zafiro is located in the 500,000-acre
approximately 120km off the Nigerian coast Block B, 68km (42 miles) WNW of Bioko island,
Equatorial Guinea
DEPTH: More than 1,000 metres
DEPTH: 420 - 850m
PRODUCTION: The Bonga North West
development began producing vital energy DISCOVERY: The Zafiro-1 discovery well was
resources in August 201416 drilled in 1995
OPERATOR: SNEPCo (Shell) OPERATOR: Mobil Equatorial Guinea Inc.
(ExxonMobil)

16. http://www.shell.com/about-us/major-projects/bonga-north-west.html

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CONCLUSION

The multitude of companies operating and investing offshore, combined with a lack of regional
service providers in some countries, offers a chance to secure one of a kind projects from
operators keen to make the most out their assets. The West Coast of Africa is therefore ripe for
opportunities for regional and international contractors.

While mobilisation costs remain high, an increase in the scope of work brought about by
collaboration and discussion between operators could mean an uplift in demand for a range of
services including:

• LWI vessels
• Riserless technology
• Coiled tubing
• Downhole tools
• Rigs and vessels of opportunity
• Cementing technology
• Data logging tools
• Well integrity management systems
• Intelligent well services
Increasing well intervention activity in both shallow and deepwater fields during all stages of the
assets’ lifecycle could thus be the key to future profitable well intervention business development
opportunities for contractors as well as an uplift in productivity for operators keen to extend the
production life of profitable assets ahead of P&A.

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