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East Africa earned a high ranking on the world list of interesting areas as higher activity levels by major oil companies and recent discoveries by independents make the area look a lot more attractive.
Speaking at an IHS Inc. regional energy conference in Houston, Melanie McQuinn, IHS analyst, took audience members on a short tour of the action.
South Africa has one new exploration block that closed in September.
To the north in Mozambique, several fields are producing, and some blocks still are available through negotiation with the government.
The activity is stronger in the Mozambique-Tanzania Ruvuma Basin. Hydro and Petronas are acquiring geophysical data, and Anadarko Petroleum with Artumas has spotted 100 exploration leads. In the same area, Aminex started a major seismic shoot covering the onshore Ruvuma Basin in Tanzania and its Manja license in Madagascar to set up its 2008 drilling campaign.
To date, only two wells have been drilled on the Mozambique side of the basin.
Tanzania has aggressively marketed its oil and gas opportunities, and independents cautiously stepped in to make their own evaluations. Maurel & Prom chalked up a success with its Mkuranga-1 gas discovery. That well tested at rates to 20 Mcf/d of gas and contains an estimated 30 million boe. The discovery will give Tanzania production from Mnazi Bay to the south, Songo Songo Island and Mkuranga.
Aminex plans to start drilling on its Nyuni license offshore Tanzania near Songo Songo gas field this month with the Kiliwani-1 well after delays in delivery of the drilling rig.
A lot of the nation’s offshore territory is under lease to oil and gas companies, McQuinn said. Some of those offshore blocks hold an unrisked potential as high as 426 million bbl of oil.
To the north onshore in Kenya, operators include CNOOC, Origin, Aminex, Woodside and Gippsland Offshore Petroleum Ltd. with partner Pancontinental Oil & Gas NL. Gippsland and Pancontinental have conducted airborne surveys of their L-6 onshore and offshore block and found leads with a potential of 1.1 billion bbl of liquids or 5 Tcf of gas.
To date, Kenya has produced a lot of shows but no discoveries, McQuinn said.
Farther north, Uganda registered four discoveries last year. Tullow Oil plc brought in three of the discoveries, the Mputa, Nzizi and Waraga prospects on Block 2 in the Albertine Basin of eastern Uganda. The Mputa-1 tested for 1,120 b/d of oil, the Mputa-3 at 1,986 b/d of oil and the Waraga-1 at 1,200 b/d of oil. To the south on Block 3a on which Tullow is a 50% partner, Heritage Oil Corp. drilled the Kingfisher-1 discovery, which tested at a maximum rate of 13,893 b/d from four intervals.
That well has an estimated 2.1 billion bbl of oil in place, McQuinn said, and more than 1 billion bbl of potential production.
Tullow also had signed up for Democratic Republic of Congo Blocks I and II on the Congo side of the Albertine graben with Heritage Oil and Cohydro, the Congo state oil company, but that contract is in doubt as government officials said they wanted to pass a new oil and gas law before issuing licenses. Tullow insists it is confident that it followed proper licensing procedures and its licenses will hold up. The new law should reach Congo’s parliament in December.
Also in Uganda, Dominion Petroleum signed a production sharing agreements to explore Block 4B in the southwestern part of the country. That block is southeast of Lake Edward in the Eastern Rift Valley in the same sedimentary basin as Lake Albert. The company plans to invest at least US $4 million in geological and geophysical work during the first phase of its license. If it moves to the second phase, it will drill an exploratory well.
More than 30 exploration companies have applied for licenses, according to Energy Minister Daudi Migereko.
Somalia carries significant political risk, but Puntland to the north has approved some acreage for exploration by Australia’s Range Resources Ltd. ConocoPhillips and others continue to hold some acreage in Somalia but are not active now.
Madagascar, on the other hand, is extremely active. Onshore, Madagascar Oil is working toward production on its huge Tsimimoro heavy oil field and has more potential in the nearby Bemolanga tar field, but production will be expensive. ExxonMobil has licensed two large blocks off the nation’s northwestern coast, and Tullow also holds a license.
In an earlier international conference in Tokyo, Andrew Hayman with IHS offered a roundup of potential returns from investments in east African nations.