The Agbami field proved better than the major probably expected, and will mean development costs are likely to be around US $4.5 billion. However, its rewards will far outweigh the investment.
Agbami's title as the new giant of West Africa is no mean feat, as the region boasts some of the biggest discoveries worldwide in recent years. The field structure itself was found to span an area of 45,000 acres and extends from the original Block 216 into Norwegian Statoil's neighboring Block 217.
Texaco is hoping for further good news from the block soon as the drillship Glomar Explorer has now moved 13 miles west to test another prospect - Ikija-1X - which was due to be spudded as Hart's E&P went to press. Two further delineation wells will also be drilled on Agbami later in the year.
This is unlikely to change the development process, with Mustang Intec expected to complete a front end
engineering and design contract by the end of the first quarter of this year. The engineering, procurement, installation and construction contracts expected to be awarded by midyear.
Texaco had originally hoped on a phased fast-track development starting with a leased FPSO and first production in 2001. However, sources suggest as much as the company wanted to do this, it was going to prove too expensive and the scenario is now simply a large FPSO (or possibly two) with a dry completion unit looking for first production in late 2003.
Production will peak at around 200,000 b/d - Texaco's current global output is around 900,000 b/d, and the find will help ease talk that the company would have to have made an acquisition soon in order to fill what would have otherwise been a looming hole in its future production profile.
Contractors that Texaco is already talking to about the development received faxes mid-January asking them in for further discussions.
But Texaco's president of worldwide exploration and production, John O'Connor, warned: "With only two wells on a structure of this size there will be a lot of evolution as time goes forward...it will be an FPSO with subsea wells manifolded back." The company hopes to reinject all gas.
O'Connor also said that the recoverable reserves figure is based on a "relatively modest" estimate of 25% to 30% of oil in place.
Texaco has interests in a total of five deepwater blocks offshore Nigeria. In Block 216 the interest owners are Famfa Oil (an independent Nigerian oil company), operator Texaco's wholly owned affiliate Star Deep Water Petroleum Limited (technical adviser), and Brazilian state firm Petrobras. In Block 217 the interest owners are Statoil (operator) and Texaco Nigeria Outer Shelf Ltd. Texaco also has interests in Blocks 213, 215 and 218 (which contains the Nnwa discovery). All of the blocks will have at least one well drilled next year.

New licensing round
The find will no doubt boost interest in a new deepwater licensing round set to be touted internationally in the near future. Nigerian government officials may have buckled under intense lobbying from local independents, Hart's E&P hears. This will allow them to re-enter the bidding arena for deep water blocks in the country's forthcoming licensing round.
The blocks became infamous last year after they were awarded to indigenous companies under a discretionary basis - awards that were later rescinded by the country's leader, Abdulsalami Abubakar, for being uncompetitive.
Emerging details on the new bidding round, believed to have been rescheduled possibly for later this month, show that the independents may also be allowed to bid for concessions in four other sedimentary basins.
Officials say no fewer than 52 open blocks in the Benue Trough, Benin Anambra, Niger Delta and deep/ultra-deep basins are to be put out for bidding.
Informed sources say in order for the independents to be eligible for the bidding process they will have to show a working arrangement or partnership with a foreign technical partner: "They will need to submit joint bids with their foreign partners," an official said.
Multinationals will have to show financial and technical competence to be prequalified according to conditions stipulated in guidelines being worked upon by the Department of Petroleum Resources.
Other conditions for participation in the bidding exercise, which will cover open blocks in the basins, include:
l A nonrefundable application fee of US $50,000
l A pro forma tender fee of $10,000
l Payment of $50,000 to access relevant seismic data for deep/ultra-deep offshore blocks
l Payment of $25,000 to access relevant data for onshore/shallow offshore blocks
The cost of "outright purchase of seismic data is to be determined by the existing cost structure in acquisition of such geological information," according to the proposed guideline.

Angola
In Angola, meanwhile, national oil company Sonangol is increasingly flexing its muscles and showing operators who really holds the reins of power in the country.
Exxon, and now Chevron, too, have been surprised to find Sonangol using its legal right and forcing the companies to look at alternative development scenarios rather than just being able to force through their own ideas with less consultation than they would have liked.
There are two schools of thought as to the reason for the change in policy, and both appear to be right. The first is that Sonangol doesn't want to wake up in 15 years time only to feel used and abused with all the majors having slipped away after seemingly creaming off the lion's share of oil wealth from the country. "Looking to the future...as it (the Angolan oil sector) matures it will welcome and need the independents. As the size of discoveries decreases majors lose interest, by way of example 10 years ago Gabon was dominated by Shell and Elf," Ranger Oil's vice president international Phillip Dimmock recently warned.
The other reason is quite simply money - Sonangol was not happy about the massive cost overruns on Elf's Girassol field and wants to ensure that operators take time and spend money early on in design to save money later.
Exxon was the first to feel Sonangol's might over the giant Kizombo development.
Exxon had originally hoped to follow the route outlined by a study in conjunction with Aker, which concentrated on a spar wellhead platform tied back to an FPSO. But Sonangol put its foot down and forced the US giant to go out for a full FEED.
The FEED was eventually awarded just recently to a relatively new entrant to the country - Brown & Root, alongside IHC Caland. The development in Block 15 could contain more than 2 billion bbl of reserves, with FEED work getting underway last month. The study will add to normal work by including the likes of drilling, a design competition for the hull and dry completion units.
Other discoveries in the block include Xikomba, Chocalho, Kissanje, Dikanza, Hungo and Marimba.
And Chevron is now imminently issuing invitations for a FEED for its Benguela and Belize development. The company's initial design was for a dry completion unit handling a total of more than 25 wells. It was hoping to avoid the design competition - but Sonangol decided otherwise. A contract will soon be awarded, with contenders including Aker, Mustang, ABB and Brown & Root.
Participants in Angola should not be disheartened, however, especially the above-mentioned Chevron, with the news that Angola saw its first ever deepwater crude production from the US operator's Kuito field.
Production from the 12 subsea wells will be sent to and treated on the FPSO Kuito with an initial rate of 50,000 b/d. Kuito, at a depth of 400m in Block 14, was discovered in May 1997, and production of the low sulphur crude will peak at 100,000 b/d in the first quarter of this year before falling back to average production of 75,000 b/d.
A subsea water injection system, installed in conjunction with the initial subsea production system and controlled aboard the FPSO, will enhance production from the field. Water injection will begin mid-2000.
Once startup and commissioning is complete this month, no natural gas will be flared at Kuito. Natural gas, which is present in the reservoir and produced in association with the crude oil, will either be used as fuel for the FPSO or reinjected into the reservoir. The development work on Kuito was performed by Coflexip Stena Offshore, ABB and SBM.
Partners in 4,000sq km Block 14 are Cabinda Gulf Oil (a Chevron affiliate) with 31%, while Agip, national oil company Sonangol and TotalFina all have 20% and Portuguese national oil company Petrogal owns the remaining 9%.