Billion-barrel fields may lie under the next promising structure.

Offshore West Africa offers exploration opportunities unparalleled in the world for those who can stand long delays to production, high entry costs and occasional bouts of political instability.

That's usually a recipe that requires the deep pockets of a major oil company. The majors have largely taken over operations offshore Nigeria and Angola, and they are heavy bidders on up to 12 billion bbl of reserves in the Sao Tome and Principe-Nigeria first licensing round.

Devon Energy, with its acquisition of Ocean Energy, is the only active independent offshore Angola, according to Antonio de Pinho, vice president of business development for Devon, speaking at the IHS Energy "Perspectives" conference in Houston, Texas.

Devon now has an exploration potential of 4 billion boe to 5 billion boe offshore Cote d'Ivoire, Nigeria, Ghana, Equatorial Guinea, Cabinda and Angola, prospects Pinho called "world class exploration acreage."

Among producing properties is the 1.1-billion-bbl Zafiro field offshore Equatorial Guinea.

At the same conference, Lyndon West, practice director for New Ventures Services with IHS Energy Consultants, called West Africa a target-rich environment.

On the plus side for West Africa, he said, the United States would like to decrease dependency on the Middle East by importing more from Africa, and Nigeria and Angola are increasing production capability rapidly.

On the down side, field development times are long. Nigeria is phasing in new fields to try and remain at its OPEC quota of 2.092 million b/d, and it's trying to raise that quota. It takes 6 to 8 years to bring a new deepwater Nigeria field on line. That period compares with Mauritania with a 3- to 4-year wait.
The cost of entry in some countries starts at US $300 million, West added.

Offsetting those factors are the very large fields discovered to date with the promise of more to come and high productivity rates, often upward to 150,000 b/d. At least six Nigerian fields promise reserves of more than 500 million bbl. Shell's resources in Nigeria's OML 118 area - Bonga - total more than 2 billion bbl.

If it's going to be a "Can-you-top-this contest," ExxonMobil is more than prepared. It has brought in its fourteenth oil discovery on Block 15 offshore Angola to raise its reserve estimate to more than 4 billion bbl of oil. The latest discovery was the Clochas-1, which tested at 1,764 b/d of oil. The company estimates it is capable of producing 5,000 b/d. That well is in 4,250 ft (1,295 m) of water. If the company includes its gross reserves in Angola, including blocks 17, 31 and 32 the reserve number climbs to 10.5 billion bbl.
Even for smaller companies, the opportunities offshore West Africa just keep coming. West, speaking about the countries on Africa's West Coast from Mauritania to Benin, listed a few opportunities:

• Nine countries have acreage available.
• Five countries have scheduled licensing rounds.
• Three countries are reviewing licensing terms.
• Eight countries plan deepwater wells in 2003 and 2004.
• Only 11 wells have been drilled in 248,400 sq miles (400,000 sq km) of deepwater acreage.
• Six countries are working on gas plans.
• Only 31 wells have been drilled in water deeper than 820 ft (250 m).
• Nineteen of those 31 wells are in two countries.
• Five countries have had no deepwater drilling.

Opportunities in Mauritania, Senegal, Gambia, Guinea Bissau, Guinea, Sierra Leone, Liberia, Cote d'Ivoire, Ghana, Togo and Benin still are on the upswing.

Among those countries, Mauritania probably offers the greatest opportunity now, West said. Its exploration potential has been proven by Woodside Petroleum's Chinguetti and Banda discoveries. "The politics are less risky (than in other areas), and the financial system is working," he said.

A smaller independent, he added, should probably look seriously at Mauritania or Cote d'Ivoire. Technical risk is increasing in Ghana because of the recent dry holes. Devon was drilling a well there in late October.

For larger independents, Hunt Oil, Canadian Natural Resources and Kerr-McGee Corp. have done some work off Cote d'Ivoire, while Premier Resources is lining up prospects in Guinea Bissau and Woodside is putting together a commercial play in Mauritania.

TGC-Nopec has started a multi-client survey covering deepwater tracts offshore Cote d'Ivoire. The company has also shot seismic offshore Sierra Leone, Liberia and Nigeria. It will use WesternGeco's Regent seismic vessel with a 10-streamer configuration for the Cote d'Ivoire shoot.

One small player, Australia's Fusion Oil & Gas, acquired Amerada Hess' 68% share in the Croix du Sud exploration license offshore in the Guinea Bissau-Senegal common zone when Amerada Hess decided not to continue on the project. Fusion plans to evaluate 3-D seismic already shot in the area before starting discussions for operations with other companies.

Africa offers good opportunities for smaller and medium-sized independents, West said. The entry costs are not cheap, but most of the country licensing programs are driven by work programs.

In addition, time to production is shorter in these nations. Canadian Natural Resources needed only 3 or 4 years to bring Baobab on line offshore Cote d'Ivoire. A typical project in Nigeria takes 8 years to bring to production.

The UK's Dana Petroleum also is in an aggressive mode offshore West Africa. The company plans its first deepwater exploration well off Mauritania to look at its Pelican prospect on Block 7. If successful, it could try to combine production with Woodside's Block 4 production. Dana also is looking at seismic data in Block 8 and it is studying the potential of a shallowwater well on the West Tano block offshore Ghana.
Operators with an interest in West Africa are watching the current first licensing round in the Sao Tome and Principe Joint Development Zone with Nigeria. With a potential for more than 8 billion bbl of oil in its offshore fields and proven high-volume production on the Nigerian side of the border, the industry expects major companies to be big bidders in the nine-block round.

One of the requirements for bidding also limited bidders. The nation would not take less than $30 million for any of the blocks. After the companies submit their bids, they will go through a negotiating round with Joint Development Zone officials.

Nigeria also has some development news as the floating production, storage and offloading (FPSO) vessel for the 600-million-bbl Bonga development was scheduled to arrive 75 miles (120 km) off the Nigerian coast in OML 118. It's the largest FPSO in the world. The massive ship can produce up to 225 million bbl of oil producing from 30 subsea wells.

At last count the company overspent its budget on the FPSO by $250 million over the original $1.3 billion.
Nigeria also expects the Mystras FPSO to arrive near the middle of next year to work block OML 119 with Okono and Okpoho fields for a joint venture of Agip Energy and natural Resources Nigeria Ltd. The fields hold some 250 million bbl of oil.

Just one example of continuing growth in deepwater discoveries offshore West Africa came from ChevronTexaco. The company said its Chevron Petroleum Nigeria Ltd. affiliate extended Usan field in OPL 222.

It drilled the Usan-4 appraisal well 3 miles (5 km) south of the discovery well in 2,460 ft (750 m) of water. The new well flowed 4,400 b/d from one zone and 6,300 b/d of oil from a second zone. According to ChevronTexaco, it confirmed commercial quantities of oil and demonstrated potential in previously untested reservoirs.

Speaking of the on-again, off-again Agbami project, ChevronTexaco plans to issue invitations to tender to six companies for the $750-million FPSO that will produce the field on OML 216 and 217 offshore Nigeria. It has chosen Aker, Daewoo, Hyundai Heavy Industries, Samsung/Amec, Saipem/Delatek and Technip for the short list.

The FPSO will have to process up to 250,000 b/d of oil and 450 MMcf/d of natural gas from wells drilled in 4,920 ft (1,500 m) of water. The company has estimated reserves at 1 billion bbl of oil.
Still another project may be in the works. ExxonMobil has spudded its last appraisal well on its Bosi prospect in Nigeria's OPL 209 before deciding how to produce up to 5 Tcf of gas reserves, according to Ogilvie's Africa Oil and Gas. It could tie subsea wells back to the Erha FPSO scheduled for installation in 2005 on the same block, or it could use a standalone FPSO.

Angola is no stranger to activity with some of the most prolific offshore blocks in Africa. As an indicator of the importance of these big-pay blocks to the major companies, BP's Lord John Browne said his company will spend $8 billion off the African nation in the next 6 years. That expenditure will go into the Greater Plutonio development on Block 18, which calls for the company to gather production from six subsea fields, Plutonio, Platina, Galio, Cromio, Paladio and Cobalto.

BP has called Greater Plutonio a $3 billion project. Even with that kind of spending, the going hasn't been easy. Each phase of the development must be approved by partner Sonangol. The Angolan national oil company continues to try to choose the cheapest form of development, while BP and other major operators hold out for the most cost-effective development plan for the life of the project.

Part of the $8 billion also will go to the company's blocks 15 and 17 and possibly 31 in deeper water.
The Angolan government has announced plans to raise its production to 1.6 million b/d by 2005, up from the 900,000 b/d it produces now.

Brazil's Petrobras also looks at Angola as a growth area. It currently holds shares in Block 2 and ultradeepwater Block 34 offshore Angola. It also has properties offshore Nigeria, including a portion of the block on which the Agbami discovery was made and on OPL 246 with the Akpo discovery. The company hopes to bring its deepwater expertise offshore Brazil to its African operations.

Offshore Equatorial Guinea, Amerada Hess still is pondering startup for FPSO operations on its Northern Block G. The company said the block holds more than 500 million bbl of recoverable oil and it is trying to figure the path to highest profit. At the last check, the company appeared to be leaning toward a dry tree unit with production tied to the company's already-operating Sendje Ceiba FPSO over Ceiba field.
Marathon Oil Co. also is active offshore Equatorial Guinea with a new discovery on its Block D, the Bococo prospect in 238 ft (73 m) of water about 6 miles (10 km) west of Alba field. The discovery well reached a 185-ft (56-m) column of net gas pay.

Every month, the success stories, along with the trials and tribulations of companies trying to work there, keep accumulating for West Africa. The trick is to allow the bonanzas to outweigh the frustrations.