Looking across the South Atlantic Ocean at the presalt potential offshore Brazil, oil and gas companies are hopeful that the same opportunities exist offshore West Africa. And this Atlantic breakup analogue has companies – small independents and majors, diversified and otherwise – chasing the same play in what has been called a brutally competitive environment.

Giving them confidence are finds by Cobalt International Energy, which has taken the lead in the Kwanza presalt basin with its Cameia, Mavinga, and Lontra discoveries offshore Angola. The company has drilled four wells in the northern part of the basin and has had success each time. A production test carried out by the Cameia #1 pre-salt well revealed the well could produce more than 20,000 b/d of hydrocarbons, Cobalt said.

Attention in West Africa has traditionally been in marshy areas in the Niger River delta and offshore Nigeria. However, some of the largest oil companies operating in Nigeria – including Chevron, ConocoPhillips, and Shell – are scaling back assets in Nigeria as the country grapples with crude oil theft, declining output from some fields, and revamps to its Petroleum Industry Bill, a process that has dragged on for years.

The renewed interest offshore West Africa is expected to lead to a surge of activity this year. The potential has companies devising exploration drilling campaigns offshore not only Angola but also Ghana as they test concepts in hopes of striking oil in the Transform Margin.

For Repsol, hopes are high in the Kwanza basin. In 2014, the company plans to drill three wells offshore Angola, two wells offshore Liberia, and one well offshore Namibia, said Didier Lluch, Africa exploration director for Repsol. The company also anticipates entering Gabon this year. Africa will take up a large part of Repsol’s exploration budget in 2014. Drilling a single presalt well alone could run an estimated US $120 million for the simplest well and up to $200 million for the more complex ones, depending on water and final drilling depths.

“We are going to have a lot of drilling activity to try to prove our concepts in the coming year and the year after, so there will be a real uptick in West Africa for us,” Lluch said. “If we have success there, it is going to be a huge move because Angola can be a game changer. We want to use our know-how from Brazil and all the advantages we have because of our technology.”

Repsol hopes to find at least a few hundred million barrels of oil offshore West Africa.

“The upside is unknown because it is a new play,” Lluch said. “But we believe by analogy the Kwanza can deliver as much as Brazil. We know that these countries [Brazil and Angola] have been next to each other. Therefore, they can offer the same type of play and the same kind of rewards. But this is only the beginning of this story. We will learn a lot from each well as we did and still do in Brazil because of the complexity of the geology there.”

The continental margins of Brazil and West Africa share similar statigraphic units and tectonic history due to their proximity before the split of Africa and South America in the Late Jurassic to Late Cretaceous time, according to the US Geological Survey (USGS).

“The lacustrine oils of the southern part of the Congo basin and of the Kwanza basin of West Africa were generated from brackish lacustrine source rocks and can be correlated to the Reconcavo and Alamda-Camamu basins of Brazil. Lacustrine oils from the South Gabon sub-basin also seem to correlate to oils in the Reconcavo basin of Brazil,” the USGS reported in a study on West African petroleum systems. “Migration pathways are predominantly fault-related and generally nearly vertical in the West-Central Coastal Province. Salt windows provide the major migration pathways for syn-rift oils into the post-salt reservoirs.”

Challenges demand technology

Brazil’s presalt formations are believed to hold at least 50 Bboe, according to the US Energy Information Administration (EIA). And if Angola’s presalt geology is highly comparable to Brazil’s, challenges are sure to follow. Among these are seismic and drilling obstacles considering that the potential bounty in Brazil is buried deep, below 2,000 m (6,562 ft) of water, a layer of rocks, and up to 2,000 m of shifting salt.

Technical difficulties already have plagued companies that have made discoveries in Angola’s presalt reservoir, the EIA said, adding that this should serve to temper expectations about the viability of the developments. But it is driving oil and gas companies to develop new technology or tailor existing technology in hopes of unlocking hydrocarbon reservoirs.

Repsol plans to use technology developed as part of its Kaleidoscope project, which features a supercomputer that manages complex mathematical algorithms to create high-resolution seismic images needed to see below the Earth’s surface.

“This has proved to be the key to success in Brazil. The imaging of the reservoir below the salt is extremely difficult,” Lluch said, adding the same technology is applied in the US Gulf of Mexico (GoM) where salt is present. Kaleidoscope imaging also is used to help ensure wells are properly positioned. “We do know that this is also key to success in Angola.”

The Repsol Sherlock project, combining experts and out-of-the-box thinkers with a suite of high-technology rock analysis tools – a unique combination not available in the market – was recently used in two unconventional licenses in Morocco.

“We took a lot of cores to analyze the potential of the source rock called the Silurian hot shale, which is basically the source rock that fed most of the fields in Algeria and Libya,” Lluch said. “We are also using the Sherlock project in Brazil, especially because the presalt carbonate reservoir is rather difficult to understand. We will also use it in Angola, which will allow us to draw conclusions on both sides and see the differences. The Kaleidoscope and Sherlock projects are two keys for our understanding of the geology of West Africa.”

Geir Tungesvik, senior vice president of drilling and well technologies for Statoil, said, “To us, West Africa’s challenges are pretty much comparable with Brazil.”

At Statoil’s largest heavy crude oil field, Peregrino offshore Brazil, the company is using horizontal drilling techniques applied at other sites such as the North Sea’s Grane heavy oil field. The technology, according to Sta-toil, allows several wells to be drilled from the same position, and it improves field drainage nearly 2,300 m (7,546 ft) beneath the seabed.

Plans are for 30 horizontal oil producers and seven injection wells to be drilled on Peregrino from two platforms with a ship between the two to receive and process the wellstreams. “Because it’s so heavy and viscous, oil will flow less easily than water through the Peregrino reservoir. The wellstream will therefore contain a high proportion of water, with substantial treatment capacity needed to deal with it,” Statoil reported on its website. “Heating the wellstream in huge tanks on the production ship will make it easier to separate the water, which will then be pumped back to the reservoir. That maintains pressure and helps draw oil with it back to the production wells.”

Use of horizontal drilling has in turn boosted recovery from about 10% to 20% at Peregrino. “This is very promising,” Tungesvik said.

Statoil has operated in Angola for more than 20 years; however, the presalt play is a new frontier. Statoil-operated presalt assets include blocks 38 and 39, and the company is a partner in three additional presalt blocks.

Tungesvik said he thinks Statoil will start drilling in the presalt blocks in April. “We know there are a lot of challenges. We will try to be as prepared as possible. We have done all of the seismic interpretation, and we have picked where we want to drill,” he said. “The rig will be available in April. But there are some tough salts. So trying to find the right solutions is extremely important.”

Gabon, others entice

The years 2014 and 2015 are going to be key years for exploration in West Africa not only for Repsol but for all the companies that are involved in the same presalt play in Angola, Lluch said. “More recently, the industry has shown more interest for deep offshore Gabon, where the same carbonate reservoir could be present.”

Looking at the Transform Margin, companies are chasing Cretaceous turbidites from Ghana up to Sierra Leone, he added. Repsol and Anadarko were among the first to enter this play in these areas. Repsol is targeting oil not only offshore Angola but also offshore Namibia, Gabon, Sierra Leone, and Liberia.

“The interesting thing about this country is that other companies will be active in Liberia,” he said. “You’ve got Exxon, Eni, and Chevron. Many companies will drill wells in the near future, so it will be interesting to see the outcome. We have already fulfilled our commitment in Block 15 in Liberia. We also fulfilled our commitment in Sierra Leone. The key activity and core activity for us there in the coming year will be in Block 10.”

Kosmos Energy anticipates making a return to the Transform Margin in 2014. The company takes a streamlined approach to operations, targeting a specific geographic region – the Atlantic Margin, central Atlantic with Morocco, and lower Atlantic.

Following the success of its Jubilee discovery in Ghana, Kosmos has tweaked its portfolio, building around the Cretaceous stratigraphic and subsalt/presalt plays. “It’s not our play. It’s the industry’s play. It got exported from the gulf [GoM] to Brazil to Angola and now Gabon,” Kosmos CEO Brian Maxted said during a technical update. He added there are only two presalt basins left to drill – offshore Nova Scotia and offshore Morocco. Kosmos has opted for Morocco given the country’s attractive contract terms and warmer, less windy offshore environment.

During what Kosmos deemed the “first inning,” everybody was exploring Nigeria and Angola. “We go out and play the Cretaceous and Transform Margin. What you’ll see now is a similar setup but doing some different things than the rest of the industry. Our opportunity window keeps getting narrower and narrower. What we’re finding is as soon as we go to a place we find a lot of the rest of the industry is coming close in behind us.”

Second-inning work for Kosmos has included acquiring more than $100 million worth of seismic data, including offshore Mauritania, which is the company’s first attempt to return to the Transform Margin in search of the next giant Cretaceous combination stratigraphic trap.

“We are particularly pumped up about that opportunity,” said Maxted. “We think there are another two or three opportunities that we have already seen along that margin that we are aggressively chasing as new ventures.”

Kosmos said its northwest Africa portfolio contains acreage that could offer significant frontier basin opportunities. The area includes three large potential petroleum systems – Morocco’s offshore Agadir (North) basin and offshore Aaiun (South) basin along with Mauritania’s salt basin – each holding multibillion barrel potential. All three basins will be tested with multiple wells in 2014 to 2015.

The company aims to drill its first well offshore Mauritania in the West Africa Transform Margin in late 2015. Already, a 2-D and 3-D seismic program has been completed, according to information presented during the technical update. The early seismic results were called “very encouraging.”

Proven track record evolves

Overall, Kosmos’ drilling program during the next three years includes at least eight wells, but that could grow to 13, far less than that of some of the giants seeking hydrocarbon pay in some of the same areas.

“When you are working in frontier and emerging basins, the key differences between winners and losers is not how many [wells] you drill. It’s been proven time and again that to do exploration by statistics, yes, it can be successful, but it’s not going to lead to low finding costs,” Maxted said. “If you are going to drill 15 dry holes and one success, you have got to burden the finding costs of that success with the 15 dry holes. So our approach for efficiency is to do a lot of homework, make some big bets on a few choices, have a concentrated portfolio, and then drill a handful of wells.”

The company has an emerging/frontier basin petroleum system success rate of one in five. Evidence of what is possible when a company gets it right can be seen in Ghana, the site of Kosmos’ colossal Jubilee discovery in 2007. The field is operated by partner Tullow. Anadarko also has interest in the project.

“In Ghana, we’re dealing with eight hydrocarbon discoveries now,” Kosmos COO Darrell McKenna said during the technical update. “They are all in various stages of development and appraisal. In a nutshell, the big headline is we’re dealing with 2 Bbbl to 4 Bbbl of oil in place, in all of the eight discoveries. So it’s a substantial size.”

Well deliverability exceeds FPSO capacity at the Jubilee field, with average production consistently above 100,000 b/d and well deliverability at 155,000 b/d. The well productivity/reservoir issue experienced during Phase 1 has been resolved, as acid treatments have restored productivity and the near-wellbore scaling issue has been addressed. Additionally, Kosmos said use of horizontal wells has the potential to lower the well count and maximize recovery. The first Jubilee horizontal well was completed in the Phase 1A program with tubing constrained at 27,500 b/d of oil.

The high-value barrels found in multiple discoveries – Mahogany oil, Teak oil and gas condensate, and Akasa oil discoveries, will be tied back into the Jubilee FPSO unit, Kosmos said. The latest appraisal activity includes reports of strong flow rates from the Akasa-1 drillstem test and completion of the Akasa-2A appraisal, with plans for additional appraisal activity in 2014.

More than 82 MMbbl have been produced, said Eric Haas, senior vice president for production and technical services at Kosmos. He added that they have advertised ultimate recovery to be 600 MMbbl, which could be evaluated upward with successful implementation of EOR techniques and horizontal drilling.

The plan of development for Kosmos and partners’ deep-water Tweneboa, Enyenra, and Ntomme (TEN) complex also is progressing given its approval by the government of Ghana. “All the major contracts have been let for the TEN development. The FPSO is in the shipyard in Singapore under construction as we speak. So it looks like we are still on track for our midyear 2016 first production for TEN,” McKenna said.

Phase 1, which requires a capital commitment of $4 billion, includes 17 wells with first oil anticipated in mid-2016. Phase 2 includes seven wells with first oil in 2018.

“From a Ghana perspective we are in a position where we have a tremendous amount of reservoir and production info. So we can see farther into the future in terms of what that offers,” Maxted said. “After three years into production, 82 MMbbl as of today, we have really started to understand what the real Jubilee field and the Ghana asset as a whole offers. And it is significantly more of an opportunity than conveyed and articulated in the market up to this point.”