Operators will have their pick of prime acreage to choose from this year and next as more countries join the race to become provinces for deepwater exploration.

A new series of licensing rounds is expected to increase deepwater activity worldwide. Areas of West Africa and Brazil - already favorites among major deepwater players - are expected to top the wish list in upcoming rounds. But the rounds also contain deepwater acreage in largely or completely untested areas such as Cuba, Honduras and Malta.
Brazil
Brazil's Agencia Nacional do Petroleo (ANP) has unveiled details of its third and perhaps most hotly contested onshore and offshore licensing round.
The country's third round opened in December with publication of an initial tender protocol. Fifty-three blocks - 31 in deep water - in 12 basins are being made available for award in May or June (Table 1). In addition, former state operator Petrobras will offer some of its own blocks to international companies on a joint venture basis. Big discoveries offshore Brazil have been par for the course in deep water. Three have been made in the deepwater Campos Basin within a week of one another, one by Petrobras and two by Shell. Any new territory offered in Brazil is, therefore, bound to attract big interest.
Cuba
As an opening shot, Repsol-YPF struck a deal with the Cuban government just before the turn of last year to license a deepwater block in the near-virgin Gulf of Mexico off Cuba. Repsol declined to give much detail about its block, except to say it is in partnership with Cuba's state oil company, Cubapetroleo (Cupet), and that the area involved is off the country's northwest coast. The agreement also covers cooperation in the upstream and downstream sectors, including Repsol's assistance with development of natural gas. At the time of the Repsol agreement, Manuel Marrero, of Cuba's Basic Industry Ministry, said up to four other "important companies" were negotiating over leasing further blocks for exploration in the Gulf. Marrero predicted one other company would sign for a block in Cuba's 43,243-sq mile (112,000-sq km) Exclusive Economic Zone before the end of the first quarter of this year, and a second company would sign by midyear.
Shell, TotalFinaElf, Agip, Norsk Hydro, Premier Oil and British Borneo have been cited as potential participants in Cuban acreage. Prospects there will have been boosted by an exploration well spudded by Petrobras, designated Felipe-1X, 91 miles (30 km) north of Cuba's central Ciego de Avila province. Although seismic survey has identified a 700 million-bbl prospect, results from the well were not expected before the start of this month.
However, while Cuba might offer good prospectivity for the future, American statutes prevent domestic US companies from engaging themselves in business with Castro's Cuba.
Honduras
Honduras was due to open its first exploration licensing round shortly after press time. Seven companies have expressed interest in acreage that is to be offered, said Rina Rodriguez, director of the General Mines and Hydrocarbons Directorate in Honduras. Although the minister did not name the companies said to be interested in the round, she indicated one is from Mexico, another is from Canada, and another is from Colombia. Areas to be offered for licensing are north of Honduras.
The industry had expected deep water off the east coast of Trinidad, out to 9,843 ft (3,000 m), to become available too, but little has happened since data packages were produced a year ago.
Northwest Europe
The UK Department of Trade and Industry (DTI) issued invitations to bid for the 19th offshore licensing round in early November. Most of this acreage is in deep water, adjacent to the median line with the Faeroes Islands, and the final date for the submission of applications - which includes a fee of US $4,090 (£2,820) per application - was Feb. 27.
This was a much anticipated round, significantly delayed by the UK government's need to ensure the legislation surrounding the round complied with a European Union Habitats Directive that seeks to protect the offshore environment. Originally, the DTI argued it did not need to comply with the directive because domestic legislation more than covered the points raised in the directive. However, the issue was tested in the High Court - in an action brought by Greenpeace - and the DTI lost. Consequently, the government had to spend considerable time amending legislation before it was able to issue invitations for the round. Furthermore, in November 2000, a DTI official suggested the government would be looking to open the 20th round before the end of this year. That round will include acreage at the northern part of the UK Continental Shelf and North Sea, toward Greenland, the source added. Acreage involved in the 20th round will be deep water - about 1,640 ft (500 m).
Across the North Sea, the Norwegian Petroleum Directorate is canvassing areas operators might wish to see covered in a 17th licensing round due to take place next year. Invitations to nominate areas of interest are expected this spring, with a tentative plan for awards to be made in spring 2002.
Greenland launched its own licensing round by inviting oil companies to nominate blocks for inclusion in a 2001 licensing round offshore west Greenland, between 63°N and 68°N.
Greenland's Bureau of Minerals and Petroleum (BMP) announced in 1999 the decision to launch the round, and the deadline for submissions on this territory is March 26. Greenland hopes to set a deadline of Oct. 1 for block license applications. BMP has sought to make data as accessible as possible by offering to lease a comprehensive seismic package that draws on resources from TGS-Nopec, the Geological Survey of Greenland and Denmark (GEUS) and Nunaoil. Exploration in Greenland hasn't been a big success, with Norwegian state operator Statoil drilling a dry hole with its Quelleq-1 well in a water depth of 3,3370 ft (1,156 m) on the Fylla license area last year. This was the first well drilled offshore Greenland in 20 years. ("Greenland going for greenfield prospects," Hart's E&P, January 2001, p. 87)
Seismic activity offshore Greenland has been more intensive, with three vessels operating off west and northwest Greenland in summer 2000. TGS-Nopec acquired 3,912 miles (6,300 km) of nonexclusive seismic data using the Zephyr 1. The BMP paid for an 832-mile (1,340-km) survey over Baffin Bay using the vessel Thetis, which also was used by Phillips Petroleum for acquisition in the Sisimiut-West license. GEUS acquired more than 1,677 miles (2,700 km) of high-resolution data in the waters around Nuussuaq using the research vessel Dana.
Offshore Ireland is expected to see some activity soon with the imminent publication of areas to be offered by the Eire's Petroleum Affairs Division within the Department of Marine and Natural Resources. This will feature the eastern flank of the Rockall Trough and the Porcupine Basin area down to what is called the Goban Spur on the Atlantic Margin. The round is expected to open this month and close in December.
Geographically thousands of miles away, but culturally and historically connected to the United Kingdom, the Falkland Islands in the south Atlantic are forecast for more exploration after an open-door licensing policy was introduced there just before Christmas. This new policy includes areas southwest of the islands, including the area designated as a zone of special cooperation between the Falklands and Argentina set up following the 1982 war over the islands' sovereignty. The belief is that the Falklands and Argentina may license their own parts of the offshore there, where it just edges into deepwater with depths around 1,640 ft (500 m).
Mediterranean
Late last year, TGS-Nopec began a nonexclusive 2-D program offshore Malta covering 5,589 miles (9,000 km) and examining some of the deep trenches in the Sicily Channel with water depths to 4,922 ft (1,500 m) as well as most of the Maltese continental shelf. A 621-mile (1,000-km) contract survey covering Hardman Resources' License Area 3, encompassing blocks 4 and 5, also will be incorporated in the survey, which should be finished this month. Data should become available this quarter. The Zephyr 1 seismic vessel undertook the acquisition program, after completing a program offshore Greenland. Seismic surveys had been conducted through some licenses up until the beginning of the 1990s, but TGS has secured a deal with the Maltese authorities to upgrade all of the country's shelf with nonexclusive data. "There is a big interest from companies now, but there is not a large commitment level," a TGS spokesman said. He added several companies have been waiting for new seismic.
Portugal may launch a round this year or next, depending on the outcome of a seismic survey initiated by TGS-Nopec. The survey covers depths ranging from 328 ft to 9,840 ft (100 m to 3,000 m). Designated Portugal Deep 2000, the survey was started by the Zephyr 1 vessel late last year.
Depending on the outcome of drilling activity in the eastern Mediterranean and Nile Delta, several other places in the region could launch bids for operators' exploration cash, including Cyprus. "The Cypriots are putting some form of exploration legislation together now. They have a deepwater extension of the Nile Delta," according to Spectrum Energy and Information Technology in the United Kingdom. "They are looking at doing something there next year."
Spectrum believes the eastern Mediterranean is opening up, and the company is considering the area for survey work. New seismic shoots for up to 16 countries bordering the sea are under evaluation.
Of particular note is the deepwater part of the Spanish Mediterranean, which has an open-door licensing policy. Repsol already has its Casablanca field in production offshore Spain, but Spectrum sees potential in the Ebro elta, a deepwater extension of the Casablanca field.
Other interesting areas are the Rhone delta offshore France, the Provenance Basin, the Balearic Islands, Mallorca, Menorca and Sardinia.
"All of that is starting to be of interest," Spectrum said. "Basically there are large amounts of unexplored basins that converge (in the Mediterranean), and they have never really been looked at. It is a climatically nice area to work in, there are salt upthrows which can give nice structures for traps, and it is an area that is not considered too deep." Water depths in this area range from 4,920 ft to 8,200 ft (1,500 m to 2,500 m). Advantages for petroleum explorers include a large domestic market nearby. "There is a lot of infrastructure for transporting oil and gas existing or being planned, and with a few exceptions, a large part of the area is very, very underexplored. The central Mediterranean is not desperately interesting - it is bit tectonically complicated - but the east and west Mediterranean has a lot of sediments," Spectrum said.
Asia, Far East
India has made available eight deepwater blocks on its western coast in the second round of its New Exploration and Licensing Policy, which features 25 blocks. Bids must be submitted by March 31. The deepwater blocks stretch from the coast of Mumbai to Kerala-Konkon. India's state-owned Oil and Natural Gas Corp., which recently identified 20 international operators as potential technical collaborators, made a deepwater gas discovery in the Krishna-Godavari Basin, which bolstered prospects for the region.
Officials in Indonesia are keen to increase the rate at which production-sharing contracts are offered to exploration companies. In particular the Makassar Straits area, east of the island of Kalimantan, is attracting interest, and Unocal met with considerable exploration success there in 2000. Therefore, further areas in Indonesian waters are expected to become available. Up to six blocks in the Makassar Strait region are due to be offered.
Brunei may be another potential hot spot, with 3,861 sq miles (10,000 sq km) up for grabs in a new licensing round. This acreage is a deepwater extension of a known shallowwater play, according to PGS, from Brunei's northwest coast up to 200 nautical miles (371 km) out into the South China Sea toward what is locally known as the Rifleman Bank. PGS is covering all of this territory with a multiclient 3-D acquisition program. "It will be a popular round if the number of companies interested in the data is anything to go by. We also expect this round to generate deepwater interest farther along the coast," said PGS.
The petroleum unit within the Sultanate of Brunei's prime minister's department is said to be preparing a new round for October, and the anticipated deadline for bids will be Nov. 1.
Africa
Given the size of deepwater discoveries, West Africa is sure to see further acreage offerings during the next couple of years. Nigeria, Angola's Kwanza Basin, Namibia, Ghana, Cote d'Ivoire, Mozambique and Madagascar have either awarded new blocks or are about to release new tracts of offshore territory. With awards for one round - which saw 51 companies bidding and 22 blocks awarded - having just been announced, Nigeria is set to launch another licensing program shortly, and talk is under way about the acreage to be included. The next Nigerian round may include blocks from the eastern border with Equatorial Guinea to the outermost limits of the Niger Delta. The latest Nigerian round saw eight deep offshore blocks awarded (Table 2).
Egypt has seen an upsurge in activity in the past few years. This is, in part, due to the exploration success enjoyed by BG with its Scarab and Saffron gas fields. Two wells drilled offshore Palestine, Gaza Marine 1 and 2, the latter being a successful appraisal, have no doubt encouraged BG. Further licensing in Egypt will focus on deep water in the Nile Delta, but this has hit a hitch. Egypt's licensing authority, the EGPC, originally had intended to offer four more blocks - A1, A2 (Matruh), D1 and D2 (northwest Mediterranean) - spanning about 19,305 sq miles (50,000 sq km) each, in water depths ranging from 2,624 ft to 9,843 ft (800 m to 3,000m). But just before the deadline for bids on these four attractive blocks - which are adjacent to BG's successful West Delta Deep Marine concession - were due to close, the EGPC moved the date from Nov. 15, 2000, to June 28, 2001. Egypt is expected to launch a 2001 bid round covering acreage in the northern end of the Red Sea and the southern end of the Sinai desert. Other acreage, including the southern end of the Gulf of Suez, is due to become available in this round, according to Spectrum. The water depths involved range between 3,280 ft and 3,900 ft (1,000 m and 1,200 m).
Morocco's first offshore licensing round has launched with an application deadline of April 30. Eight blocks are on offer, covering 12,004 sq miles (31,090 sq km) in water depths up to 9,842 ft (3,000 m) off Morocco's Atlantic coastline from Rabat to Safi. Newly introduced petroleum licensing legislation prompted some industry observers to note the Moroccan fiscal regime was among the most attractive in the world. Within the eight blocks, seismic surveys have identified nine deepwater prospects, and eight had "robust economics" based on floating production solutions. TGS-Nopec shot some 4,813 miles (7,750 km) of new seismic across the deepwater Rabat-Safi sector, and an interpretation report will be ready by the end of October.
"The decision to launch a bidding round at this time is based on the interpretation of 4,813 miles (7,750 km) of seismic which was shot earlier this year," Onarep Director General Amina Benkhadra said. "The seismic data provides good indication of prospective deepwater and shallowwater plays. In addition we have significantly reduced the tax burden."
Another African nation, Tanzania, opened its doors to the international E&P community with a licensing round at the end of 2000. Covering water depths from 1,000 ft to 10,500 ft (300 m to 3,200 m) on Africa's east coast, the offering comprises six blocks over 24,700 sq miles (64,050 sq km) in a tranche offshore the capital Dar Es Salaam southward to Mtwara.
Liberia is not to be excluded from the rush either, with a round planned this year. TGS-Nopec kicked off a 5,900-mile (9,500-km) 2-D survey from Liberia to Ivory Coast for which some prefunding was received. The launch of the Liberian round is anticipated in mid-2001.
Moving to the southernmost tip of the continent, South Africa is gradually moving toward the release of more acreage, with a deal between Global Energy Holdings of Denver, Colo., and the Petroleum Agency of South Africa. This agreement, for blocks 3b and 4b off the northwest coast, where water depths are between 984 ft and 4,921 ft (300 m and 1,500 m), was reached last year, and Global has a year to bring the prospect to drillable status.
Geologically, the region is thought to be similar to the plays offshore Angola.