Global deepwater activity gains strength: although still running at high levels offshore Brazil and in the US Gulf of Mexico, deepwater exploration and development are showing renewed strength offshore the UK, Southeast Asia and selected other countries

World Oil, Nov, 2005 by Melissa A. Manning

So far in 2005, deepwater E&P activity has been steady, as operators move to extract resources and capitalize on higher oil and gas prices. Rig availability has tightened, sending prices spiraling. Increasing day rates and a lack of available crews challenge operators, but the industry is moving forward with cautious optimism.

According to IHS Energy's databases, 10 of 20 deepwater discoveries greater than 100 million boe in 2004 were offshore Africa, with three in Angola; one in Angola/the Congo; one in the Congo; two in Nigeria; one in Mauritania and two in Egypt. Following Africa, Malaysia (three discoveries), India (two) and the US (two) were most successful in striking new finds. The largest oil discoveries were in Malaysia, the US and Brazil. The largest finds for 2004, however, were both gas discoveries, in Australia and Egypt.

As 2005 draws to a close, a question arises--has West Africa's bubble burst? Success rates there are falling, and key, dry wells occurred in deep water during 2005. There were no 250-million-plus boe discoveries made off West Africa in 2004. After the string of finds during 1997 and 1998, there were disappointments.

While we still await updates on a couple of key wells, the possibility exists that no deepwater finds of more than 250 million boe were made off West Africa during the last two years. Of 12 possible 250-million-boe discoveries made so far in 2005, only two are in deep water.

In Asia, India has seen deepwater success, although some reserve numbers are questionable. And 2005 has been a productive year for China, where three major oil finds greater than 250 million bbls were struck.

Resource additions from major discoveries. In common with all years from 1999 onwards, over 50% of all major discoveries in 2004 were made in water depths greater than 655 ft, Fig. 1. The proportion of deepwater successes was significantly less than the 69% record achieved in 2003. Thirteen finds were made in water depths greater than 1,000 m (3,280 ft). Four of these came from water depths of more than 2,000 m (6,560 ft). Although 57% of 2004's major discoveries came from deep water, these finds accounted for only 44% of the discovered resources.

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Global deepwater forecast. Deepwater oil/liquids production in the Golden Triangle formed by the US Gulf of Mexico, Brazil and West Africa should grow from around 2.9 million bpd in 2004 to about 7.1 million bpd by 2009, Fig. 2. Brazil accounts for a significant portion of current deepwater production, at 1.4 million bopd. This should grow to nearly 2.4 million bopd in 2009. The US Gulf of Mexico, producing about 1.0 million bopd from deepwater fields in late 2004, is forecast to be producing around 2.1 million bopd in 2009. Impressive growth is forecast from West African deepwater fields in Angola and Nigeria.

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AFRICA

In 2005, exploration drilling offshore Angola has focused on deep/ultra-deep waters in the Congo Fan, with seven wildcats drilled to TD by BP, ExxonMobil and Total. BP and Total succeeded in Blocks 31 and 32, respectively. ExxonMobil apparently failed to find additional resources on Block 33. The size and proximity of new Congo Fan oil discoveries has prompted operators to plan joint development schemes at several fields.

BP hit three oil finds in southeastern Block 31 with wildcats Astraea 1, Ceres 1 and Juno 1. To date, the company has hit eight oil discoveries on Block 31, four in the northeastern part and four in the southeastern portion, providing the opportunity for two joint development projects.

Total discovered oil with wildcat Gengibre 1, bringing the number of Block 32 finds to four. The discovery was appraised and may integrate a joint development project along with the previous Gindungo 1, Canela 1 and Cola 1 finds. Of three ExxonMobil wells on Block 33, only Calulu 1 was a discovery. ExxonMobil brought the Kizomba B development project onstream in Block 15. With Kizomba B, Angola has surpassed the 1.2-milllion-bopd mark, and it appears that ExxonMobil is now the country's leading producer, ahead of Chevron.

Plans were announced for a licensing round late in 2005. It will include seven blocks--1, 5 and 6 on the shelf of the Lower Congo and Kwanza basins; Blocks 15, 17 and 18 (excluding development areas) in deep water of the Lower Congo basin; and deepwater Block 26 in the Benguela sub-basin. National oil firm Sonangol has asked IHS Energy to assist with this effort.

Chevron conducted appraisal drilling in the Common Interest Zone between Angola and Congo (ZIC 14k/A-IMI). The firm drilled KX-3, a two-legged appraisal on the Lianzi structure. Murphy has drilled three wildcats on the Met Profonde Sud (MPS) exploration permit in 2005 to date, one resulting in an oil discovery. Azurite Marine 1 encountered more than 160 ft of net oil pay that may contain more than 100 million bbls of oil. Drilling of an appraisal was underway as this article went to press.

Total E&P Congo will share the Leiv Eiriksson semi-submersible with Total E&P Angola under a firm, six-well contract with Ocean Rig--three wells in Congo and three wells in Angola. Congo operations appear to be on new prospects in the Mer Tres Profonde Sud exploration permit. With the sanctioning of the deepwater Moho-Bilondo project, Total has awarded its first development contracts.