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Angola's deepwater Kwanza Basin may remain a duster
by Fred Akanni, Lagos
(11/12/2002) The deepwater segment off the geographical expression named Angola has been
the great exploration story of the last decade of the 20th Century. Six
billion barrels of oil were proven by some 40 wells in the space of five
years. The country's oil reserves jumped from 5.5 billion bbl in 1995 to
12.5 billion bbl today. Angola's production has increased by 33% from
750,000 in 2000 to 950,000 b/d now. Most of these finds were made in the
Congo fan, the deepwater segment of the Lower Congo Basin.
As oil majors reported find after spectacular find, investors rushed to get
a piece of the action. In 1999, the Angolan government received signature
bonuses of US$300 million on each of three ultra deepwater leases in the
Lower Congo Basin. This was clearly an indication that investors were
bullish on Angolan deepwater, but as exploration efforts moved southward to
the Kwanza Basin, the momentum has diminished.
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The Sag Basin stretching from Angola's Block 17 in the north to Block 22 in
the south and from the coast at Luanda outward into Block 33. |
Of the seven wells drilled so far - two on Block 21, one on Block 22, two on
Block 24, and two on Block 25 - only one of them found oil. Even then, it is
a noncommercial discovery.
Sembe-1 was the first to be drilled by ExxonMobil on Block 24. It was
abandoned on 29 April 2001 at a TD of 3,746 ft measured depth, after testing
a combined 3,039 b/d of oil from two reservoirs. Eova-1, the second well by
ExxonMobil on the same lease, also encountered sub-commercial, thin oil
bearing zones. It was plugged and abandoned at 4,072 measured depth. Agip's
first effort, Leao-1, located on Block 25, was bone dry and was plugged and
abandoned. BHP-Billiton also plugged and abandoned its Iona-1, its first
well on Block 21 for lack of hydrocarbons at 3,081 m. The company then went
on to drill Kangandala-1, which also turned out to be dry and was abandoned
it at 2,517m on March 3, 2002. ChevronTexaco drilled Serrado Moco-1, its
only well on Block 22, and abandoned it dry at a depth of 2,530m on March 22
of this year. Agip's second well, Jaguar-1, was also abandoned for lack of
hydrocarbons.
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| Generalized stratigraphic column (yellow indicates sandstone). |
"These wells were drilled on the best prospects, which were outlined by
state-of-the-art 3D seismic data, " said an analyst at Wood Mackenzie, "so
the message coming out is not encouraging."
Most operators are re-evaluating their strategy, but TotalFinaElf had long
ago decided not to drill. The company would rather pay a penalty for not
drilling a well it was committed to drill under the PSC contract. BHP
Billiton is more cautious. It is currently working on a go-forward strategy.
One thing it is sure of is that it will not extend the PSC when it expires.
ChevronTexaco is mum about what it might do. The company has two obligation
wells. And one thing is clear: by paying a penalty to the government it is
possible not to drill the second well.
Considering that the Angolan oil industry took off in the 1950s from the
onshore/shallow-offshore Kwanza Basin, it is ironic that the deepwater
segment is not clicking. Which brings us to the question: Does the overall
performance of the drillbit in onshore and shelf parts of the Kwanza Basin
give us a clue to the seeming barreness of the deepwater?
In a sense it does, but this is geology, which deals with unpredictable
dynamics of nature, so there's need to differentiate between the onshore
Kwanza Basin and its extension into the shallow-water area versus the
deepwater Kwanza Basin.
The history of the basin is quite interesting. Beginning in the late 1950s
in the onshore Kwanza Basin, a number of small fields were discovered. They
all occur in the Pinda equivalent Catumbela carbonate with the exception of
the Cacuaco Field, which produced from a thin pre-salt sandstone, and the
Quenguela North Field, which produced out of Miocene sandstones. Estimated
production from these fields was about 80 million bbl. They are now
abandoned.
Various operators tried to find similar production in the shallow offshore
areas. Conoco (now ConocoPhillips) and Total (now TotalFinaElf) drilled
about eight dry holes in Block 6 whereas about 10 dry holes were drilled in
Block 7 by various operators, and two dry holes by Total on Block 8, and
about six dry holes on Block 9 were drilled by Cities Services and more
recently by Texaco (now ChevronTexaco). Nothing commercial was discovered.
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The Sedco 700 (left) drilling the Mexilhao-1, and The Jim Cunningham drilling ExxonMobil's Semba-1 |
It is difficult to know for sure why the basin is fizzling out, but one of
the key ingredients that led to the success of the Congo Basin is that it is
offshore to the ancestral Congo River which has one of the largest drainage
areas of the world, thus pumping an enormous amount of sediments, including
sandstones and conglomerates, and organic matter into the deepwater Congo
Basin. As a consequence, you have the ideal combination of source and
reservoir rocks. In the case of the Kwanza Basin, no such Congo River
appears to have existed; indeed, there were not any rivers that might have
been even a quarter the size of the Congo River. So that might be the
problem that is plaguing the Kwanza Basin - not enough source rocks in some
cases and in other cases not enough reservoir rocks.
When Girassol was discovered in 1996, many companies were hoping that
similar-sized fields in the Tertiary in the deepwater portion of the Kwanza
Basin would be discovered, and that led to the rush of companies in
acquiring blocks there in 1998.
One company that has the most to lose if the Kwanza Basin turns out to be a
total dud is ExxonMobil. It has working interests in all of the Kwanza Basin
blocks including 25% in Block 25, a high 50% in Block 24, 25% in Block 22,
and 20% in Block 21. But no one needs to shed tears for ExxonMobil - it
currently has interests in nine deepwater blocks offshore Angola covering 11
million gross acres and has announced 22 discoveries since 1996.
ExxonMobil's share of the 200,000 b/d of oil from Girassol is netting 40,000
b/d. And it has a 40% stake in Block 15, which has a reported 3.5 billion
bboe in reserves.
For other operators, especially the independents who are casting about for a
lease in the Gulf of Guinea, the lack of success in Kwanza Basin is sending
a shadow over the Namibe Basin as well. Had there been success in the Kwanza
Basin, there would have been a rush of companies negotiating for blocks in
the Namibe Basin, but that is certainly not the case now.
Click below for related reports:
Angola's deepwater phenomena
ExxonMobil to farmout Angola Blocks 24, 25, 32
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