Summit Day 1 Digest: Talking the exploration book at Africa E&P Summit 2019 London
Exploration is back in Africa, was the message from the first day of the Africa E&P Summit, held in London. Presentations took an upbeat tone, with a particular focus on the offshore.
The Brulpadda find, in South Africa, and the SNE field, in Senegal, were cited as demonstrating the appeal of Africa, with companies drawing comparisons between these finds and various prospects around the continent’s west coast.
There is a sense of competition, though. For African exploration and development to go ahead, it requires support from the industry but also from host governments. As Standard Bank’s Paul Eardley-Taylor noted: “there is a need for speed” from countries to encourage developments. In cases where approvals drag on, for deals or projects, this casts a shadow over all aspects of the industry, even hampering new exploration plans. A failure to seize opportunities could well see other locales move ahead, with much discussion of Guyana competing for industry dollars.
Namibia is one locale where the government has proved supportive – and industry eager to seize opportunities. A slew of drilling plans are kicking into action in the Southern African state, most notably with Total planning to drill the Venus well in the Orange Basin at the end of this year.
The well, said to be the deepest ever drilled in Africa, has excited considerable excitement. “Venus shares the same source rock as Brulpadda, probably with a very similar reservoir, but likely to be better. This is a billion barrel plus target, it’s huge,” said Impact Oil and Gas’ Phil Birch. The privately held company is involved in both wells, with a direct equity stake in the Namibian licence and a funding agreement with a minor partner on the South African well.
Namibia has excited considerable interest from super majors as the industry has begun to emerge from the downturn. ExxonMobil struck a deal to take stakes in the country’s northern Namibe Basin, while also pursuing blocks on the Angolan side, in talks with Luanda. Furthermore, Royal Dutch Shell has been working with Kosmos Energy inboard from Total’s Venus plan, with seismic acquired in 2018 and plans to drill in 2021.
Senegal, home of the SNE field – and the shared Tortue LNG project, with Mauritania – is another destination seen as friendly to investors. Woodside’s Jessica Zambrano highlighted the benefits for the Senegalese people and the importance of working closely with regulators on analysis of the impacts of such a development. Where Senegal has gone, its neighbours hope to follow, with The Gambia recently awarding blocks to BP and plans for drilling in Guinea Bissau, involving FAR, in early 2020.
Amid talk of benefits for locals, two indigenous Nigerian companies – Oando Energy Resources and Seplat Petroleum – both highlighted a move into supplying gas for local demand. Seplat has never suffered as a result of local communities protesting, the company’s Effiong Okon said. “We believe in the Niger Delta, we believe in Nigeria, we believe you can do business with the right people working in communities and give back. We account for over 30% of Nigeria’s gas supply.”
While the emphasis of the African E&P Summit was clearly on exploration and production, the topic of climate change recurred in comments and speeches throughout the day. Gas may well have a part to play in efforts to reduce carbon emissions.
Kosmos Energy’s Tracey Henderson signalled as much. “If a company doesn’t have gas in its portfolio, it’s starting to say ‘how can we get this?’” Those pondering such a question may find, as Kosmos has demonstrated, that one answer can be found under African rocks.