There is never a lack of activity off Angola, it seems. Both Total and BP announced discoveries on Blocks 31 and 32 recently. Total announced its tenth and eleventh oil discoveries on Block 32 and BP announced its fourteenth discovery on Block 31.
Drilled in 1,594 m of water by the Leiv Eiriksson semisubmersible, Total's Cominhos-1 well encountered Upper and Lower Oligocene oil bearing reservoirs. The well was tested from a selected Lower Oligocene interval and produced at a rate of 6,258 b/d 32° API. This discovery is located in the northeastern part of Block 32.
The Leiv Eiriksson also drilled Total's eleventh discovery in 1,806 m of water. The Louro-1 well found both Miocene and Oligocene oil bearing reservoirs. This discovery is located in the Southern part of Block 32. The semisubmersible is under contract with Total until September 2007.
These discoveries and others this year will help revive Total after a decline in reserves in recent years. As Africa's second leading foreign oil producer, Total is pumping 719,000 boe/d. In addition, exploration in new frontiers will secure its future, which the company is targeting at 5% annual growth through 2010.
BP got in on the action too. The GlobalSantaFe drillship, Jack Ryan, drilled the Cordelia well in 2,308 m of water to 4,040 m TVD. The well was tested at an operationally restricted flow rate of 2,063 b/d through a 20/64 in. choke.
The Jack Ryan is now in Nigeria undergoing modifications until early June. It will work for Total when completed.
Both Total and BP are evaluating the discoveries and others found on the same blocks. Once a production plan is established and the fields come online, they will significantly contribute to the country's overall output.
Angola's production is expected to increase from 1.5 MMb/d to 2 MMb/d in the next year. Total's Dalia Field, which came online in December 2006 and is pumping 240,000 b/d and BP's Greater Plutonio Project on Block 18, which is due online later this year, will contribute to this growth.
Fortunately for Angola's four foreign operators, Angola is not expected to be regulated by OPEC for another year or two, which would put off, for a little while at least, OPEC's impact on the operator's production (and revenue) shares.
However, for foreign operators, the rise in services costs could be a deterrent when taking a risk to drill in these frontier regions, in the hopes of securing key reserves.
In April, 19 of the 20 rigs in the region were working for an average day rate of $200,823. Of those rigs, there are three drillships, six jackups, eight semisubmersibles, and two tenders. Five years ago, there were only 14 rigs working off Angola at an average day rate of $103,173.
Pride International has the most rigs contracted with one jackup, two semisubmersibles, two drillships, and one tender, earning an average of $185,233 a day. However, Ocean Rig ASA is earning $373,000 a day for just one rig, a semisubmersible.
Chevron is the leading operator in terms of rigs off Angola. It is contracting five jackups, two semisubmersibles and two tenders at an average day rate of $122,478. Earlier this year the company announced a significant discovery on Block 14, the block's tenth discovery since 1997.
ExxonMobil, the leading foreign oil producer off West Africa, is paying the highest average dayrate of $387,500 for two semisubmersibles off Angola.
As for Total and BP who recently made discoveries off Angola, Total has contracts for three drillships and two semisubmersibles and is paying an average day rate of $285,820. BP has just one contract for a semisubmersible at $169,500 per day.
As long as Angola can avoid OPEC's production restrictions, the foreign operators are poised for tremendous growth in the next year or so. Discoveries from BP's Block 31 and Total's Block 32 will no doubt continue, as well as further discoveries on Chevron's Block 14 and perhaps on blocks not yet explored.
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