Cameroon Ready To Start Exploring Bakassi Peninsula
Cameroon, after its recent victory over Nigeria for ownership of the Bakassi Peninsula, is now trying to entice oil majors with incentives to increase exploration activities in the area. Cameroon is now reviewing its petroleum laws to back up the proposed incentives. The country is banking on exploitation of resources in the area to shore up its depleting hydrocarbon reserves.
Cameroon state owned oil company, Societe Nationale de Hydocarbures (SNH) put total capital expenditure on exploration and production this year at "several tens of millions of dollars as against just a few millions last year." The country is seeking to reverse a yearly five percent decline in oil production, currently estimated at 110,000 barrels per day.
The review of the laws would see the government maintaining a 65 percent production split in its favor and production costs calculated at an average $3.5 per barrel. It also seeks to replace the country's 1964 petroleum law that divided the contractual requirement into the 'convention of establishment' between the state and the company and the 'contract of association', which fleshed out that relationship.
The SNH is banking on recently completed studies by French Institute of Petroleum consultant, Beicip, and UK geophysical outfits, ECL and Robertson Research International, which maintain that these offshore deepwater area hold substantial oil gas reserves. Areas of particular interest are the Douala deep and Rio del Rey. Cameroon started production in 1977 with 318 wells drilled to date. The majority of Cameroon's production comes from ConocoPhillips, TotalFinaElf and Shell.