China’s CNOOC Ltd has signed up to explore two blocks in Gabon, the 11th contract signed since the country brought in its new hydrocarbon code.
Gabonese Minister of Mines, Petroleum, Hydrocarbons and Gas Noël Mboumba announced the signing with the Chinese company, saying this demonstrated the effectiveness of the government’s diversification plans.
According to local reports, CNOOC Africa Holding has the BC9 04-224 and BCD10 04-225 blocks, covering 13,540 square km, offshore the Ogooué-Maritime province. The Chinese unit has agreed to invest $30 million on the deepwater blocks. The agreement was signed by Mboumba and CNOOC International’s senior manager Vitalis Chick.
Talks have been going on for three years. The offshore blocks were previously held by Shell, which sold off its mature onshore Gabonese production to Carlyle Group’s Assala Energy in 2017.
Africa is becoming an increasingly important part of CNOOC’s portfolio, with production roughly doubling in the first three quarters of 2019, compared with the same period in 2018. This was driven largely by the 200,000 barrel per day Egina field, in Nigeria.
CNOOC acquired a 25% stake in the two blocks in 2012. In 2014, Shell announced a substantial gas discovery at the Leopard-1 well, which found 200 metres of net gas pay in a pre-salt reservoir, on the BCD10 block. This was drilled in water depths of 2,110 metres.
Gabon has also approved ONE-Dyas’ holding of the Kowe block recently. At the beginning of the week, the company said it had concluded talks with the government. As a result, it will hold Kowe under a single tax regime until the end of 2036.
The block covers the Tchatamba complex, which consists of three fields: Tchatamba Marin, Tchatamba South and Tchatamba West. It is around 20 km offshore and is in water depths of 100 metres. Kowe is operated by Perenco.
BW Energy is also pressing ahead with developments in the country, at its Dussafu licence. The company, closely linked to floating production, storage and offloading (FPSO) unit provider BW Offshore, took a final investment decision (FID) on its Ruche plan this month. This should contribute another 15,000 bpd of oil to the BW Adolo unit, starting in late 2021.
The new hydrocarbons code was put into effect in July of this year, providing lower tax for gas projects and reducing the amount required to be held by the state in licences. It also improves the terms for cost recovery. Petronas was the first to take advantage of the new law, signing two contracts in August. This was followed in October with the award of seven contracts to Assala.
In addition to improving contract terms, Gabon is also taking action on corruption. A number of officials have been arrested this month, including the president’s spokesman. A scandal involving timber smuggling came to light in May, which were followed shortly after by the removal of the country’s vice president and forestry minister from office.