Equatorial Guinea opens deepwater round

Dec. 14, 1998
Equatorial Guinea's Ministry of Mines and Energy has opened a licensing round that includes all the country's offshore territory in more than 200 m of water. Operators have until May 10, 1999, to submit bids for the blocks, considered by Exploration Consultants Ltd., Henley-on-Thames, U.K., to be one of the world's prime deepwater exploration areas. Richard Bray, senior geologist at Exploration Consultants, said the area on offer includes the northern end of a geological trend that

Equatorial Guinea's Ministry of Mines and Energy has opened a licensing round that includes all the country's offshore territory in more than 200 m of water.

Operators have until May 10, 1999, to submit bids for the blocks, considered by Exploration Consultants Ltd., Henley-on-Thames, U.K., to be one of the world's prime deepwater exploration areas.

Hot trend

Richard Bray, senior geologist at Exploration Consultants, said the area on offer includes the northern end of a geological trend that recently has provided major finds off Angola and Gabon.

This trend is said to be characterized by deepwater fans and provides prospects similar to other hot plays off West Africa. Exploration Consultants is also promoting deepwater acreage off Namibia, at the southern end of the geological trend (OGJ, May 4, 1998, p. 48).

Bray said that some seismic lines extend from Equatorial Guinea's shallow-water producing area out into the deep water, but that a recent speculative acquisition of 7,800 line km of 2D seismic data by Western Geophysical Corp.'s London unit was the region's first comprehensive survey.

The seismic data will be made available on a nonexclusive basis, and Exploration Consultants has prepared a data package for the licensing round on behalf of the ministry.

Bray said that water depths in the new acreage mainly are 200-2,000 m, with depths up to 3,000 m at the outer limit of the area. There has been no drilling in the deepwater area so far.

The Western Geophysical data have revealed prospects similar to others in deepwater plays off West Africa, the consultant said, although no blocks had been upgraded in relation to the others on the basis of initial analysis.

While some of the blocks are at the end of the prolific geological trend down the west coast of the continent, the northernmost deepwater blocks include a continuation of the Niger Delta formations.

License terms

Exploration Consultants said that license conditions will be set according to the country's newly revised hydrocarbons law.

This limits royalties to 10-16%: "Bidders are invited to define the royalty increments between these limits relative to daily production rates."

The new legislation replaces the rate of return formula for production-sharing in previous licenses with a more conventional cost oil limit and resultant profit oil sharing, in steps according to cumulative production, the consultant said: "Bidders are invited to specify these parameters."

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