Benin basin off Nigeria could get first substantial development with oil/GTL project

Sept. 3, 2004
A Nigerian independent is searching for a partner or partners to appraise a 1996 discovery that could become the first major field development in the Benin basin off western Nigeria.

Alan Petzet
Chief Editor-Exploration and Economics

HOUSTON, Sept. 3 -- A Nigerian independent is searching for a partner or partners to appraise a 1996 discovery that could become the first major field development in the Benin basin off western Nigeria.

Recent prestack depth migration (PSDM) of seismic data over the Aje oil and gas/condensate discovery on 454,000-acre OML 113 indicates a far larger structure than previously appreciated.

Yinka Folawiyo Petroleum Co. Ltd., private Lagos independent and operator of OML 113 with 100% interest, has signed a heads of agreement with Syntroleum Corp., Tulsa, Okla., that could lead to delineation drilling and, if warranted, the deployment of a gas-to-liquids (GTL) barge to develop a large gas accumulation.

Aje, 40 miles southwest of Lagos, is 80 miles north of the nearest discoveries in the Tertiary Niger Delta on OPL 209. The only other production in the Benin basin has come from Seme field, off Benin 10 miles west of Aje. Seme produced 21° oil from thick Cretaceous (Turonian) sands.

Aje accumulation
Two long-reach wells in 328 ft of water drilled in 1996-97 discovered and partly delineated Aje, 15 miles off westernmost Nigeria.

The two bottomhole locations are in 1,800 ft of water off the shelf edge.

Aje-1 stabilized at 2,389 b/d of light oil from 37 ft of net pay in an oil leg and flowed at combined rates of 60 MMcfd of gas and 1,729 b/d of condensate from three drillstem tests in the 157 ft of net pay in the overlying gas cap, all in Turonian sands.

Aje-2 confirmed the Turonian accumulations and discovered a deeper Cenomanian pay interval that stabilized at 3,866 b/d of 44° gravity oil and 6.7 MMcfd of gas.

The short tests, at 6,700-8,000 ft below sea level, were designed to determine reservoir deliverability, not areal extent. The accumulations are in 300 to 5,000 ft of water.

The wells were suspended as future producers.

Syntroleum and Sovereign Oil & Gas Co., Houston, acquired and reprocessed the seismic, which confirmed a large four-way dipping anticlinal closure. The PSDM results show a 12,000-acre structure updip from the tested wells, Sovereign said.

The reprocessing indicated that the first two wells are near the field's downdip edge and that an Aje-3 crestal appraisal well should penetrate the reservoirs 400 ft updip to the productive zones.

Yinka Folawiyo said it recognizes more gas-prone exploration targets on trend with Aje on OML 113.

OML 113's term runs through July 2018 and may be extended.

Project concept
The heads of agreement calls for Syntroleum to bring in an offshore operating partner to drill Aje-3.

Yinka Folawiyo would assign OML 113 participating interests and technical operatorship to Syntroleum and the industry participant under commercial agreements and with government approval.

Aje-3 would cost $10 million and if successful could demonstrate production capacity of 20,000-40,000 b/e of crude and condensate plus 20,000 b/d of GTL products and natural gas liquids.

The gas volume needed to produce 20,000 b/d of GTL products is 177 MMcfd, Sovereign said.

A successful result at Aje-3 would require Syntroleum and the partner to drill one more appraisal well.

Despite the uncertain as to field size and recoverable volumes, Aje development options include a fixed platform in shallow water and/or a floating production, storage, and offloading vessel with subsea tiebacks from wells in 3,000-5,000 ft of water.

Syntroleum considers that the GTL barge concept has advanced to the point of being ready for construction (OGJ Online, Mar. 1, 2004).

Syntroleum said, "The Aje field project economics could be additionally enhanced by Nigeria's fiscal incentives for gas, designed to encourage natural gas development projects, including GTL.

"As a further economic plus, all GTL volumes produced from OML 113 would be exempt from inclusion within Nigeria's OPEC quota under current rules."