Congo exploration rebound on the horizon

Status of Exploration Blocks Off Congo [9491 bytes]

Exploratory drilling off the Congo will see a resurgence the next few years as a result of that country's introduction of production sharing contract legislation in 1994 that led to a spate of license awards.

This is the view of Wood Mackenzie Consultants Ltd., Edinburgh, which noted seven exploration licenses have recently been awarded, adding to three older licenses still in effect.

Only two new field wildcat wells were drilled off the Congo each in 1994 and 1995, said the analyst, with a further two expected this year. But 1997 and 1998 are expected to see at least six wildcats drilled each year.

"The potential for significant new discoveries in Congo," said Wood Mackenzie, "especially in the deeper water areas, has recently been indicated by the success of Elf's 1 Moho Marine well."

Elf Congo is thought to have discovered Congo's largest oil field yet with this well. Wood Mackenzie estimates Moho reserves at 400 million bbl of oil and said 600 million bbl could eventually be confirmed.

Increased activity

The analyst said licensing activity has been relatively high the past couple years, with award of seven new blocks attributed to revised fiscal terms and an increase in perceived potential of pre-salt and deepwater plays.

"Most offshore acreage is now under license," said Wood Mackenzie. "By contrast, almost all onshore acreage is open."

The recent trough of exploration activity follows a peak of 18 wildcat wells drilled in 1992. Moho discovery was made in November 1995.

Deepwater acreage off Congo is seen as particularly attractive, boosted by Elf's Moho find in 800 m of water. Three of the recent blocks awarded-Marine IX, Mer Profonde Nord, and Mer Profonde Sud-are in as much as 2,000 m of water (see map, OGJ, Aug. 26, p. 30).

Four blocks-Marine IV, Marine X, Marine XI, and Marine XII-have pre-salt plays as the main attraction, said Wood Mackenzie.

"All four blocks have previously been relatively well explored in terms of post-salt potential," said the analyst. "All production off Congo is from post-salt reservoirs.

"As with the deepwater arena, the rise in interest in pre-salt potential is a result both of new play concepts and better technology. In the case of the pre-salt, technological improvements are allowing better seismic imaging of targets."

Wood Mackenzie said 11 commitment wells are to be drilled on the seven recent licenses, while Elf and Agip are planning exploratory and appraisal drilling within their development licenses and on the three oldest exploration licenses (see table).

"In 1997," said the analyst, " we predict six wildcats and four appraisal wells will be drilled, all offshore, and a similar number, perhaps even more, is expected in 1998."

Little unlicensed offshore exploration acreage remains, said Wood Mackenzie. Only the nearshore Marine III license is available, having been relinquished by Elf in October 1995.

One small discovery was made on Marine III Block, known as Tilapia. The government hopes to reoffer this acreage under special marginal field terms.

Onshore acreage open

Apart from development licenses for two minor fields, Elf's Pointe Indienne and Mengo, all the Congo's onshore acreage is open, for the first time in many years.

The three Kayes blocks were licensed in 1988 to groups led by BP Exploration Operating Co. Ltd., Chevron Corp., and Conoco Inc. These were relinquished, after disappointing results, in 1992.

Elf relinquished its onshore La Loeme permit after 22 years in September 1995, keeping the areas around the two small fields. Elf also made the small Kouakouala find here, and the government hopes to attract other companies to develop it.

In addition, said Wood Mackenzie, government has recently delineated two onshore blocks, La Noumbi and Le Kouilou, which together contain most of Congo's coastal area.

Rising production

Elf's N'Kossa field, brought on stream in June, is Congo's largest field to date. It has estimated reserves of 500 million bbl of liquids and is expected to reach plateau production of 122,000 b/d in 1998-99.

Congo's total oil reserves are estimated at 1.645 billion bbl, and production this year is expected to average 201,000 b/d, boosted by N'Kossa from a level of 169,000 b/d.

Wood Mackenzie said Agip SpA is developing Kitina and Kitina Sud fields, with estimated reserves totaling 125 million bbl of oil. These are due on stream at yearend 1997.

"These developments should help raise Congo's oil production to a new peak of around 310,000 b/d in 1999," said Wood Mackenzie. "Longer term, production will depend very much on the eventual size and development scenario of Moho."

The analyst expects Elf to undertake a phased development of Moho. First production is anticipated in 2001, with a slow buildup in production to about 120,000 b/d in 2006.