WEST AFRICAN E&D ACTIVITY ON THE RISE

Exploratory drilling in Central West Africa in 1991 should equal or exceed high levels seen in 1990, says County NatWest WoodMac, Edinburgh. In 1990, 78 wells were drilled in Angola, Zaire, Congo, Gabon, Equatorial Guinea, and Cameroon, the second highest figure on record.

Feb. 25, 1991

2 min read

Exploratory drilling in Central West Africa in 1991 should equal or exceed high levels seen in 1990, says County NatWest WoodMac, Edinburgh.

In 1990, 78 wells were drilled in Angola, Zaire, Congo, Gabon, Equatorial Guinea, and Cameroon, the second highest figure on record.

The outlook is for continued strong levels of exploration in the years to come because huge areas are still to come up for license. These include onshore and off Angola, onshore Gabon, and the onshore Cuvette basin in Congo and Zaire. Very little offshore exploration has occurred in waters deeper than 330 ft in the region.

Development action in Central West Africa also is likely to increase this year. The analysts estimate development capital outlays will jump in 1991 to $1.05 billion from $970 million last year.

Central West Africa is one of the few regions outside the Middle East where oil production is still rising. County NatWest estimates the region's oil output will climb to 1.12 million b/d by 1992 based on known discoveries alone-from 1.07 million b/d in 1990. The analyst notes recent discoveries will probably allow this upward trend to continue into the mid-1990s.

REASONS FOR OPTIMISM

County Natwest cites reasons for optimism over Central West Africa's future:

Apart from the large amounts of unlicensed acreage, discoveries have been made in frontier areas, and new plays are being worked in established areas.
Offshore exploration and development are cheaper than onshore. In the shallow waters development costs are about $2/bbl compared with $5/bbl in the North Sea.
One of the previous deterrents to company activity in the region, the rigid attitude of governments, is changing. Oil ministries are becoming more familiar with the needs of foreign oil companies, which eases negotiations.
There is a more stable fiscal and regulatory framework with enough flexibility to allow for negotiations over marginal developments.