The new discovery offshore Equatorial Guinea’s Block 1 by US-based exploration and production company Noble Energy puts the West African country on the road to reversing declining oil and gas output should the project be turned into a viable commercial venture.
Equatorial Guinea’s mines and hydrocarbons minister Gabriel Obiang Lima was quoted this week saying the discovery of oil after drilling of the Aseng 6P well up to 4,000m “could not have come at a more opportune time."
By 2015, Equatorial Guinea’s hydrocarbon activity had declined by 8.9% and with the country’s overall economy dropping by 7.5% placing pressure on the “government’s fiscal position, requiring the government to rely on external borrowing and government savings to meet deficit financing needs,” according to the US Energy Information Administration (EIA).
“Emphasis on the oil and natural gas industries has also led to the lack of development in non-hydrocarbon sectors,” said EIA.
Falling oil production in Equatorial Guinea, with an estimated 1.1 billion barrels of proved crude oil reserves as of January 2017, started being realized in 2016 when average output of petroleum and other liquids averaged 244,000 barrels per day (b/d) “which is lower than its peak production of 375,000 b/d in 2005.”
The Aseng discovery comes a few months after Equatorial Guinea launched its 2019 Oil and Gas Licensing Round comprising 27 blocks that include 25 for exploration and two for appraisal/development of hydrocarbons under production sharing contracts.
Prospective oil and gas companies interested in participating in the bidding, excluding those already operating in Equatorial Guinea, have until September 23 of this year to submit their proposals, nearly five months after the process commenced. The preferred bidders are expected to be announced at the end of November.
"When companies drill offshore Equatorial Guinea their likelihood for a discovery is real," Lima was quoted saying.
Furthermore, Noble Energy had last April made a final investment decision (FID) on the Alen gas monetization project in Equatorial Guinea with startup planned for the first half of 2021. Gas from the Alen field will be processed through existing facilities on Bioko Island according to previous company reports.
At Aseng, where Noble Energy is the operator with Glencore, Gunvor and Atlas Petroleum as partners.
Up until December 2018, Noble Energy had 355bcf of proved developed natural gas in Equatorial Guinea in addition to the 26 million barrels of crude oil and condensate.
Moreover, the company has another 2bcf of proved undeveloped natural gas and three million barrels of crude oil and condensate in the OPEC member country according to the company’s reports.
Noble Energy has 40% operated working interest and 38% revenue interest in Aseng field, the company commenced production in 2011 with the development comprising “five horizontal producing wells flowing to the Aseng floating production, storage and offloading vessel (FPSO) where the crude oil is stored until sold, and natural gas and water are reinjected into the reservoir to maintain pressure and maximize crude oil recoveries.”
Noble estimated the 2018 oil sales volumes from the Aseng field to be six thousand barrels/day net with the “Aseng FPSO designed to act as a crude oil production hub, as well as a liquids storage and offloading facility, with capabilities to support future subsea oil field developments in the area.”
“Since it first came online, the Aseng field has maintained reliable performance, averaging almost 100% production uptime and, as of December 31, 2018, has produced over 95 million barrels of cumulative gross crude oil production,” said Noble in its latest annual report.
The discovery of the Aseng also comes nearly eight months after Noble submitted to the Equatorial Guinea government a plan of development for the drilling of an additional crude oil development well.
“The well would be tied into existing subsea infrastructure and is expected to add crude oil reserves, minimize field declines and extend the reservoir life of the Aseng field,” said Noble.
For Noble Energy, the Aseng discovery builds up to the exciting progress the company has been making both in Equatorial Guinea’s upstream space and the monetization of the hydrocarbon resources specifically natural gas.