Africa Oil & Gas: Offshore oil miss fails to dent Gambian optimism

The West African country’s most recent effort to find offshore oil came up short, but explorers hope to drill more wells in 2019

The first offshore well drilled in The Gambia in four decades found more water than oil and has been abandoned. But both the drillers and the Gambian government remain optimistic that the block’s proximity to big oil finds off central Senegal means it could yet prove oil-rich.

The government has extended Far’s current licence to June 2019 to allow for further data evaluation, which the company said would allow it to identify future drilling targets. Far, which holds the neighbouring A5 permit, still plans to carry out further drilling in 2019.

“Oil shows were encountered at several levels indicating that the area has access to an active hydrocarbon charge system. The well also encountered excellent reservoir and seal facies, indicating that all the key components for a successful trap are present,” says Far. But the firm’s managing director Cath Norman also acknowledges that the outcome was “not in line with our pre-drill expectations”.

PSC negotiations imminent?

News of the dry well is also a blow to the Gambian government, which has been promoting its acreage in the hope that discoveries in Senegal’s SNE field to the north would encourage further investment by IOCs, given The Gambia’s offshore shares similar and potentially linked shelf-edge geology.

On the SNE development, Woodside and Cairn are developing reserves estimates at around 500mn barrels of oil with a view to producing some 100,000 b/d from 2022. Far is also a minority shareholder in that project.

The Gambia’s energy ministry is trying to kickstart a licensing round covering four offshore and two onshore blocks. Earlier this year, the ministry said 11 applicants had been asked to provide proposals, including China’s Cnooc, Eni, Total and a UK/Australian joint venture between Tullow and Woodside, as well as Far.

Fafa Santang, the Gambian minister of petroleum and energy, said at November’s Africa Oil Week conference in Cape Town that he hoped that production-sharing-contract negotiations would start shortly. “We have a request for projects going on right now and, maybe, by the end of this month that will close, and we will start negotiating with companies,” says Fantang.

The cash-strapped Gambian government has received backing from international institutions including the African Development Bank to develop negotiating expertise. It also faces a potentially costly legal challenge from Oslo-listed African Petroleum, which claims it still holds title to blocks A1 and A4, which are part of the current licensing round. The issue is subject to arbitration proceedings.

Future ultra-deep round

Meanwhile, the country’s petroleum commissioner, Jerreh Barrow, tells Petroleum Economist that the next step is to demarcate and market ultra-deep acreage. “Once the current licensing round is complete, we will undertake a new licensing round to include the ultra-deep blocks, because we have seen an interest in those,” he says.

Barrow adds that some parts of the ultra-deep-water acreage contains fan-type sedimentary geology similar to Senegal’s discoveries-both in the SNE field and also the more gas-prone areas further north around the Senegal-Mauritania maritime border, where BP and US independent Kosmos are developing the Tortue FLNG project. Fresh 3D seismic surveys are being carried out in The Gambia’s ultra-deep waters to better understand the acreage, he says.(source: Petroleum Economist)

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