New discoveries raise West Africa oil hopes

Tue Feb 21, 2012 1:04pm GMT
 

By Alphonso Toweh and Simon Akam

MONROVIA/FREETOWN (Reuters) - Energy companies African Petroleum Corp and Anadarko said they struck oil off the coasts of Liberia and Sierra Leone, raising hopes for an energy bonanza in the war-scarred West African states.

African Petroleum said on Tuesday its Narina-1 well struck 105 feet of net oil pay at its offshore Liberia LB-09 block, adding an extensive exploration and appraisal programme was planned to see if the reservoir was commercially viable.

"Narina-1 has identified a potentially large accumulation of light good quality oil at the Turonian level as well as excellent quality oil in the Albian," Chief Executive Karl Thompson said in a statement.

Liberia's top oil official said the discovery was "good news for Liberia" but warned against unrealistic expectations.

"We urge everyone to be very patient," Liberia National Oil company CEO Randolph McClain said on local radio. "It will take time to fully appraise this discovery and years, between five to seven years, before a drop of oil is produced from the well."

Anadarko Petroleum Corp also said on Tuesday that one of its deepwater exploration wells located offshore Sierra Leone encountered 98 net feet of hydrocarbons.

Oil exploration off the coast of West Africa has surged since 2007 when Tullow Oil found the Jubilee field, one of the continent's biggest recent finds. The field came on line in late 2010, driving double-digit economic growth in Ghana.

"What you've had since then was an increasing number of finds showing that there are oil systems in the region. Announcements like this will only raise the excitement," said John Marks, director of consultancy Africa Energy.

Both Liberia and Sierra Leone have been eager to develop their mining and energy industries after years of civil war hindered investment and left infrastructure in ruins.

"It means a lot for the economy of Sierra Leone, it means a lot for our revenue generation drive," said Richard Konteh, Sierra Leone's minister of trade and industry.

RESOURCE CURSE

Countries along West Africa's Gulf of Guinea already produce more than 3 million barrels of oil per day, most of it from OPEC member Nigeria, and Washington estimates the region will supply about a quarter of U.S. oil imports by 2015.

Positive drilling results along the coast have raised hopes among ordinary people in Sierra Leone and Liberia that joining the club of oil exporters will help them, but they have also triggered fear of corruption and instability that has hit other resource-dependent countries like Nigeria.

"We want to see what the government will do, so it will benefit the average Sierra Leonean," said Samuel Issa Kamara, a 29-year-old shop worker in Freetown. "The oil is a natural gift from God, so every Sierra Leonean should benefit from it."

The oil find could also raise the stakes in Sierra Leone's presidential election, due in November, a spokesman for President Ernest Bai Koroma said. Koroma is seeking a new term in the polls.

"It may increase the tenacity with which the parties will fight the election," spokesman Unisa Sesay told Reuters.

Anadarko said the Jupiter-1 well offshore Sierra Leone was drilled to a total depth of about 21,212 feet in water depths of about 7,215 feet in the Sierra Leone/Liberia Basin. It said additional evaluation of the area was likely.

Anadarko operates the block with a 55 percent working interest. Co-owners in the block include Repsol Exploracion Sierra Leone S.L and Tullow Sierra Leone B.V.

Australia-listed African Petroleum Corp owns 100 percent of Liberia blocks LB-09 and LB-08.

An oil rig on the outskirts of Havana April 5, 2011. REUTERS/Desmond Boylan

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