[ 2016-01-29 ]

Oil rig

Report: Oil fall won't weaken Ghana's offshore
Ghana’s offshore Industry will remain the
third-largest destination for operator capex
offshore West Africa going toward 2020, driven by
the TEN (Deepwater Tano) developments, Infield
Systems – an energy research and analysis firm
that is dedicated to the provision of accurate and
up-to-date information, databases, research,
market forecasts, mapping, commercial market
due-diligence, transaction support, business
strategy, analysis and intelligence to the global
offshore oil, gas, renewable energy and associated
marine industries, has predicted.

The firm, which is now part of Wood Mackenzie,
said Tullow’s Mahogany East and the Eni-operated
Sankofa OTCP are also anticipated to require
substantial investment during the next five
years.

In operator terms, Tullow is expected to continue
to lead investment, although the London-based
independent is forecast to see declining
expenditure; decreasing by a CAGR of -29% between
2016 and 2020.

Infields Systems said in a report titled:
“Offshore West Africa development to remain
strong despite lower oil prices” that as a
relatively young country in terms of hydrocarbon
development, Ghana has looked to introduce new
industry regulations since the giant Jubilee came
onstream in 2010.

Local content regulations have focused on adding
value through the supply chain and developing
human capital through the transfer of skills and
expertise.

The Ghanaian government aims for 90% local
participation by 2020; although it remains to be
seen the extent to which this will be achieved.

Below is the rest of the report by Infields System
on how the offshore industry in West Africa will
pan out in the face of falling price of oil:

Offshore West Africa development to remain strong
despite lower oil prices

With several capital intensive field developments
sanctioned prior to the oil price decline, West
Africa is anticipated to see robust demand growth
through to 2018. Over the 2016-2020 timeframe a
capex demand compound annual growth rate (CAGR) of
4% is forecast.

Angola is expected to dominate demand during the
period, driven by Total’s activities; while the
highest growth rates are anticipated for emerging
countries of hydrocarbon production, in particular
Côte d’Ivoire and the more established
Equatorial Guinea.

Angola is expected to continue to drive capex
demand within the West African region, with a 47%
market share of demand between 2016 and 2020.

After a decline in capex investment between 2014
and 2015, predominately as a result of giant
projects such as N’Goma and CLOV seeing the
majority of its development spend during the
previous period, Infield Systems expects
Angola’s demand to increase year-on-year through
to a peak spend in 2018.

Projects expected to drive this peak include
Kaombo 2 and the presalt Cameia Mound, with the
majority of installation capex forecast to take
place in 2018. Despite the much-touted potential
of Angola’s Kwanza presalt basin, exploration
success has been mixed.

Over the five-year period to 2020, Infield Systems
anticipates for expenditure to be required on
three presalt developments: Cameia Mound, Cameia
(Phase 2), and Bicuar; with all three prospects
discovered before mid-2014. From an operator
perspective, Infield Systems anticipates for Total
to drive capex demand, with a 40% share of the
Angolan market over the 2016-2020 period, driven
by its giant Kaombo multi-field complex.

Nigeria is expected to hold a 22% share of
offshore expenditure demand over the 2016-2020
timeframe, a slight increase from the 18% market
share seen over the previous five years.
Altogether, Infield Systems expects for 54
potential fields offshore Nigeria to require capex
spend over the forecast timeframe, with Total-led
developments anticipated to form 38% of demand
during the period.

The giant Egina project is expected to remain key
to Total’s investment, with 60% of the French
international oil company’s forecast demand
offshore Nigeria expected to be attributable to
the development. In terms of new project
sanctions, however, the uncertainty surrounding
Nigeria’s Petroleum Industry Bill (PIB) has
discouraged foreign investment. Now, the PIB,
which has thus far been six years in the making,
has been taken back to the drawing board with new
proposals expected to include a greater level of
consultation with IOCs in light of oil price
declines.

Equatorial Guinea is expected to undergo a capex
demand CAGR of 13% over the next five years to
2020. A total of 28 fields may require capex
during the period; an increase from the 15 fields
invested in over the previous five years. Key to
Equatorial Guinea’s demand growth is expected to
be Ophir’s Fortuna FLNG project, which is
forecast to comprise 28% of the country’s
offshore capex demand during the 2016-2020 period.
The project, which sees the independent partnered
with Golar, entered front-end engineering and
design in July 2015. It is anticipated to see its
final investment decision (FID) by mid-2016, with
Infield Systems currently forecasting installation
to be completed by 2019.

The previous five years has witnessed significant
capex growth offshore Congo (Brazzaville) with
Infield Systems noting a CAGR of some 154% from
2011 to 2015. This has been predominately driven
by investment on the Moho Nord Marine project,
which has comprised 52% of the country’s
offshore expenditure. The project saw capex
commence in 2013, with the entire development
consisting of 28 subsea wells tied back to a
production platform. Going forward, Infield
Systems expects for Congo (Brazzaville) to see a
capex CAGR decrease of -13% between 2016 and 2020;
primarily the result of declining capex on the
Moho Nord Marine area developments, but the
emergence of Eni’s Nene and adjacent discoveries
in the Marine XII block could alter this trend
significantly.

Emerging countries of hydrocarbon development
include the Côte d’Ivoire. Here, Total’s
Saphir discovery in April 2014 highlighted the
potential of the ultra-deepwater blocks to the
west of the country’s offshore zone and the
under-explored San Pedro basin. Altogether Infield
Systems forecasts for up to 11 potential fields
offshore Côte d’Ivoire to require capex during
the next five years to 2020. While the highest
demand is expected on Saphir, Infield Systems also
anticipates the country’s eastern offshore zone,
where prospects such as Eland and Kudu neighbor
Ghana’s TEN fields, to also see investment
during the period. Over the upcoming five years
the country is likely to see increasing
exploration, as a number of new operators have
entered the country’s market over recent years.

Elsewhere, Infield Systems forecast a number of
possible developments offshore Cameroon to require
expenditure over the 2016-2020 timeframe. While
the majority of these are in the very early stages
of planning, the Golar Cameroon FLNG is expected
to see completion in 2017, with the FID reached by
Golar and its partners in September 2015. The
facility, once installed, is expected to produce
1.2 million tons of LNG per annum from Perenco’s
Kribi fields, which represents about 50% of the
vessel’s capacity, over an eight-year period.

Prospects offshore Senegal may also see capex
begin before the end of the decade. Infield
Systems expects for operator Cairn Energy to lead
development on the FAN-1 and SNE-1 Sangomar Deep
discoveries, which were amongst the largest global
discoveries of 2014. Infield Systems currently
forecasts for the two prospects to be developed
via an FPSO, which will have the capacity for
future tie-ins of neighboring prospects, although
the operator and its partners have yet to announce
when a FID will be due on the development.

The previous year has been a challenging period
for the global oil and gas industry. West Africa
certainly has not been immune to the repercussions
of oil price decline. Delayed projects include
Shell’s Bonga South West, where FID has been
postponed once again until 2016, and Maersk’s
Chissonga has gone back to the drawing board.
Going forward however, West African development is
expected to remain strong, buoyed by a handful of
giant projects sanctioned prior to the oil price
collapse, and supported by increasing investment
in new areas of production.

Source - classfmonline

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