Deepwater Africa is ChevronTexaco merger prize
By Moses Aremu, Lagos, Nigeria
The world's hottest exploration play is one of the key areas where newly merged Chevron/Texaco will compete most fiercely with other supermajors in the upstream—the deepwater fairway off West Africa.
"ChevronTexaco will have world-class reserves in West Africa and the Caspian region," says Chevron's President, Dave O'Reilly. The combined company will have a superior exploration acreage position in deepwater West Africa. Chevron ranks third in Nigeria by production, making 450,000 b/d oil of 40% operated acreage. Texaco is a 32% holder in Nigeria's OPL 216, which contains the 1.2 billion bbl Agbami Field, the largest confirmed deepwater oil field in the country.
In Angola, Chevron is again the biggest player by production. It is the operator of acreage that delivers 75%, or 550,000 b/d oil, of Angola's 798,000 b/d. In the Angolan deepwater, Chevron's Block 14 is well placed to "see" the same prolific play types and geologic structures that litter most of deepwater Angola, and yet, at 400 meters isobath on average, it lies in much shallower water depth than the leases belonging to other competitors.
Chevron has found it cheaper and faster to produce a deepwater field in Angola, mainly due to the shallower water depth. For all the hype about Angolan deepwater, however, Chevron is the only company that has put a field on stream. Its 500-million bbl Kuito Field, in production since the end of last year, is currently doing 70,000 b/d oil.
"Our new company will offer challenges and exciting new growth opportunities," O'Reilly says. "Combining our assets and operations will make us stronger, especially in our core businesses. Our strengths in the upstream will be particularly meaningful, because we're creating a broader portfolio of high quality assets that include even better growth prospects.
ChevronTexaco's superior exploration opportunities, reserves, and production will enhance our leadership position in regions where each company is already strong. We plan to invest in the best of the opportunities the two companies bring to ChevronTexaco."
Apart from Kuito, Landana, Lobito, and Tombacco, Chevron also has Belize/ Benguela, where development plans are at an advanced stage, with tendering of a contract expected shortly for front-end engineering and design. Still, while Chevron looks big today in production in Angola and Nigeria, the future belongs to Texaco, if the promises of deepwater exploration are considered.
In deepwater Nigeria, apart from OPL 216, Texaco holds interest in Statoil-operated 217 and 218, one of which (OPL 218) holds the 200 million bbl Nnwa Field, in 1000 meters of water. The company is 100% operator of OPL 213, which lies due south of Shell's OPL 212. Only one well has been drilled in OPL 213.
Boi-1 was a dry hole, but the company has yet to test the plays on the 1000 meter isobath, which are on trend with Shell's 800-million bbl Bonga Field.
Chevron 's Block 14 is the only lease in which it has any interest in deepwater Angola, even while Texaco has interests in 50% of ExxonMobil-operated Block 20; as well as being 40% operator of Block 22. Chevron again has only a minimal stake in deepwater Nigeria. Last year, it pulled out of OPL 221, one of the two Elf-operated deepwater leases in which it had 30% interest. The second one, OPL 222 boasts a 250 million field, Ukot, which the partners Canoxy, ExxonMobil, Elf, and Chevron are still trying to define.