Côte d’Ivoire announced a “major” offshore oil and gas discovery on Wednesday after “very promising” exploration results in 2014 led to interest from several oil majors.
Italian energy group Eni said it had found up to 2bn barrels of oil and 2.4trn cubic feet of associated gas.
Energy minister Thomas Camara said the find would “greatly increase” Côte d’Ivoire’s proven reserves in the coming years, which are estimated at around 100m barrels.
The government owns a 10% stake in the discovery, which was made after drilling at the Baleine well about 60 km off the coast, through the national oil company Petroci Holdings. Eni operates the block with a 90% stake.
Offshore oil was first discovered in the West African country in 1977, with the bulk of the oil and gas wells later drilled in shallow marine areas. The latest find is the first deep water commercial discovery in more than 20 years.
To date, Côte d’Ivoire has identified 51 oilfields with four in production and 26 in exploration. The government sold blocks worth $185m to Eni and French-major Total during a licensing round in 2019 to ramp up exploration and production.
The former energy minister said at the time the average output is around 70,000 barrels per day (bpd) but “the potential is much higher.” British company Tullow Oil was awarded licenses for four blocks in 2017 and currently produces around 2,100 bpd.
Côte d’Ivoire currently produces around 50,000 bpd compared to Nigeria, Africa’s largest oil producer, which produces around 2.5m. The government has been on an investment drive in recent years in an attempt to diversify the economy away from an overreliance on cocoa and gold, by developing its mining and energy sectors.
Frontier energy market
The latest discovery looks set to buoy steady investor interest in West Africa as the region starts to attract more attention as an oil and gas destination. Neighbouring Ghana, which produces around 200,000 barrels of oil a day, announced a significant discovery by Eni in July.
Though Mozambique has dominated the headlines in terms of African natural gas in recent years, Senegal made discoveries in 2014 that have propelled the West African nation to a major oil and gas player. The Greater Tortue Ahmeyim LNG project, which straddles the maritime border of Mauritania and Senegal, is thought to hold as much as 15trn feet of recoverable gas reserves.
The $4.8bn project is being developed by the British oil major BP, US operator Kosmos Energy and state-owned entities from Senegal and Mauritania. Ibrahima Fall, Senegal country manager for Invest Africa, says that West Africa is fast becoming a coveted destination for oil and gas companies.
“From what the experts are saying, there are good reserves in Senegal but people believe there is more to be discovered,” he says. “They are projecting that in 15 to 20 years many of the oil and gas reserves in Africa will be based in West Africa.”
As oil majors scramble to exploit the region’s vast energy reserves, the latest discovery will help power a energy hungry region, says regional consultancy the African Energy Chamber.
“The discovery marks a significant moment for the country and wider region, ensuring a viable energy supply that will accelerate socio-economic development, alleviate energy poverty and position Africa as a global hydrocarbon leader,” it said.
Global energy transition
Mounting concerns over climate change have led governments and oil companies to lay the groundwork for a fundamentally different energy market focused on green energy. This has raised fears that African governments will miss out on generating revenues from the vast reserves discovered over the past few years as oil companies prioritize renewable projects.
Despite sizable discoveries over the past few years, the continent’s position as the world’s next major producer of oil and gas faces serious setbacks. Mounting concerns over climate change have lead governments and oil companies to lay the groundwork for a fundamentally different energy market, focused on renewables. This means African countries could miss out on opportunities for generating revenues from the exploitation of their vast reserves, as oil majors prioritize green projects, experts say.
But the latest discoveries offer hope that the time for exploration is not over for Africa, the African Energy Chamber believes.
“Rather upstream campaigns should be prioritized as the continent strives for escalated economic development. The discovery made by Eni offshore Ivory Coast is huge. Africa truly is the final frontier for hydrocarbon exploration, and the continent’s immense resources must be leveraged for strong and sustainable economic growth.”
Côte d’Ivoire’s state-owned oil refinery, the biggest in French-speaking West Africa with a refining capacity of 3.8m tonnes, could help generate revenues through exports to neighbouring countries.
A conservative estimation puts production from the new block at 150, 000 bpd, says Robin Mills, CEO of Dubai-based consultancy Qamar Energy.
“With a refinery capacity of about 70, 000 bpd the country could use the new crude. There would be a big surplus to be exported still. ”
With neighbouring Nigeria also expanding its refining capacity there should also be some competition in West Africa, he adds.