Wednesday, February 29, 2012

Chevron will invest $1.9 Billion in Congo Republic Oil Field

A new "significant discovery" of oil in the shared deepwater zone between Congo Brazzaville and Angola's Cabinda exclave was announced today. The deepwater block in the Gulf of Guinea is operated by the oil multinational ChevronTexaco and smaller Angolan and Congolese companies.

ChevronTexaco today announced what the company called "a significant discovery at the Lianzi-1 exploration well in the deepwater area between the republics of Angola and Congo." This is the first major oil discovery in the promising offshore area that recently was announced as a shared zone between the governments of Congo Brazzaville and Angola. The deepwater zone is localised offshore Angola's troubled Cabinda exclave.

Cabinda south block

The Lianzi-1 exploration well had been drilled at a water depth of 909 meters, according to the oil company. The well there had encountered two oil bearing reservoirs and "a drill stem test of one of the intervals flowed at a rate of more than 5,000 barrels of oil per day," the ChevronTexaco statement said.

The well at Lianzi-1 had found geological strata similar to operating deepwater fields in Angola; the Landana discovery of 1998 and the Tombua discovery of 2001. This, according to the oil companies, proves the excellent chances of making even more discoveries in the deepwater zone offshore Congo and Angola. 

Lianzi development zone

George Kirkland, President of ChevronTexaco Congo, today commented that "the Lianzi discovery is yet another addition to a number of excellent deepwater prospects in the region. These discoveries will provide a series of developments in the future and fuel production growth. This discovery speaks to the success of our strategy of focusing our exploration program on core, high-impact opportunities," he added.

Jim Blackwell, managing director of ChevronTexaco's Cabinda Gulf Oil Company commented that the company had long been "optimistic about the exploration opportunities" in the shared zone and "this find helps to justify that optimism. The next step will be to complete several geologic and engineering studies to fully assess the field's size, reserves potential and possible development options," said Mr Blackwell.

The shared unit covers the portions of "14K" - a major Angolan (Cabinda) deepwater prospect - and the "A-IMI" prospect, lying within the limits of the Congo's Haute Mer permit. It incorporates the area along the maritime border between the two countries. 

Angola Lianzi Map

The Angolan-Congolese shared zone of 696 square kilometres is a result of protocol and participation agreements signed by Angola and Congo Brazzaville in September 2001 and March 2002, respectively. The two countries agreed to share revenues equally (50/50) for each block; both Congo's Haute Mer and Angola's Block14.

The establishment of the joint zone marked a major advance in Brazzaville-Luanda relations, both economically and regarding the conflict in Cabinda, which is now coming towards a solution. The good neighbourly relations were today also emphasised by a state visit of Congo Brazzaville's Minister Henri Jombo, who was received by Angolan President José Eduardo dos Santos in Luanda today.

ChevronTexaco, through its affiliate companies, holds a total interest in the discovery of 30.5 percent and Chevron Overseas Congo is the operator of the unit. Other participants in the two blocks include Angola's Sonangol (10.0 percent), Congo's SNPC (7.5 percent), Total (35.5 percent), ENI (10.0 percent), GALP Explorac√£o (4.5 percent) and Energy Africa (2.0 percent).

Chevron holds company-operated working interests in offshore Blocks 0 and 14 and nonoperated working interests in offshore Block 2 and the onshore Fina Sonangol Texaco (FST) area. Net production from these operations in 2010 averaged 161,000 barrels of oil-equivalent per day.

The company operates the 39.2 percent-owned Block 0, which averaged 116,000 barrels per day of net liquids production in 2010. The Block 0 concession extends through 2030.

Development of the Mafumeira Field in Block 0 continued in 2010. A development drilling program was completed in the northern section and achieved maximum total crude oil and condensate production of 57,000 barrels per day in fourth quarter 2010. FEED started in January 2010 on Mafumeira Sul, a project to develop the southern portion of the Mafumeira Field. A final investment decision is expected in fourth quarter 2011. Maximum total production from Mafumeira Sul is expected to be 110,000 barrels of crude oil and 10,000 barrels of LPG per day. At year-end 2010, no proved reserves had been recognized for the Mafumeira Sul project.

Chevron Corp. (CVX), the second-largest U.S. oil producer, plans to invest $1.9 billion in its Lianzi oil field in Congo Republic, according to the nation’s Economy and Planning Ministry.

Lianzi is situated on the maritime border with Angola. The ministry commented in a statement distributed in the capital, Brazzaville, today.

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