To­tal strikes oil for sec­ond time off­shore Ivory Coast

In­dia Re­liance, HPCL Mit­tal plan re­fin­ery ex­pan­sions

Daily Trust - - BUSINESS -

France’s To­tal said yes­ter­day it had dis­cov­ered oil in a deep off­shore area in the west of Ivory Coast, the com­pany’s sec­ond oil find in a year in the West African coun­try.

“This well is the first dis­cov­ery in the San Pe­dro Basin, a fron­tier ex­plo­ration area in Ivory Coast,” To­tal se­nior vice pres­i­dent for ex­plo­ration Marc Blaizot said in a state­ment.

“Hav­ing con­firmed the pres­ence of a petroleum sys­tem con­tain­ing light oil, we will next eval­u­ate this very promis­ing find and fo­cus on its ex­ten­sion to the north and east.”

Oil and gas ex­plo­ration in West Africa’s Gulf of Guinea has risen sharply since Ghana dis­cov­ered its gi­ant Ju­bilee field in 2007 and brought it to pro­duc­tion in record time in late 2010.

Ivory Coast, French-speak­ing West Africa’s largest econ­omy, is seek­ing to ac­cel­er­ate de­vel­op­ment of its en­ergy sec­tor, ne­glected dur­ing a decade-long po­lit­i­cal cri­sis that ended in a brief civil war in 2011.

Much of the off­shore in­vest­ment to date has fo­cused on wa­ters along its east­ern mar­itime bor­der with Ghana, close to the Ju­bilee and TEN oil and gas fields op­er­ated by Lon­don­listed Tul­low Oil.

To­tal said in April last year it had dis­cov­ered oil in the CI-100 block within Ivory Coast’s east­ern wa­ters ad­ja­cent to the mar­itime boundary with Ghana, while Tul­low also struck oil in its por­tion of CI-100 last year.

How­ever, com­pa­nies in­clud­ing To­tal, Texas-based Anadarko and Canada’s CNR are in­creas­ingly look­ing to op­por­tu­ni­ties in the west, closer to Ivory Coast’s bor­der with Liberia.

The group had dis­ap­point­ing ex­plo­ration re­sults in re­cent years, al­though it em­barked on what it called a costly “high-risk, high-re­ward” drilling strat­egy to take ad­van­tage of sus­tain­ably high oil prices above $100 a bar­rel.

In 2014, it is set to spend $2.8 bil­lion on 60 wells, the same as in 2013 but up 12 per­cent on 2012, drilling two other wells off­shore Ivory Coast but also off the coasts of Brazil, South Africa, An­gola and in Iraqi Kur­dis­tan. In­dia’s Re­liance In­dus­tries, owner of the world’s big­gest re­fin­ing com­plex, and HPCL-Mit­tal En­ergy Ltd (HMEL), part owned by steel ty­coon L N Mit­tal, have sought en­vi­ron­ment min­istry ap­proval for rais­ing ca­pac­ity of their plants.

Re­liance, whose two plants at Jam­na­gar in western In­dia has in­stalled ca­pac­ity to process about 1.2 mil­lion bar­rels per day (bpd) oil, has the ca­pa­bil­ity to turn the heav­i­est crude into value added prod­ucts.

Bil­lion­aire Mukesh Am­bani’s Re­liance seeks to add a fifth crude train of 400,000 bpd, some poly­mer units and chang­ing the fuel for 450 megawatt of an al­ready ap­proved 2100 MW power plant from gas to coal, a note on the min­istry’s web­site said.

“Cur­rently mar­gins are low, de­mand also might not war­rant such a huge ex­pan­sion so the ac­tual ca­pac­ity ad­di­tion may take some years,” said an Asian trader.

The tim­ings and the cost of ex­pan­sion de­pend on get­ting the nec­es­sary govern­ment ap­provals, which may take months to years.

The new train will also help Re­liance in fur­ther di­ver­si­fy­ing its crude port­fo­lio and pro­cess­ing some of the “dirt­i­est, heav­i­est and high acid crude”, said the trader.

“This could be their strat­egy to take all ap­provals in ad­vance so at a fu­ture date they need not run af­ter the bu­reau­cracy for the ap­proval,” said an in­dus­try source.

The pro­posal men­tions that an­nu­ally 1.8 mil­lion tonnes of im­ported coal would be re­quired for the 450 MW power plant.

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