Total strikes oil for second time offshore Ivory Coast
India Reliance, HPCL Mittal plan refinery expansions
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.