Expectations were high at the start of this year for some keenly anticipated oil and gas exploration wells on the African continent. However, most of these high-impact wells have now been delayed or deferred due to the twin impact of the oil price crash and the Covid-19 pandemic.
Discovered resources and year-on-year well activity change. Source: Rystad Energy ECube, Rystad Energy research and analysis.
Only 20 exploration wells have been drilled in Africa so far this year, and overall well activity has dropped about 72% from last year. This means the continent will struggle even to replicate 2018, which had the lowest number of African exploration wells (52) drilled in the past decade. Across Africa barely 270 wells have been drilled in the past five years, which is approximately equivalent to the total well count from 2014 alone.
The search for new volumes through exploratory drilling has seen around 41.5 Bboe discovered in Africa over the past nine years. Gas dominates over liquids, with around 73% of the cumulative discovered resource during this period. Last year was the most successful since 2015 with about 3 Bboe of new volumes discovered. UK supermajor BP’s Orca gas discovery in Mauritania was not only the deepest but also the largest discovery in Africa in 2019, and the fifth-largest in the past nine years. In addition, 2019 expanded Africa’s exploration potential with Total’s basin-opening Brulpadda discovery in Block 11B/12B in South Africa. Brulpadda not only de-risked the additional prospects available within the block, but also ignited hopes in South Africa that it would be able to reduce its overall gas imports.
This year has not turned out as anticipated, however, and the continent is yet to announce a major discovery. The only notable success is Eni’s twin discoveries from the Greater Nooros Area in the Mediterranean Sea off Egypt, with cumulative resources of about 4 Tcfg. Total spudded its first African well of the year in late August with the Luiperd prospect in South Africa, which will test the extension of the Brulpadda play.
A whole host of licensing rounds were scheduled to be held this year in African countries, including Algeria, Senegal, South Sudan, Sierra Leone, Ghana, Congo, Angola, Egypt, Sudan, Uganda, Somalia, Liberia, Mozambique and Nigeria. Now most of these rounds are either suspended until further notice or delayed, and the Nigerian marginal field round is the only one that has been able to attract significant interest. Some countries like Somalia and Liberia, which are hosting their first-ever rounds, have already started accepting bids for offered blocks but have pushed back the deadline to the second quarter of 2021.
We also expect that the highly anticipated wells of 2020 that may be spudded by the end of this year will be completed in 2021. This could include the likes of Total’s Venus prospect off Namibia, considered to be largest prospect in the ultra-deep waters in Block 2913B. Similarly, the result of Total’s Ondjaba well in Angola’s Block 48 may also be deferred to early 2021. These wells hold significant importance, as Namibia looks to register its first success since the Kudu field was found in 1974 and Angola searches for new volumes to reverse the decline in the country’s hydrocarbon production.
