Oil majors buy up West African oil blocks to prepare for the next Brazil
Chevron, TotalEnergies and other oil majors are snatching up offshore blocks off the coast of West and Southern Africa. Geology, regulatory reforms and the need to replenish the reserves have prompted the search for the next Brazil. Companies are restocking oil and gas assets as fossil fuel demand is expected to remain higher than forecasted just a few short years ago.
Justin Cochrane is the African Upstream Regional Research Director for S&P Global Commodity Insights. He said that of all of the oil and natural gas discovered in West Africa since 2020, 11% or about 8.7 billion barrels equivalent to oil (boe) has been found.
He added that the region contains around 14% of liquids found since then or 5.6 billion barrels.
Angola is the second-largest oil producer in sub-Saharan Africa. In late 2024, a presidential order included tax cuts and reforms to make mature blocks more attractive for investment and encourage exploration.
Angola had also left the OPEC group a year before, releasing itself from production curbs. Shell stated last month that "new exploration is essential to sustain production well into the 2030s, as it was in Angola." Shell announced its deal to purchase stakes in two undeveloped offshore blocks. Eni-BP joint-venture Azule Energy drilled Angola’s first gas-specific exploratory well, and it found up to 100,000,000 barrels of condensate and potentially over 1 trillion cubic foot of gas. Chevron, a U.S.-based major, entered the lucrative MSGBC basin (Mauritania Senegal Gambia Bissau Conakry and Conakry), when it acquired two blocks in November off Guinea-Bissau.
Liz Schwarze is Chevron Vice President for Exploration. She said: "It adds to the great suite of explorations blocks that we have along the coast of West Africa. It's a very prolific area."
Peter Elliott, NVentures Data Analytics, said that the blocks could hold billions of barrels.
MAJOR DISCOVERIES
According to oil executives, the similarities between the geology of Africa's west coast and the vast productive basins located on the other side the Atlantic Ocean could lead to massive new discoveries.
"Africa and South America share a geological history", said Gil Holzman. He is the chief executive officer of Eco?Atlantic Oil & Gas in Canada.
He said that "multiple major discoveries along West Africa's margin directly mirror success in eastern South America and particularly offshore Brazil."
According to S&P Global Commodity Insights, Namibia is the country with the most recovered and discovered resources in the region.
This is roughly five times more than the second-ranked Ivory Coast and puts it ahead of South Africa and Angola. Last year, in the Orange Basin - one of the hottest exploration zones in the world - a joint venture Azule Energy and operator Rhino made three hydrocarbon discoveries offshore as they competed with TotalEnergies to be first in oil.
Rhino Resources, a privately held African exploration company, plans to drill a well for appraisal on a Namibian prospect and conduct a flow test at another in order to accelerate development. Total has moved forward with its Venus project in Namibia, and acquired a stake of 40% in the Mopane mega-discovery estimated to contain at least 10 billion barrels. Namibia's drilling campaigns have had a success rate above average of 70%, but the complex geology and deep-water technical challenges remain. Total, for instance, has highlighted a high ratio of gas to oil at its Venus Project. Shell had to write off $400 million on an oil discovery made in Namibia. However, it says that they remain committed to exploration.
(source: Reuters)