21 January 2013

Liberia: Doubts Over AP 840 Million Barrels

Photo: Africa Undisguised
An oil rig.

African Petroleum (AP) Director Pierre Raillard has narrowly denied he was coerced by the National Oil Company of Liberia (NOCAL) last Friday to manage public expectation on the oil sector following a recent pronouncement that it had started drilling an estimated 840 million barrels of oil off the shores of Liberia.

On Tuesday, January 8, 2013, AP said it had started drilling its Bee Eater-1 well offshore Liberia, about six miles from what it said was a proven high-quality reservoir, estimating the mean recoverable resources for the Bee Eater area at more than 840 million barrels of oil.

In a contrast to AP statement, NOCAL claimed that "even if the ongoing appraisal programs determined the commercial viability discoveries, commercial production of oil in our off shore basin may yet be a decade away."

Apparently not being satisfied by their two separate statements, both AP and NOCAL held a joint press conference on Friday, January 18, 2013 at the conference room of NOCAL on Ashmun Street where they argued that "un-risked prospective resources" shall be interpreted as possible resources which need to be confirmed by further technical work and additional drilling and shall not be considered as proven reserves of oil ready to be produced as was reported in the media.

Reading the joint statement in Monrovia, AP Director Pierre Raillard recalled that his company announced on January 8, the commencement of the drilling of the Bee Eater-1 well in Block LB-09 offshore Liberia with semi-submersible ocean rig, the Eirik Raude. He said the Bee Eater-1 will test the potential of a westerly extension of the Narina-1 Turonian oil discovery.

"If the test is successful, the Bee Eater well could demonstrate the presence of a large hydrocarbon reservoir system," said Raillard.

He told journalists that a range of possible volumes of oil that could be recovered from the reservoir has been estimated from analysis of regional geological and engineering data at an average volume of 840MMstb (million stock tank barrels) of oil for the Narina/ Bee Eater reservoir system in Block LN-09.

Director Raillard however said only further drilling can demonstrate whether "resources" can move to the "reserve" category and how much commercial quantities will be available for production.

He said the current drilling campaign is aimed at confirming the nature of the geology and of the reservoir, including its size and quality so that further drilling and technical programs can be developed.

"The shape of the program, the number of possible appraisal wells will be dependent on the outcome of the Bee Eater-1 well," said Raillard.

Both AP and NOCAL reiterated in the joint statement that oil and gas exploration phases include exploration drilling, appraisal, development, production and decommissioning. NOCAL and AP said the cycle from an initial discovery to production typically takes five to seven years.

During questioning, NOCAL boss Edward Mcgaill said the entity has no intention to coerce oil companies operating in the country, but the interaction was part of collaboration between both companies.

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