Source: Front Page Africa
‘Significant Discovery’
The discovery by African Petroleum Corporation Limited was reportedly made at Narina--‐1 well, offshore Block LB--‐09.
A statement by African Petroleum reported that the company has found a total of 32 metres (105 feet) of net oil pay in two zones: 21 metres (69 feet) In the Turonian; and 11 metres (36 feet) in the Albian. Good quality oil was found in each of the Turonian And Albian reservoirs of 37 degrees API and 44 degrees API, respectively.
“Hydrocarbon shows were encountered over a 170 metre interval in the Turonian and no oil water contact was found,” the company reported.
The discovery, according to APC confirms the prospectivity of both of these highly successful West African exploration plays.
The report noted that on African Petroleum’s Blocks LB--‐08 and LB--‐09, covering 7,135 sq km. Oil was found in good quality reservoirs in a Turonian submarine fan system extending across a prospective area of 250 sq km. In addition, excellent quality oil was found in the Albian sands nearby to a very large Albian submarine fan prospect.
Continued the statement: “In the shallower Campanian, Santonian and Coniacian horizons, 216 metres (709 feet) of water bearing net reservoir sands were encountered. Whilst hydrocarbons were not expected due to absence of a prospect trap, the confirmation of Good quality thick reservoir sands significantly reduces the risk in a number of large prospects covering 500 plus sq km, at these levels which are known to be oil bearing in the region. In the deeper Cenomanian and Albian 300 metres of source rocks were encountered which will be incorporated into The regional geological model to high grade the prospect portfolio as well as the surrounding open acreage.”
APC reports that the Narina--‐1 well was drilled by the Maersk Deliverer to a total depth of 4,850 metres (15,912 feet), in a Water depth of 1,143 metres (3,750 feet) taking 43 days for completion.
African Petroleum owns 100 per cent of Liberia offshore Blocks LB--‐08 and LB--‐09.
Karl Thompson, African Petroleum’s CEO said: “Narina--‐1 has identified a potentially large accumulation of light good quality oil at the Turonian level, as well as excellent quality oil in the Albian. Additionally, the well found thick reservoir sands in shallower zones and thick source rocks which together with the discoveries in the Turonian and Albian has transformed the prospectivity of Blocks LB--‐ 08 and LB--‐09, and the surrounding open acreage. African Petroleum has again drilled a very cost effective well, without incident and has established itself amongst the leading operators in deepwater exploration. The Company is focusing on sourcing rigs and we are planning an extensive exploration and appraisal programme in Liberia during 2012.”
Major Milestone
Although it could take as long as five years to start pumping black gold and managing public expectation, yet the discovery is a major milestone for the country that has seen little good economic news over the last three decades of conflict that saw hundreds of thousands of Liberians killed, with more than three quarters of the population internally or externally displaced.
African Petroleum is principally owned by Vasile Frank Timis, a Romanian émigré who left his own conflict torn country nearly three decades ago to find his fortunes in Australia. Now an Australian citizen with vast wealth mainly from mining and oil projects around the globe, he was recently named one of the richest people in the UK with a net worth of 600 million pounds, or nearly one billion dollars.
Timis started his own transport company in Australia, which owned only one truck driven by himself and in 1992, he became the CEO of Morwest Holdings Pty Ltd and the first of his business in the gold mining industry. Timis and two Australian miners dug for six months for gold in a region called Mosquito Creek. During this time he founded three other companies: Riverdale Mining, Timis Corporation and Carpathian Investments, together with Ioana Timis and his sister, Ioana Majdik. Frank Timis, despite many challenges in his life has made great strides in the mining in oil industries. Currently, Timis is on the verge of exploiting Tonkollili, a potentially ten billion iron ore mine in Sierra Leone.
Avoiding Dutch Disease and Resource Curse
Now that Liberia has discovered oil, analysts say the country must develop structures to avoid the Dutch diseases and resource curse. The Dutch disease is overreliance on a mineral resource to the neglect of other sectors in a country’s economy. The resource curse is what has befallen many developing nations with abundant resources, yet mire in poverty and conflict.
Samuel P. Jackson, a Liberian economist and business development specialist with years of experience close to Liberia’s resources sector say Liberia must begin to develop a framework, which ensures that hydrocarbon development is integrated within the economic mainstream of the country by creating programs that broaden participation of Liberians to the maximum extent feasible. In order to create such programs, it is necessary to understand the current organizational framework for hydrocarbon development, major antecedents in the sector, prospects for future oil and gas discovery and the current status of the country’s oil program, including major actors in the evolving value chain. Additionally, Mr. Jackson warns that the country’s planners should not neglect other sectors of the economy, and in fact should try to deepen economic activities in other areas in order to diversify to avoid exogenous shocks due to volatility in the prices of oil on the international markets.
NOCAL set to Play a Leading Role
Hydrocarbon development in Liberia is regulated by NOCAL under the New Petroleum Law of Liberia, which was signed into law in June of 2002 and published by the Ministry of Foreign Affairs in July of the same year. It provides the regulatory basis for hydrocarbon development, with provisions and definitions on participants in the country’s oil and gas industry and sets out clear guidelines for Liberian official participation, via equity and makes provisions for local content. It also establishes the basis for relationships between NOCAL and licensees for petroleum acreages, through blocks and fields and proposes a production sharing arrangement in the exploitation phase of hydrocarbon development.
Recent changes at NOCAL may portend fundamental changes in how the corporation does business. It is unclear how the corporation will develop going forward, either as a regulator of the hydrocarbon sector, or a key participant in the upstream and downstream on the Angolan model, such as SONANGOL, Petro bras in Brazil or ARAMCO in Saudi Arabia.
As of now, the country should relish its new found status as a future oil producing nation, but it should never lose sight of the major challenges going forward.
