Offer put forward for ‘largest and most prospective oilfield’ in Benin
Canada-headquartered oil and gas player Zenith Energy has handed over an offer to the relevant Ministry in the Republic of Benin for a block with “significant untapped, independently assessed oil and gas reserves,” which is located offshore Benin in Western Africa.
Zenith Energy revealed on Thursday that an offer was submitted to Benin’s government on 15 September for the award of an initial nine-year licence to operate Block 1, containing the Sèmè oilfield off Benin.
Commenting on this, Andrea Cattaneo, Chief Executive of Zenith, remarked: “We are delighted to have submitted this offer for what is an extremely exciting opportunity in Benin, representing the largest and most prospective oilfield in the country.”
The company’s offer outlines that geological attention will be directed towards developing the emerging Cretaceous play along the West African coast, which has proven to be a highly prolific basin extending from Côte d’Ivoire, Ghana to the West, to the east in Nigeria, with the large Ogo oil and gas discovery, as well as producing in the Aje field.
If its offer for Block-1 is accepted, Zenith intends to begin negotiations with the country’s ministry to finalise a draft Production Sharing Agreement (PSA) to be approved by the legislature of Benin.
Moreover, the firm will seek to use the existing infrastructure installed in 2015, where previous development was stalled due to the low oil price environment at the time, to rapidly restore commercial production in “the current high oil price climate for the benefit of the citizens of Benin and its shareholders.”
In addition, Zenith presented “a comprehensive social development plan,” outlining agricultural community engagement initiatives aimed at fostering productivity and local employment, in addition to a sustainable development plan, taking into consideration the natural history of the region and placing environmental sustainability “at the heart of the company’s business development activities in Benin.”
“Benin is a stable and attractive jurisdiction for foreign investment, and we look forward with great enthusiasm to working closely with the local authorities to ensure we achieve a fruitful and enduring partnership in the event our offer is accepted,” added Cattaneo.
Discovered in 1967 by Union Oil and located in shallow water – 30 metres – offshore with onshore facilities and a tank farm for processing of oil production, Block-1 covers 551 km2 with over 355 km2 of recent 3D seismic data. The company says that this block’s production facilities comprise three platforms, the last being installed in 2014-2015.
According to Zenith, 23 wells have been drilled in Block-1, with the last one drilled in 2009 by South Atlantic Petroleum (SAPETRO). While oil was discovered in this well, due to the prevailing oil price at the time – approximately $30 – it was deemed uncommercial.
The firm emphasises that this is a proven oilfield, with significant unexploited potential, having estimated recoverable reserves (P2) of 22-28 million barrels of oil and 428 billion cubic feet of natural gas (Kerr McGee 2005).
Zenith claims that this block has produced a reported 22 million barrels of oil to date, with the last production having taken place in 1998 at a rate of approximately 2,000 barrels of oil per day. The company sees “significant development and exploration potential” in the emerging Syn-Rift play extending from neighbouring Nigeria.
“Block-1 has significant untapped, independently assessed oil and gas reserves, a proven history of material oil production and existing field infrastructure. These key qualities make it a potentially highly enriching addition to our portfolio and fully satisfy the key criteria defining our growth strategy,” highlighted Cattaneo.