Oil boost on the horizon with go-ahead for project off Gabon and infill wells in Brazil

Oslo-listed oil and gas exploration and production (E&P) player BW Energy is embarking on an oil production expansion push by making a final investment decision (FID) for a project off the coast of Gabon and pursuing an infill well campaign in Brazilian waters.

BW Energy has disclosed a final investment decision for the Bourdon offshore development in Gabon’s Dussafu license and a campaign of new infill wells in the Golfinho license offshore Brazil, with the combined total 2P reserves estimate of 68 million barrels of oil equivalent (boe). The two sanctioned projects are said to reflect the firm’s growth strategy based on infrastructure-led phased developments, minimizing capital at risk, and delivering high returns.

These projects are anticipated to increase the operator’s net production target by approximately 10% to more than 100,000 barrels of oil per day in 2028, and contribute to the company sustaining that production level into the next decade. Bourdon Phase 1, with 25 million boe in gross 2P reserves, is targeting first oil in Q1 2028.

The project entails the conversion of the Akoum rig, formerly Jasmine Alpha, to a new wellhead platform with a 12-slot wellbay. While the initial production is expected from three wells, there is capacity for future phases with additional potential of about 200 million boe in place near Bourdon.

The firm has revealed a net capex of $300 million, with the pre-first-oil spend of about $100 million supported by a recent sale-and-leaseback agreement with Minsheng. BW Energy confirms that a term sheet was signed for a long-term lease, expected to cover 100% of wellhead platform capex before first oil.

The internal rate of return (IRR) is above 25% at $60 per barrel and breakeven at $45 per barrel at 10% discount rate. The partners at the Bourdon project are BW Energy (operator, 73.5% working interest), Panoro (17.5%), and Gabon Oil Company (GOC) (9.0%).

On the other hand, the new Golfinho wells encompass 50 million boe in 2P reserves, of which 42% is oil and 58% gas, with the targeted first oil at the end of 2028. This is set to triple production from the area to approximately 30,000 barrels of oil per day (boped) from 2029.

The campaign encapsulates four new wells, including three in the Golfinho license and one in the Camarupim license, in proven locations, which will be tied back to the FPSO Golfinho, leveraging the existing gas export pipeline from the FPSO to shore.

The net capex is $450 million, of which $170 million is committed to long-lead items and $280 million has the optionality on timing of spend up to six months ahead of first oil. The company claims that the low development cost of around $9 per barrel is enabled by existing infrastructure.

Carl K. Arnet, CEO of BW Energy, commented: “These two projects add highly profitable production in licenses with proven reserves and multiple growth opportunities.

“Through the repurposing of existing energy assets and a phased approach, BW Energy has optimised the development solutions supported by low-cost infrastructure-backed financing. This yields high return-projects, increasing our net production to above 100 kbopd in 2028 and positioning us to sustain this level into the next decade.”

The internal rate of return is above 50% at $60 per barrel and breakeven at $40 per barrel at 10% discount rate. BW Energy is the operator with a 100% working interest.

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