Cabinda North

My file has some notes from Interoil's Jan 2008 presentation (page 28)
http://www.interoil.no/uploads/Interoil_Pareto_20080117_Final.pdf
* Based on wells drilled 1968-1971 (gross figures)
Prospective Resources* ~ 290 MMb
Contingent Resources* ~ 52 MMb
Acquisition cost 33 MMUSD
Drilling 2009 3 Wells
Working Interest 21%
Surface 2‘400 km2
Operator Sonangol 20%
Partners Teikoku, Soco, ACR
Existing Wells 14
Wells with hydrocarbons 5
Work obligations initial 3 year
• 1200 km 2D seismic
• 5 exploration wells
• Estimated net cost USD 24 Million

Shows a very basic prospect map but there's a nice clear one on slide 14 here :-
http://www.interoil.no/uploads/Interoil_Company_presentationNFFNov07.pdf
Notes :-
Interoil’s key objectives:
Fast-track appraisal/development of the Dinge oil discovery
• Contingent resources of 50 mmboe
Acquisition of new 2D/3D seismic

Note Loufika just the other side of the border in Congo-B Koiulou licence is a pre-salt prospect drilled by Burren just before they were taken over by ENI. This is on trend with M'boundi in the Vendji formation. I think Loufika-1 only came in with shows but the shallow Tioni above flowed oil. Dunno what happened since!

Thanks for that dj. So....using the deal price with Petropars for the 10% and pro-rating the $33mn acquisition cost (and conservatively assuming zero spending since - which is probably wrong) and adding in the $7mn book profit reported, it looks as though the block is worth c $230mn in its present state (shortly to be improved by the seismic acquisition).....so SIA's 17% should be valued at a minimum of c.$40mn.

The thought also occurs that other partners may have pre-emption rights? Presumably not though because the Interoil announcement seemed quite definite on the sale to Petropars......and I guess one doesn't rush to pre-empt NOCs anyway ;-)

ee

ee

Yes, I'm sure there will be pre-emption rights but as you imply, ain't likely to be executed, primarily because of politics. Can't imagine Interoil having the slightest interest in Iran because of their ghastly "buy back" fiscal regime which oilcos universally hate...let alone sanctions in play. Assume the farmout is driven by Angolan authorities. Interoil's CEO previously ran the Angolan company Force Petroleum for several years, so some historic incest bound to be present.

Re Loufika, my memory was a bit askew. LFK-1 in fact was a shallow 550m discovery which subsequently went on long term test at 350 bopd. 4 more shallow wells were drilled and last I can find, ENI were contemplating development. It seems they did re-drill the deeper (M'Boundi lookalike) pre-salt objective, with no luck.

Assume the farmout is driven by Angolan authorities

Yes that is probably correct I'd think - recall that Interoil's position came somewhat out of the blue and at a time when SOCO were trying to raise their stake beyond 17%

rgds

ee

Interesting piece here sourced from Interoil:

http://www.petroleumafrica.com/read_article.php?NID=7633&PHPSESSID=4d564e4109575f4faada0a9a6f76a600

InterOil Exploration & Production and Petropars entered into an agreement that has Petropars receiving a 10% stake in Angola’s Cabinda North license. Interoil will receive $7 million net profit after tax under the transaction and the transaction will cover all of InterOil's current commitments. .........The block is located in north Angola, along the Republic of Congo (ROC) border. The block covers 2,400 sq km and is considered to be a low-risk onshore block in terms of exploration with a good potential for new discoveries and with opportunity to develop existing oil discoveries in the area in the so-called Zila ridge area near the coast and in the Dinge high area. Work commitments for the first three-year period include the acquisition of 1,200 km of 2D seismic and the drilling of five exploration and three appraisal wells.

Interoil has plans to appraise the Dinge oil discovery in a fast-track appraisal/development program and also acquire new 2D/3D seismic data.

It'll be interesting to see what the seismic turns up.

ee

http://www.upstreamonline.com/live/article181527.ece?referrer=htmlemail&date=Mon%20Jun%2022%2013:16:00%20CEST%202009

Angola plans to start onshore exploration work at Cabinda next month, a Sonangol executive told local media.

 

Ernesto Taia, head of research and production at state-owned Sonangol told Radio Nacional de Angola that Sonangol will first carry out seismic studies in the Necuto and Buco Zau regions.

Necuto is a town in Buco Zau region, located in the Cabinda North block near the border with the Nganzi block - and appears to be in the large area of oil seeps shown in the extreme south-east of the Cabinda North block - see AGM slide 18.

Good to see the promised action anyway......

ee

Here's an interesting snippet:

PetroVietnam, which also plans to expand into oil-rich Angola, is wholly owned by the government of Vietnam.

I would be unsurprised if that was in Cabinda.

ee

Hi EE the link you have attached does not appear to have the important section of text. (dont know if it was removed)

The below link has the section of text

http://www.busrep.co.za/index.php?fSectionId=552&fArticleId=5176688

...yes it was removed....!

One wonders why...... ;-)

With the start of the African Nations Cup in Angola this week, and this dreadful gun attack on the Togo team bus in Cabinda today, there may be further unrest as rebel groups seek publicity for their acts and aims for independence .  The Togo team bus was machine-gunned coming across the border from DR Congo, killing the driver and injuring two players.

Background:

The oil-rich exclave - home to a large base of the energy firm, Chevron - was chosen to host an Africa Cup of Nations stadium in a bid to boost local investment and infrastructure.

Cabinda is physically separated from the rest of the country by a strip of the DR Congo and has a northern border with the Republic of Congo.

For some years the nationalist movement Flec (Front for the Liberation of the Enclave of Cabinda) has been trying to claim independence from the Angolan government.

A peace deal was signed in 2006 but a low-level insurgency continues and there are allegations of rights abuses against Flec members held in prison there.

The Angolan Armed Forces maintains a large presence in Cabinda and this will be stepped up to ensure security during the tournament.

The stadium will hold 20,000 people and is 15km north of Cabinda city.

The province is reached only by air from within Angola and the games there are unlikely to attract large visiting crowds.

In reply to StrollingMolby (post #11)

....mmmmm....unfortunate though this incident is, it doesn't seem to have particular implications for anything that SOCO's seismic contractors are doing near Necuto. According to this report the Togo team were training in Congo Brazzaville and must have therefore been attacked on the northern border of the Cabinda North area....so that would be 20-50 miles away, depending on which bit of the boarder was being crossed.

Whatever the case, security has always been an issue in Cabinda - though arguably it may have got a bit worse again in recent weeks/months  ...........despite the reassurances of someone who really should have known better:

The oil-rich enclave of Cabinda will be safe during the Africa Cup of Nations football tournament in January, a government minister and former separatist leader have said.
“I categorically insist that all conditions for peace and security have been met in Cabinda,” said Antonio Bento Bembe, who once led the Front for the Liberation of the Enclave of Cabinda (FLEC) but is now a minister without portfolio tasked with human rights.

......not for nothing, I suspect, that the summer NED appointment was of a very experienced diplomat!

ee

ee - fwiw I was in Brazzaville in 2nd week of December (charming place) - there was quite a lot of chat about the increased guerilla / criminal activity in Cabinda N. The point was made that white man's operations are always targets as they have vehicles and are expected to have cash.
Ops guy from MAG Industries potash activities near Mengo said that locals are keeping the criminals (in his mind) at bay for now.

In reply to macrus (post #13)

Just on the scale of these things, I notice that the FLEC movement was said to have less than 200 participants, according to (IIRC) Euronews tonight. Its a serious problem but it needs to be kept in perspective.

I imagine that one consequence of the blows to Angolan prestige will be further attempts to resolve the issue by one means or another - and in the meantime one hopes that the Chinese seismic crews aren't an attractive-enough target......

....fortunately Cabinda isn't (yet, at least) a key area of activity for SOCO.

ee

In reply to emptyend (post #14)

Cabinda isn't (yet, at least) a key area of activity for SOCO.

Indeed...."yet" being the operative word :-)

Whatever, I certainly don't see Cabinda as being a more dangerous place to operate than Lake Albert on the DRC/Uganda border, where Exxon, Total and ENI amongst a number of majors are apparently only too happy to invest multi billion dollars! Nonetheless, since Sonangol is the operator, one hopes they've taken on board the sensitivities in the enclave after their first troubled seismic attempt a year or so back. For sure, Soco's new NED is an excellent appointment in helping achieve smooth operations on the ground.

In reply to davjo (post #15)

Cabinda isn't (yet, at least) a key area of activity for SOCO.

Indeed...."yet" being the operative word :-)

Well actually I thought that "at least" was equally important to the "yet"........ I wouldn't be surprised to see them trade part of their Cabinda position in due course.

Whatever, I certainly don't see Cabinda as being a more dangerous place to operate than Lake Albert on the DRC/Uganda border, where Exxon, Total and ENI amongst a number of majors are apparently only too happy to invest multi billion dollars!

Yup - there isn't a great deal in it (except that Cabinda is more accessible). Political stability and accessibility is a rare combination in Africa which (IMO!) is a point that the market should take on board if there should happen to be oil finds anywhere where such a combination exists [;-)].

ee

From the newswires - possibly more news on this tomorrow at the AGM?

*DJ China's BGP Resumed Seismic Works In Angola's Cabinda-Sources

 

 

  (MORE TO FOLLOW) Dow Jones Newswires

 

and here's the more to follow (doesnt add much):

DJ China's BGP Resumed Seismic Works In Angola's Cabinda-Sources

 

  LONDON (Dow Jones)--China's BGP Inc. in late May restarted seismic works to find oil in Angola's Cabinda enclave after being unable to operate following an attack on a Togo soccer team, people familiar with the operation said recently.

  Local conditions were deemed too unsafe after an ambush killed two Togo soccer officials in January, two months after workers at the unit of China National Petroleum Corp. were attacked by local separatists.

  The Front for the Liberation of the Enclave of Cabinda claimed responsibility for both attacks.

Might as well pick up this old specific thread on Cabinda for this news.......if indeed it is news and indicative of some action earlier than year-end:

The state-run Angolan Oil Company (SONANGOL)  announced over the last weekend the beginning of well drilling phase soon in the Cabinda North block of the Angolan on-shore, in the localities of Cacongo and Buco Zau.

This was said to Angop on Tuesday by Cabinda North Block's director, Ernesto Pedro Taya.

"soon" may well be an "African time" expression - but note that they appear to have selected drilling targets (and will presumably be clearing sites, building roads etc pre-spud).

ee

No idea why readers were panicking on ADVFN and appeared to be happy to sell the company at £3.50-4........Angola and Block V are the two parts of Soco's African portfolio that I have always found exciting and have been keen to see them drill as it looks like these are the two areas that seem the most promising in Soco's Africa portfolio.

According to the March presentation we are due to drill in Angola on Oct 2012.

 Cacongo and Buco Zau are Adjacent to block 0 ...

Worth reading this about Angola Geological heritage

Angola is made up of the Kwanza, Congo and Namibe sedimentary basins, but so far only the Congo and Kwanza basins have yielded oil in commercial quantities.

The southern coastal region of Angola remains unexplored after the failure of blocks 09, 21, 22 and 25 which are located offshore of southern Luanda. Drilling has also been unsuccessful off the coast of Namibia, Angola's southern neighbor, which has further discouraged exploration.

Engineers in Sonangol's geological department insist, however, that they want to begin a comprehensive survey of blocks in the Namibe basin, which they believe may yet produce surprises.

To date, it is clear that geology has favored blocks in the north of the country.

An example of success is Block Zero that lies off Cabinda and is situated just to the north of the Congo River. The proximity to the river is key. The concession's map shows that the biggest reserves fan out from the mouth of the river. It is thought that this is due to the deposit of large quantities of vegetable material which eventually became oil.

Hence the huge current interest in blocks beyond the range of existing discoveries.

http://www.sonangol.co.ao/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hDl5AQUzN_QwMDwyBTA09DR2djAy8XYwMPE6B8JLJ8gIUbUN4_MMDHx9XQwNyUIt1mBHSHg1yLU7-7uxFeeQNzcwLypgTkzSDyBjiAowG6flQfmBnr-3nk56bqF-SGRhhkemYGpCsqAgDi_dGw/dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfMURUVDU2TzEwMDFSNTBJMUFDMzBKRDMwOTY!/

One should also consider the Crude that is being produced on Block 0 because if Soco and Co do find Oil then it is likely to be of the following spec i.e. Good

Nemba: crude with low viscosity and low sulphur content (38.7º API and 0.19% sulphur), produced on Block 0 which is located in Malongo, Cabinda.

 

Value of Angola's crude In comparison to the European (Brent ) crude from Nemba and Palanca is sold at a premium (i.e. it is expensive)

For being light and appropriate for production of gasoline, crude extracted from fields Nemba and Palanca is of preference for the USA.

Also worth noting :

Commercial reserve discoveries in the deep waters of Block 17 and neighboring Blocks (14, 15 and 16) marked the turning-point in the history of oil production in Angola. In 1996 when the reserves of Girassol were discovered in deep water on Block 17, Angola went from being a solid but average oil producing country to become a hotspot in the global search for major oil reserves.

Angola has a 80% success rate for deep water discoveries & currently produces in excess of 2m boepd.

Definetly worth reading the Sonangol website : http://www.sonangol.co.ao/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hDl5AQUzN_QwMDwyBTA09DR2djAy8XYwMPE6B8JLJ8gIUbUN4_MMDHx9XQwNyUIt1mBHSHg1yLU7-7uxFeeQNzcwLypgTkzSDyBjiAowG6flQfmBnr-3nk56bqF-SGRhhkemYGpCsqAgDi_dGw/dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfMURUVDU2TzEwMDFSNTBJMUFDMzBKRDMwOTY!/

Soco is also due to drill an appraisal well on the Dinge prospect in Nov 2012.

The big downside I am seeing is Soco only have a 17% WI in the field but good to have the likes of ENI involved :

Sonangol P&P (20% – Operator), Interoil (11%), Petropars (10%), Teikoku Oil (17%), Angola Consulting Resources (15%), ENI Angola (10%)

Companies that operate in Angola :

I would'nt discount this part of the portfolio or Block V as it is not drilling complete virgin territory as was the case with Congo Bongo.

http://www.energy-pedia.com/news/angola/interoil-sells-interest-in-cabinda-north-licence-to-petropars

Located in north of Angola and adjoining the Congo Brazzaville border, the 2,400 sq km Cabinda Norte is described as a low-risk onshore block in terms of exploration with a good potential for new discoveries and with opportunity to develop existing oil discoveries in the area in the so-called Zila ridge area near the coast and in the Dinge high area. Work commitments for the first three-year period include the acquisition of 1,200km of 2D seismic and the drilling of five exploration wells and three appraisal wells.

Interoil has plans to appraise the Dinge oil discovery in a fast-track appraisal/development programme and also acquire new 2D/3D seismic data.

The Cabinda onshore is underlaid by a graben separated from the main Atlantic rift by a basement high. The graben, known in the Democratic Republic of Congo (DRC) as the Lemba Trough, has its own kitchen, and is a proven oil play in Cabinda and in DRC (the Lindu minor oil discovery). Chevron, then Gulf, extensively explored the area in the sixties and drilled an estimated 69 wildcats and four outposts in the 4,625 sq km area which is now under licence. Gulf made one gas and five oil discoveries considered marginal at the time. Another seven wells had oil shows. New exploration techniques (3D and much improved 2D seismic), better geological models and new concepts, and the excellent wildcat coverage for calibration of models, all add up to make the area ripe for new discoveries.