Oil and Gas: Ophir energy's exciting African campaign

Ophir has the rights to acreage in Western Sahara and Somaliland, two areas seeking international sovereignty.

"We believe that we are supporting the appropriate resource holders or else we would not be there. We would love to be investing significant capital into them." 

Ophir chief executive Nick Cooper 

By Marshall Van Valen

The London-based oil and gas explorer, Ophir energy, is appraising gas finds in equatorial Guinea and tanzania that will be developed into major projects by 2020.

Ophir Energy, an Africa- focused explorer founded in 2004, has entered into a crucial year as it appraises major gas fields.

With about 1.25bn barrels of oil equivalent in reserves, Ophir is due to make investment decisions on two of its most promising projects within the next few years.

This is our most exciting campaign

Ophir chief executive Nick Cooper tells The Africa Report: "We are in the middle of what we would see as the most exciting campaign we have ever drilled."

Ophir holds an 80% stake in Equatorial Guinea's Block R, and the company expects to develop Africa's first floating liquefied natural gas (FLNG) project.

Ophir will drill three wells, in a mixture of appraisal and exploration, this year, says Cooper.

"In Equatorial Guinea, the main event is around appraising the gas and finding a bit more gas for the FLNG project. But in addition there is the potential that the Niger Delta oil play extends under the acreage, and so we will be testing that."

The company now estimates that it has 2.6 trillion cubic feet (tcf ) of recoverable reserves in Block R and that this year's drilling will take it up to more than 3 tcf.

Cooper says backing the FLNG project has been a learning process both for the company and the government.

"FLNG has been talked about for a long time, and I think there was a fair bit of cynicism around it. That said, incrementally, all the parts of the project have been proven elsewhere."

He says Ophir and the Malabo government are both seeking to maximise value: "It is possible to structure them [FLNG projects] like the gas equivalent of an FPSO [floating production, storage and offloading] project, where the oil companies do not need to own the vessels."

Ophir expects to make a final investment decision by mid-2015 and to produce first gas by 2018, at least two years before LNG projects in Tanzania take off.

Ophir partners with BG Group on Blocks 1, 3 and 4 in the Tanzanian offshore.

"The scale of the project at the moment is two 5m tonne trains. Each 5m tonnne train needs about 6tcf recoverable," explains Cooper.

He says that before the year is over, the company is likely to have discovered enough gas to supply a third LNG train.

Partners to develop

Ophir holds a 40% stake in those Tanzanian blocks, and its activities there highlight the company's business model.

It is in the process of selling a 20% share, valued at $1.29bn, to Pavilion Energy, a subsidiary of Temasek, a Singaporean investment fund.

Cooper explains: "Our cost of capital is a lot higher than that of a big oil company, which means we are very prepared to fully fund and undertake big exploration programmes, and we do that.

"But when we get to the more mature phases where we have been successful, we bring in bigger oil companies who can help to fund that development phase."

While Ophir has had its success with gas discoveries, it is now drilling in Gabon's Padouck Deep field to see if it holds similarities to the fields discovered in offshore Brazil.

The company is also evaluating three potential plays on its L9 block in offshore Kenya.

In March, Ophir farmed in to two blocks in the Seychelles, continuing its trend of looking for large blocks to operate.

"Africa is substantially more licensed by the oil and gas sector than it was say, five or six years ago," says Cooper.

Ophir has the rights to acreage in Western Sahara and Somaliland, two areas seeking international sovereignty.

"We believe that we are supporting the appropriate resource holders or else we would not be there. We would love to be investing significant capital into them." 

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