The last frontier

Andrew Scutter, EIC

July 1, 2017

EIC’s Andrew Scutter details the challenges and opportunities present offshore Senegal and Mauritania.

Senegal Discoveries Map.Image from Far Ltd.

During a challenging period for the industry, West Africa has managed to further justify its position as one of the last true frontier regions. Discoveries in Senegal and Mauritania have the potential to transform both countries into net exporters within the next five years.

Senegal persevered with over 140 exploration wells of limited success until Cairn Energy’s FAN-1 and SNE-1 wells in the Sangomar Deep Block in 2014 yielded major results. Both wells discovered significant hydrocarbon resources, with the SNE field having an estimated 285m barrels of 2P (proven and probable) reserves. Cairn is currently planning the SNE-6 appraisal well and could reach first oil as soon as 2021.

In 2015, a second major discovery was announced by Kosmos Energy, the Tortue West structure, which straddles the Senegal/Mauritania border. Subsequent discoveries in both Mauritania and Senegal established the Greater Tortue Complex that has a Pmean gross resource estimate of 25 Tcf of gas. A unitization agreement is currently being worked on between the two countries, and the partners, on how best to jointly develop the field. A development concept is set to be finalized in 2017 or early 2018, and will most likely be a near-shore, 2.5 MPTA FLNG vessel, with a pre-treatment platform and a condensate offload vessel. KBR was awarded the pre-FEED contract for the upstream aspects of the project, and sources suggest that the company is preparing to carry out FEED studies.

The most recent discovery in the region was made south of the Tortue Complex in the Cayar Offshore Profound Block. In May 2017, BP announced the discovery of a 15Tcf gas accumulation within a Lower Cenomanian reservoir. The size of the find, combined with the nearby Taranga discovery, makes it possible that a second LNG hub, after the Greater Tortue Complex, may be created within the area.

Both Senegal and Mauritania were quick to enter a memorandum of understanding with Kosmos,, and later BP, which sets out the principles for an intergovernmental cooperation agreement for the development of the cross-border Greater Tortue resource. Kosmos believes that gas demand will have risen by the time the field becomes operational, and is looking to capitalize on the current low contractor costs.

Due to the continued exploration success, there has been increasing interest from companies to explore the region. A new 3D seismic survey was completed offshore The Gambia by Erin Energy. The area has massive potential as it lies in the block directly south and on the same trend as the FAN-1 and SNE-1 hydrocarbon discoveries. Likewise, France’s Total recently signed an exploration and production sharing contract for the Rufisque Offshore Profond Block, which is a deepwater and ultra-deepwater concession.

Significant challenges will need to be overcome to develop these fields as Senegal and Mauritania lack the infrastructure and capabilities required for these billion dollar projects. Senegal and Mauritania are realistic about their capabilities, and are keen to utilize experienced foreign suppliers, so long as some form of local partnership is made. This provides opportunities for UK supply chain companies with extensive offshore experience to offer their services.

Andrew Scutter is the Upstream Sector Analyst at the EIC, and covers this remit globally. He has a degree in Geology from the University of Leeds and a master’s degree in Petroleum Geoscience from the University of Aberdeen. Andrew has also gained experience working with an international operator, CNR.