Côte d'Ivoire's new investments in hydrocarbons projects

With a renewed focus on promoting its hydrocarbons potential, Côte d’Ivoire is aiming to bring fresh investment to the exploration and development of its oil and gas resources. Although the country has the hydrocarbons-rich Gulf of Guinea along its shores, sizeable discoveries have eluded oil companies in recent years. “We have had small oil and gas discoveries in Côte d’Ivoire, but nothing like Ghana or Senegal. Because there have not been many successful results, many areas remain unexplored,” Cheikhou Badio, director-general of the African Society of Financial Engineering, told OBG. As a result, oil production is relatively low by regional standards, but new investment in exploration could help counter the decline in domestic output, and more favourable rules for international players have seen a spate of new arrivals in the upstream segment.

Production Base

In 2018 annual oil output reached 12m barrels, averaging 32,809 barrels per day and 997,948 barrels per month, according to the Ministry of Petroleum, Energy and Renewable Energies (Ministère du Pétrole, de l’Energie et des Energies Renouvelables, MPEER). This represented a 6.6% decline compared to 2017, and although government statistics registered an improvement in the first 11 months of 2019 – when 12.2m barrels were produced, representing an increase of 16.1% year-on-year – this was still far from the state goal of 100,000 barrels per day.

In the shorter term, however, oil production is likely to be impacted by the global outbreak of Covid-19 in early 2020, which resulted in a drop in demand for energy as many large scale projects were halted.

Four fields are responsible for the country’s oil and gas production. The two largest, Baobab and Espoir, are in blocks CI-40 and CI-26, respectively, and are operated by Canadian Natural Resources. Another field, Lion et Panthère, is in CI-11 and is majority owned by domestic petroleum company Petroci, while the fourth field, Foxtrot, is in CI-27 and operated by Foxtrot International, a subsidiary of French company Bouygues.

Block Party

With production concentrated in a small number of areas, the government has stepped up efforts to attract exploration in unexplored regions. It has achieved this, in part, by extending the size of the demarcated oil blocks in 2017, reducing their number from 61 to 48. In the same year the MPEER undertook an international roadshow to familiarise investors with the country’s untapped potential. This resulted in a large amount of new interest, and after signing only two production-sharing agreements in 2016 – with Ophir/African Petroleum for block CI-513 and Total for block CI-605 – the number of deals rose dramatically in 2017, when 13 new exploration contracts were signed. UK-based Tullow Oil signed an agreement to manage exploration and production efforts at six blocks, CI-301, CI-302, CI-518, CI-519, CI-521 and CI-522, and Italy’s ENI secured 90% stakes in two deepwater blocks, CI-101 and CI-205, with Petroci holding the remaining 10%. Five blocks were awarded to BP and US-based Kosmos Energy, which partnered to explore and operate plots CI-526, CI-602, CI-603, CI-707 and CI-708, with Petroci to maintain a 10% stake in each. In early 2018 Tullow Oil also won two additional exploration licences for blocks CI-520 and CI-524.

In May 2019 the MPEER awarded exploration blocks to France’s Total and Italy’s Eni. The former won the contract to operate CI-705 and CI-706, which will involve an investment of $90m, while Eni was awarded a controlling share of blocks CI-501 and CI-504, for which it has allocated $95m to exploration activities. In November 2019 five tracts were also made available in a licensing round in three newly demarcated blocks, bringing the total to 51, and two existing licence areas.

These new contracts and renewed drive to boost exploration by the MPEER are a positive sign for the domestic oil and gas sector. However, for market interest to translate into significant production increases, Côte d’Ivoire will need at least one sizeable discovery to put it firmly on the regional hydrocarbons map.