Hydrocarbons discovery in the Gulf of Guinea to boost Côte d’Ivoire’s reserves

In September 2021 Côte d’Ivoire announced the country’s first large-scale oil and gas discovery in two decades. The discovery was made by Italy’s Eni in Block CI-101 on the Baleine prospect, some 60 km off the coast on the Gulf of Guinea. According to initial estimates, the discovery is thought to total 1.5bn-2bn barrels of oil and 1.8trn-2.4trn cu feet of natural gas. This would significantly increase the country’s reserves, which as of 2019 stood at 100m barrels of oil and 1trn cu feet of natural gas.

Another key player in Côte d’Ivoire’s hydrocarbons sector is France’s TotalEnergie, which along with Italy’s Eni was awarded exploration and production contracts in 2019 worth $185m. As of 2021 the country had identified a total of 51 oilfields, four of which were in production and 26 in the exploration stage.

Considering international oil companies had typically been shying away from potentially expensive deepwater discoveries at the time, as hydrocarbons prices plummeted in the wake of the Covid-19 pandemic, oil majors’ interest in Côte d’Ivoire suggests a belief that the country holds significant potential.

It also reflects the success of the partnership models currently used for energy projects in Côte d’Ivoire. Eni had undertaken its exploration and production activities in the block as part of a consortium with Petroci, the state-owned oil company, and the government now owns a 10% stake in the discovery.

According to estimates made by energy research firm Rystad Energy, the initial early production systems phase is expected to start in 2023, and full field development is set to be completed by 2027.

Moving Ahead

Côte d’Ivoire is now facing the challenge of turning its discoveries into viable production, while maintaining momentum in its offshore exploration and production activities.

This, in turn, could see the country ramp up its production of refined products and expand its role as an exporter within the region. The discoveries should also take pressure off domestic demand for crude oil and gas as the country continues on a path of robust economic growth and its population expands.

As Thomas Camara, then-minister of petroleum, energy and renewable energy, said upon the announcement of last September’s discovery, the find will not only “greatly increase the proven reserves of Côte d’Ivoire,” but also strengthen its “oil and gas production in the years to come”.

The majority of Côte d’Ivoire’s exploration and production has traditionally been carried out in the central and eastern regions of its maritime zone. In the latter area, however, a dispute over boundary lines with neighbouring Ghana hampered activity for some time, with this dispute only resolved after a ruling by the International Tribunal for the Law of the Sea in 2017. Nonetheless, in the years prior to the 2021 discovery, survey work continued to indicate major potential throughout the region.

A US Geological Survey report published in 2000 suggested that just over 1bn barrels lay in the Gulf of Guinea province, along with 10trn cu feet of natural gas and 282m barrels of natural gas liquids. Further surveys have echoed the view that there is significant potential in the country’s waters, with numerous discoveries made indicating a trend of natural gas in the Upper Cretaceous, along with oil in the Lower Cretaceous stratigraphic and structural traps.

Black Gold

Eni’s discovery will transform Côte d’Ivoire’s oil and natural gas output. Oil production had fallen to around 34,000 barrels per day (bpd) as of 2021, from four blocks: C-11, operated by Petroci; CI-26 and CI-40, operated by Canadian Natural Resources; and CI-27, operated by France’s Bouygues. If initial estimates are correct, the CI-101 block would multiply the country’s current proven reserves by a factor of 20.

The oil discovered is light and extends into the adjacent block CI-802, which is also an Eni concession. The Italian oil company managed five blocks in Côte d’ Ivoire as of May 2022, with CI-205, CI-501 and CI-504 as the remaining three holdings. ENI has committed to expanding its exploration operations to include CI-180 to “assess the significant upside potential of the overall structure”, according to a press release published in September 2021.

The transition from exploration to production is also expected to be rapid. The government announced in December 2021 that it was planning on seeing a daily output from the new find of around 12,000 bpd of oil and 17.5m cu feet of gas by the second quarter of 2023. From there, production will ramp up to between 75,000-100,000 bpd – along with 140m cu feet of gas – by 2026.

Future Prospects

While the pandemic initially delivered a hit to the global hydrocarbons sector – forcing oil companies to scale back operations and, in some cases, face severe financial difficulties – Côte d’Ivoire’s success in pursuing and discovering new fields shows that a significant recovery in exploration and production activity is now under way – and with Africa the leading global destination.

As supply from legacy oil and gas fields diminishes across the continent, there is a need for new exploration activities, according to an African Energy Chamber report published in the first quarter of 2022. The report notes that Eni’s Baleine discovery is one of the nine largest drivers of oil and gas investment in the continent between 2020 and 2025, sharing the spotlight with projects in Angola, Mozambique, Mauritania, Algeria, Uganda, Kenya and Senegal.

Attracting Investment

While Côte d’Ivoire’s oil and gas output is considerably lower than West African hydrocarbon giants such as Nigeria and Ghana, the country has made a major leap forward with this discovery. The country’s possession of a major refinery also adds to its attractiveness as a centre for regional oil and gas traffic. Indeed, the Société Ivoirienne de Raffinage facility in Abidjan is the largest refinery in French-speaking West Africa.

Developing this into an integrated upstream-downstream chain – and upscaling to take account of the sheer size of the new discoveries – will require considerable effort in the years ahead. In order for this to be successful, significant levels of investment will be needed, but Côte d’Ivoire’s long history of dealing with international oil firms and proven regulatory framework, human resources and local infrastructure make it an attractive location for investment.

In recent years oil majors have cited Côte d’Ivoire’s political stability and developed local infrastructure as reasons for investing in the country. As the economy continues to grow and recover from the impact of the pandemic, the sector is expected to remain an attractive option for foreign investors. At the same time, Petroci has gained experience in oil and gas since it was founded in 1975, making it well positioned to share knowledge and expertise with international oil companies looking to invest in West Africa and beyond.