Shaping the future of oil exploration and production in Africa

Kehinde O. LADIPO (FNAPE, FAS)And Adedoyin LIPEDE (FNAPE)

LekoilChurchgate HouseVI, Lagos

THE FRONTIER INLAND BASINS OF NIGERIA: STRATEGIES TO REALIZE THE SIGNIFICANT UNDISCOVERED

POTENTIALS

OUTLINE Introduction: The Changing Petroleum Landscape of Africa and It’s Rift Basin Petroleum Systems

Africa’s Rift Basins: Analogues for Prospectivity and Hydrocarbon Potential for Nigeria’s Frontier Inland Basins

The Petroleum Systems of the WARS and CARS

The Undiscovered Potentials: Challenges and Enablers

Concluding Remarks

Acknowledgement

THE FRONTIER INLAND BASINS OF NIGERIA: STRATEGIES TO REALIZE THE SIGNIFICANT UNDISCOVERED POTENTIALS

The Changing Petroleum Landscape of Africa

LIBYAALGERIA

NIGERIA

EQ

ANGOLA

CONG

O

1987 OIL PRODUCERS

GABON

30YRS

LIBYAALGERIA

NIGER

EGYPT

CHAD

ETHIOPIANIGERIACAR

KENYA

TANZANIA

ZAMBIA

MOZA

BIQU

E

MALAWI

BOTSWANANAMIBIA

SOUTH AFRICA

EQ

GHANATOGO

MAURITANIA

MALI

ANGOLA

DRC

CONG

O

SUDAN

CAME

ROON

2017 OIL PRODUCERS

GABON

LIBERIA

SENEGAL

Africa’s Contributions to Global HC Resources

OIL Resources

GAS Resources

Source: BP (2017)

Rift Basins of Africa

2

1

34

5

6

4

5

6

GoG (Dahomey, Tano, Ivory Coast, Sierra Leone-Liberia: Lower Cretaceous Basin)

Onshore SNGBC Onshore Mesozoic Basin

Offshore Orange and Luderitz Basins Lower Cretaceous Tr

ansf

orm

Mar

gins

Source: Purdy and McGregor 2016

44

2

1

3

West African Rift System

Central African Rift System

East African Rift System Intra

-Cra

toni

cBa

sins

Cretaceous Basins – West Africa Transform Margin (GoG)

Benue Trough: Tectonics and Structure

Source: Benkhellil 1989

Benue Trough: Tectonics and Structure

Source: Benkhellil 1989

Dahomey BasinSource: Lekoil

Benue Trough: Tectonics and Structure

Source: Benkhellil 1989

Source: Olawoki (2018; in press)

Bida Basin

Benue Trough: Tectonics and Structure

Source: Benkhellil 1989

Gubio-Maiduguri Sub-Basin

Source: Adegoke, O.S. et al; 2015: GSEPM Special Publication

Benue Trough: Tectonics and Structure

Source: Benkhellil 1989

Regional Cross Sections Across The Illumedin Basin

Structural Framework of Analogous West and Central Africa Rift Basins

Regional Cross Sections Across The Termit Basin

Regional Cross Sections Across The Illumedin Basin

Structural Framework of Analogous West and Central Africa Rift Basins

Regional Cross Sections Across The Termit Basin

Regional Cross Sections Across The Illumedin Basin

Structural Framework of Analogous West and Central Africa Rift Basins

Cretaceous Basins – Stratigraphic Framework

Source: Edegbai, 2018

West African Transform Margin (GoG ) Petroleum SystemGeneralized Stratigraphic Framework

• Multiple Plays and Play Concepts

• Multiple SRs and charge mechanisms

• Synrift play remains least tested (Seme, Aje, Ogo Fields)

Schematic Diagram of ??Working Petroleum Systems of the GoG

SemeAje

Ogo

Mahoganey

Lacustrine

Shelf

Modified after Kjemperud et.al; 1992

Cretaceous Basins – West Africa Transform Margin (GoG)

Source: Pan African Petroleum

Offshore LiberiaOffshore Ghana (Tano-CTP Basins)

Onshore-Offshore Togo (Dahomey Basin)

Source: Emma Tyrrell et al. 2017: GeoEpro Bull. Vol. 14,.

Lower Cretaceous: Paleogeographic Reconstruction

Dahomey Basin (OPL310)

Gross GDE of the WARS Syn-Rift infill shows typical deltaic and alluvial fan depositional systems which infill the asymmetrical mini basins

Generic model of lacustrine deposition good predictor of facies, i.e. by mixed fluvial and low relief deltaic and lacustrine mudstone facies

Genetic sequences similar to the “Richmond and Fundy” type lacustrine genetic sequences, depending on latitude position, ca. low to mid latitude

L. Cretaceous Petroleum System: Source Rock Distribution and Maturity

(after Ejedawe 2007)

Lower Cretaceous Petroleum System: Benue Trough MaturityMaturity of Source Rocks Upper Benue-Chad Basin Type I (lacustrine algae), Type III and Type IV

kerogens Mixed lacustrine-terrestrial environment under

suboxic to relatively anoxic conditions. Potential for perhaps Lower Cretaceous petroleum

system Good mature SRs in the Bima (lacustrine) and Fika

Shales encountered in the key discovery wells Vitrinite reflectance (%Ro) and Tmax values of the

lacustrine shales ranges from 1.12 to 2.32 VRo% Gas prone SR facies Wells Ziye-1, Wadi-1 Kinasar-1 proved gas shows in

the Gubio-Maiduguri Subbasin; only within the Sweet Spot’

Fluid Inclusions confirm hydrocarbons within calcite cements from the Lower Benue Trough (Asu River Group, Albian

and Eze Aku Shales, Turonian age) and Middle BenueTrough (Arufu Lst., Albian)

VR data >2.6% in L. Benue Trough and up to 1.4% in Middle Benue indicative of maturity of SR (i.e. with the OGW and higher)

Timing of Expulsion and Trapping remains unresolved

Onshore Dahomey Basin Petroleum System (Tar sand Belt):• Estimated Resources- ca. 45Bbl (Source:

www.Ondostategovernment.com)

• 170BBl. In-place (after Coker pers. Comm)

• Estimated ca.5.8 Bbl of oil of hydrocarbon generated

• Additional and significant undiscovered potential from other highly prospective sub-basins to south and

Anambra Basin: • Marginal Gas and oil reserves proven in

Anambra River

Offshore Dahomey Basin Petroleum System:

Lower Cretaceous Petroleum System: Dahomey Basin

23

Cretaceous Basins – West and Central Africa Rift Systems

1. http://www.unitedhydrocarbon.com/operations/chad-africa/ 2. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65129613

Data Challenge

Data Management & Sub-Regional Cooperation

Attractiveness of Fiscal Policies

“Qualitative Technical Data is a key enabler to

unlocking the frontier African basins and significant

contributory factor in establishing appropriate

commercial terms to attract investors”

Challenges and Enablers: Exploration in New Play and New Basins

Subsurface data of the Frontier inland basins limited and inadequate

Several basins are typically characterized by:- No seismic or coarse, vintage 2D seismic grid, interspersed with postage stamp size 3D seismic inadequate to delineate hydrocarbon accumulation

o Deep imaging and high-fidelity 3D seismic to fully image the subsurface and capture the detailed stratigraphic geometries of the subsurface

Special technologies are needed to preserve the fragile wildlife, agrarian and tourist industries.

For examples wireless geophones and non-explosives sources deployed for seismic acquisition

National Agencies must acquire data and/or incentivize Data Vendors as well as E&P companies to increase data acquisition spread & density Bid Packages should include mandatory data Purchase Countries need to ensure the Restoration of Sovereign data Rights

Integrated Technical Studies key to locate sweet spots and define the right exploration strategies

Overcoming the Data Challenge: Data Availability and Quality

Sub-Regional Data Integration Country and sub-regional efforts to integrate the different data vintages, particularly geological and geophysical data due to the continuity of the tectonic basins

Maintenance of National Data Repositories A National Data Repository (NDR) is a data bank that seeks to preserve and promote

a country’s natural resources data, particularly data related to the petroleum exploration and production (E&P) sector.

A fundamental reasons for a country to establish an NDR is to preserve data generated inside the country by the E&P industry,

Promote investments in the country by utilizing data to reduce the exploration, production, and transportation business risks.

Sub-Regional G&G Studies – There is need to strengthen cooperation between countries to share data and

basin knowledge to understand the petroleum systems that cut across national boundaries

with regional data integration, the countries academia can leverage knowledge by carrying out regional studies to delineate potential hydrocarbon fairways

Data Management & Sub-Regional Cooperation

Balanced Government Take The larger Government Take is, the less attractive the contract is to the IOCs

Investors are attracted to regions or countries with balanced government take. For example progressive tax system, and production based Royalty, with limited govt. participation

Fiscal system where , when Prices are high Govt. take increases, when low they drop correspond, Such as Sliding Scale factors

System that strike a “Balance” between Prospectivity and Contract terms

Minimizing Front-End Loading A lot of countries need to switch from a heavily front-end loaded fiscal system

Reduce upfront payment of signature Bonuses, finding Bonuses, and production bonuses

Attractiveness of Fiscal Policies

Prospectivity Contract Terms

Field Size Distribution Type of System

Success Probability Signature Bonus

Exploration Drilling Cost Cost Recovery Limits After Daniel Johnston – international Exploration Economics, Risk, and Contract Analysis

Analogous rift basins contiguous to the Benue Trough have proven significant hydrocarbon resources, proven reserves and prospectivity, to drive prospectivity of the Benue Trough

The play concepts and play elements of the hydrocarbon system along the Benue Trough are similar and sometimes represent continuous petroleum systems to the adjacent rift basins, however specific data such as availability of 3D as well as geological and integrated models of the hydrocarbon systems are needed to reduce and manage the key risks

Data availability, data access and quality data and the right fiscal policies that will provide incentive and promote exploration will be key enablers to prove and enable the realization of the significant hydrocarbon potential

Successful exploration and commercial strategies will change the Petroleum landscape of Nigeria and Africa

Concluding Remarks

My Co-Author, Adedoyin Lipede

Lekoil Management Team and The Technical Team

Acknowledgement