‘Serious problems’ with rig’s blowout preventer
Block G drilling could now start in Q2: Panoro
ExxonMobil to leave in Q2 after three decades
One of Equatorial Guinea’s most exciting drilling campaigns in years has been canceled after just two weeks due to “serious problems” with the project’s Island Innovator drilling rig, the OPEC member’s oil ministry said Feb. 9, the same day ExxonMobil confirmed it would exit the country in Q2.
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London-based producer Trident Energy and its partners Panoro and Kosmos kicked off a three-well drilling campaign on Block G offshore Equatorial Guinea on Jan. 22, with the first infill well expected on stream in the first quarter and all three by mid-year, Panoro said at the time.
The partners hoped to “materially” boost Block G production by as much as 10,000 b/d from 25,000 b/d in 2023, according to reports. The Island Innovator semi-submersible drilling rig was then scheduled to move to Block S and drill the Kosmos-operated Akeng Deep ILX exploration well, targeting a 180-million-barrel resource.
However, in its statement on LinkedIn Feb. 9, Equatorial Guinea’s Ministry of Mines and Hydrocarbons said “serious problems” with the Island Innovator’s blowout preventer had forced the companies to find an alternative.
The equipment failed to “respond to control commands to open or close valves as needed,” which could lead to a serious accident during drilling and the “uncontrolled release of crude or natural gas to the surface,” the ministry said.
The statement followed a meeting between minister Antonio Oburu Ondo — the current OPEC president — and Trident General Manager Pierre Capo.
Meanwhile Panoro Energy said the drilling campaign would likely now begin in the second quarter with an alternative rig.
“Upon recommendation of the operator, Trident Energy, the joint venture has decided to terminate the current rig contract. The joint venture is of the view that the rig is not operationally in a condition to safely drill the wells,” the Oslo-listed company said. “The operator is, on behalf of the joint venture, evaluating alternative options that will allow for the recommencement and safe completion of the intended drilling campaign (including the Kosmos-operated Akeng Deep exploration well) at the earliest opportunity, potentially during the second quarter subject to rig availability and terms of alternative options.”
John Hamilton, Panoro’s CEO, said: “The joint venture will not compromise on safety, which is of paramount importance, and has acted decisively and responsibly in taking this course of action.”
The ministry said the partners were “evaluating alternatives for a safe way to continue with the drilling campaign.”
Trident Energy holds a 40.375% working interest in Block G, alongside Dallas-based Kosmos Energy with 40.375%, Panoro 14.25%, and state-owned GEPetrol 5%.
Equatorial Guinea is desperate for new drilling after seeing crude output collapse in recent years due to underinvestment and technical issues at mature fields. Production peaked at 289,000 b/d in 2015, but has fallen to 50,000 b/d, according to the OPEC Survey from Platts, part of S&P Global Commodity Insights.
However, in a statement to S&P Global Feb. 9, ExxonMobil said it would complete its withdrawal from Equatorial Guinea in Q2 2024, leaving state-owned GEPetrol to manage the country’s largest field, Zafiro. The decision ends 30 years in the country for the US oil company, which made key discoveries there in the mid-1990s.
“Consistent with ExxonMobil’s long-term strategy, Mobil Equatorial Guinea, Inc. (MEGI) will transfer its interests in the company’s remaining investment to the government of Equatorial Guinea in 2Q 2024,” it said in a statement. “Our focus now is on a safe handover of operations and caring for all impacted by this change.”
In July, GEPetrol managing director Teresa Isabel Nnang told S&P Global that the company would in practice leave as early as March 2024, despite its operating license expiring in October 2025.
Taking over Zafiro, which has experienced technical issues in recent years, was “exciting” but “challenging,” she added. The NOC has never operated a project of its own.
ExxonMobil’s departure from Equatorial Guinea, one of Africa’s most exciting oil hotspots just two decades ago, follows a wave of divestments by international oil companies from mature basins in the region as they shift focus to deepwater oil and gas projects and frontier basins like Namibia and Guyana.