Equatorial Guinea Oil And Gas Review

By Eric Fox | June 13, 2012 AAA

Equatorial Guinea is expected to see an increase in oil and gas production over the next few years as that country benefits from the startup of various offshore projects under development by the oil and gas industry.

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Overview
Equatorial Guinea reported proved oil reserves of 1.7 billion barrels at the end of 2010, and average oil production of 274,000 barrels per day in 2010. Oil production peaked at 358,000 barrels per day in 2005, and has been in a natural decline since that time as several producing fields matured.

Operators
Marathon Oil
(NYSE:MRO) is involved in Equatorial Guinea and reported average production of 111,000 barrels of oil equivalent (BOE) per day from its operations here in 2011. This production was composed of 38,000 barrels of oil and 443 million cubic feet of natural gas per day.

Marathon Oil owns a 63% working interest and operates the offshore Alba Field in Equatorial Guinea, and has interests in a liquefied petroleum gas and liquefied natural gas facility that serves several fields in the area.

Noble Energy (NYSE:NBL) is active in Equatorial Guinea and started up production from the Aseng Field on offshore Block I in November 2011. The project has gross capacity of about 60,000 barrels of oil per day and has estimated recoverable resources between 100 million and 120 million barrels of oil.

Noble Energy also has existing natural gas production from the Alba Field operated by Marathon Oil and reported net production volumes of 240 million cubic feet of natural gas and 20,000 barrels per day of liquids from this field.

One project under development by Noble Energy is on offshore Block O at the Alen Field, which will produce both condensate and natural gas. The condensate will be transported to a floating production, storage and offloading (FPSO) unit located at the Aseng Field, while the natural gas production will be reinjected into the field. The company expects gross production of 37,000 barrels per day from the Alen project and a startup in the fourth quarter of 2013.

SEE: Understanding Oil Industry Terminology

Hess Corporation (NYSE:HES) is the operator of the Ceiba Field and Okume Complex in Equatorial Guinea. Oil was discovered at the Ceiba Field in late 1999, with production starting up in November 2000. The Okume Complex started up production in 2006 and produces from four oil and gas fields in the area. Hess estimates that these properties will have net production of 45,000 BOE per day in 2012.

Hess has allocated $500 million in capital in 2012 for the development of oil and gas assets in Equatorial Guinea and plans to drill wells here during the year.

Exxon Mobil (NYSE:XOM) is the largest producer in Equatorial Guinea and operates the Zafiro field. The field started up production in the mid-1990s and produced approximately 121,000 barrels per day in 2011.

The Bottom Line
Equatorial Guinea will see higher oil and gas production going forward, as this African nation benefits from first production at several offshore projects that have been under development for years. This production is sorely needed and will put the country back into growth mode again.

SEE: A Primer On Offshore Drilling

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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