West Africa Could Lead The World's Next Production Boom

During the early 1970s, Saudi Arabia cut production as a reminder that it held the cards to the world’s petroleum resources. What the swing country did not count on was the slew of development and production that would subsequently take place in the North Sea. As a result, a new oil supply was born far away from the Middle East.

Fast forward to today: With oil saturating the market again, Saudi Arabia has kept its spigots on this time to try and prove once again its place on top of the hydrocarbon pyramid. Despite its effort to slow production – primarily from shale in the United States – there is still room for surprise in the oil marketplace.

The small offshore oilfields of West Africa, if exploited properly, could become the next big economical play even as oil prices hover around $60 a barrel, said Keith Millheim, a director at Atlantis Offshore, an offshore technology company focused on well testing, production and drilling. And, all it takes is one adventurous company to get the ball rolling.

Hercules Inks 5-Year Contract with Eni in W. Africa

Hercules Offshore announced that it has signed a five-year contract with a subsidiary of Eni S.p.A. for use of the Hercules 260 (250' ILC) in West Africa. The dayrate under the contract will range from a minimum of $75,000 per day when the price of Brent crude oil is $86 or less per barrel, to a maximum of $125,000 per day when the price of Brent crude oil is $125 or more per barrel. Contract commencement is expected in early April 2015. Costs for contract specific upgrades will be reimbursed by the operator.

Saipem and Dangote Form JV to Tap Central/West African Market

Italy's Saipem S.p.A. disclosed Wednesday that it has entered into a Joint Venture with Dangote Group, one of Africa’s leading companies, to create a new company named Saipem Dangote E&C. Saipem Dangote E&C is a significant new player in the Nigerian and Central/West African market, with high technical and financial capabilities. It aims to secure complex Engineering & Construction projects and ensure a realization capacity focused on efficiency, in terms of costs and timing, and flexibility, in order to respond to different needs related to specific projects, to local content and to the Country’s context. 

Africa's Oil 'Sweet Spots' Still Viable After Price Rout

African oil explorers will keep drilling in select locations such as onshore east Africa and less complex projects off the West African coast even with oil at $60 a barrel, executives and analysts told Reuters. 

But they warned that African governments with reserves in less attractive locations should revise terms now or forfeit the investment, leaving the oil and gas underground. "There are still some exciting areas in Africa like east Africa and in particular the onshore areas," said Aidan Heavey, CEO of one of Africa's biggest explorers Tullow Oil, referring to drilling projects in Kenya and Uganda. "This is certainly not the end of African oil - far from it."