Picture: ANA Files – Concentrated cloud of volcanic CO2 gas bubbles to the surface of Lake Nyos in Cameroon. Companies such as Anglo-French independent Perenco continue to make strides towards unlocking the full potential of the oil and gas market in Africa, the writer says.
By African Energy Chamber
Africa’s energy sector is growing rapidly owing to a series of ambitious exploration campaigns undertaken by independent oil and gas explorers. Companies such as Anglo-French independent Perenco continue to make strides towards unlocking the full potential of the oil and gas market. The African Energy Chamber spoke with Benoît de la Fouchardière, CEO of Perenco about the company’s upstream agenda and why Perenco represents the partner of choice for African countries.
Perenco recently signed a 20-year contract for the Rio del Rey concession in Cameroon. What is the significance of this contract and how does it align with Perenco’s overall upstream agenda?
Firstly, Rio del Rey (RDR) is the regional hub, surrounded by Dissoni, Bolongo, Moabi, Moudi and soon Bomana. It is also feeding the majority of the production to the COTSA Terminal, the Massongo. We have built this virtuous system of maximising the synergies between various contracts to support the development of marginal fields which would not otherwise have been economic.
Secondly, RDR is generating its own growth. The fields constituting RDR have already produced over a billion barrels. We believed from the start in 2011 that they could deliver more than they were. We proved it, thanks to a special purpose rig called “the LUG”, developed by the Perenco Group specifically for RDR. It has already drilled 33 wells and production from these represent more than 30 percent of RDR’s current production. This is a big part of the solution, and we envisage it continuing to drill for years to come.
Perenco represents the largest operator in the country in terms of production. Are there plans to increase production at the Rio del Rey concession? Are there plans to drill more wells?
As I explained, we think we have the appropriate tool to perform fit for purpose infill drilling with the LUG rig. RDR barrels are not easy to find, but they are there. We just needed that versatile and powerful platform rig to produce them. It will at least maintain production at 40,000 barrels per day. It can be boosted if we have exploration success.
How does Perenco work with local communities and authorities to ensure that operations at Rio del Rey are socially responsible and environmentally sustainable?
From the beginning, Perenco has been engaged with the Republic of Cameroon to have a positive impact at local, regional and national levels. At the national level, through revenues generated by our activity, employment and training of young Cameroonians from all regions and all disciplines. Locally we are working with IECD, a Non-Governmental Organisation partner to develop micro entrepreneurial initiatives, teaching people to learn how to manage funds and reinvest effectively.
On a global standpoint, we are engaged in a global initiative to remove plastic waste from the countries where we operate – Plastic Free. We are developing a pyrolysis machine at a small scale and another at an industrial scale (to be installed in Cap Lopez in Gabon). It will clean the plastic from the country and use it to produce diesel in a virtuous circle, also reducing the need for diesel imports.
What are some of the unique challenges Perenco has encountered in the Rio del Rey basin and what has been done to address them?
The main challenge today is to address the gas flaring issue. The RDR reservoirs have a high gas/oil ratio and cumulated associated gas presents a risk that must be addressed. The issue is the number of locations and the low-pressure nature of the gas, but we have identified solutions to address the challenge. We are working with SNH to deliver the appropriate contractual, technical and economic solution, taking into consideration the country’s needs (gas-to-power, gas-to-industry and LPG) and the current value of gas on the international market. We expect an FID within a year with a fast track first phase right after.
Perenco has been bullish in Africa with the firm securing FID for the Gabon LNG facility as well as acquiring Glencore’s Chadian assets and New Age’s Etinde Asset in Cameroon. Looking ahead, what are Perenco’s plans for expanding exploration in Africa even further? Are there any new markets on the agenda?
Perenco has developed a specific know-how that it is now perfecting with the introduction of multiple innovations. This know-how fits well with African onshore and shallow water projects, where we have a historical presence and which we can build upon. We know we can deploy our teams easily in other parts of the world, as we did in T&T, Mexico, Brazil and Chad in recent years.
However, we would always prefer to consolidate our presence in an existing country versus opening up in a new one. Our added value for the country is our ability to create reserves while we produce them. This requires expertise and permanent creativity to fight the natural decline. In the last years, we have added an extensive knowledge of gas to our historical expertise in mature and marginal oil fields. We know that we can replicate in gas what we have learned in oil and bring these ground-breaking solutions to life for the African energy sector.
Why does Perenco represent the partner of choice for African countries looking at developing offshore assets? How does the firm incorporate new technology and innovation into exploration efforts?
Perenco has an entrepreneurial approach. When we initially look at a field, we may not have certainty at that stage how we will produce it. We study it, starting by analysing all of the available data from the time of exploration and the early development of the field; we share ideas, drawing on our 30 years’ experience; we redevelop in one, two, or three phases; and we connect, explore, or acquire adjacent blocks so as to achieve a virtuous circle where all the fields support each other.
We also have alternative development studies called the ‘oil & gas’ programme. As an example, in Gabon on the GANGA field, a field holding 40 million barrels and 1 trillion cubic feet of gas, we have a joint development of oil and gas. By doing so, we are creating value with both products.
The 2023 edition of the African Energy Week conference takes place in Cape Town in October. How does the event serve to advance Perenco’s exploration agenda in Africa and what deals do you hope to sign?
African Energy Week will be an important moment to share with our peers and multi-governmental authorities the specifics of the company and how it adds value in the countries where we operate. As an example, we entered Chad in July 2022. Eight months later we have already reached 18,000 bpd (from zero at the take over time) and now feed Moundou with a reliable and immediate gas-to-power solution which supports the development of the city.
What makes us different is that when we enter a country it is for the long term; we have a pure, entrepreneurial, approach, not a financial one; and we understand that the countries need to develop themselves and that we must be playing an active part in that development.
This article was first published on African Energy Chamber