Tullow and Anadarko to open new African oil frontier in Sierra Leone

Tullow Oil and Anadarko Petroleum are set to announce they have established a new oil frontier stretching 1,100 km along the African coast. The announcement is tied to discoveries at the Venus Prospect well Anadarko has been drilling off Sierra Leone. Venus lies at the western edge of a geological system that includes large discoveries off Ghana's shores.
Anadarko and Tullow have made a bet on that coastline, snapping up rights cheaply to explore the area. The find would also benefit Woodside and Repsol, which each hold 25 % of the Sierra Leone block.

"If Venus comes in, they are into a grand slam," Peter Hitchens, analyst at Panmure Gordon, was quoted as saying. Anadarko owns a 40 % share, while Tullow has 10 %. The Venus well does not prove that the area is full of oil, but it makes it more likely and will sharpen bigger companies' interests.
The discovery will also be news to the governments of Cote d'Ivoire, Liberia and Sierra Leone, none of which are major oil producers. They have watched Ghana leap from a cocoa exporter with no oil to a country expected to become one of the world's top 50 oil producers when the Jubilee field begins to pump next year. The Jubilee field is Africa's largest deep water field and is thought to hold as many as 2 bn barrels of oil, while the coastline could increase that.

Stewart Williams, analyst at Wood Mackenzie, the consultants, said the results of the Venus well were important.
"If Venus is confirmed as a discovery, it opens up a new play and makes the area valuable," Mr Williams said.

A window into the region is Kosmos -- the US company backed by the Blackstone Group and Warburg Pincus -- which initially discovered the Ghanaian deposits and is up for sale.
It could fetch about $ 4 bn, analysts said, as companies such as Chevron of the US, Anglo-Dutch Royal Dutch Shell, and Chinese and Indian companies look through the books. But in the past weeks the Ghanaian government has delayed the sale by making ever-increasing demands -- a fate thatoil executives say could also befall Ghana's neighbours as the true value of their offshore reserves becomes clear.

Note:
In August 2009 Tullow announced a farm-in agreement with Anadarko whereby it has acquired a 10 % interest in two exploration blocks -- SL-06/07 & SL/07 -- offshore Sierra Leone (see map). The Venus prospect is located in Block SL-6/07 and is being drilled by the Belford Dolphin. On completion of the Venus Prospect well, the Belford Dolphin will move to drill the South Grand Lahou Prospect in Block 105 (Anadarko 55.88 % working interest) offshore Cote d'Ivoire.
Anadarko has said that both prospects have seismic signatures and characteristics similar to the world-class Jubilee field offshore Ghana. Following these drilling activities, Anadarko plans to move the drillship to begin the company's multi-well, deepwater drilling programme offshore Mozambique.