LB-13
General
There has long been interest in the Liberian Basin with 7 wells drilled in the 1970’s and 1980s; six had oil shows. Specifically Chevron operated an exploration well, II B-1, in 1970 on LB-13 which was drilled into the Lower Cretaceous (Aptian), to a depth 2930m and resulted in multiple oil shows which were visible in the Aptian and Albian formations. Union Carbide operated a similar well, A2-1, in 1971 with similar positive results on LB-14. On the LB-12, the neighbouring block to the east, Amoco operated the H3-1 well in 1985, finishing in the Lower Cretaceous and with oil shows in the Albian.
This interest, held back during the civil strife, was reignited in 2007 with very large discovers off Ghana in a similar deep water transform margin play type to those that can be seen in the Liberian Basin. In September 2009, the prospectivity was confirmed by Anadarko’s success at Venus in block SL-6. Though still not commercial it de-risks numerous leads in the region.
Gary Allsopp meeting Her Excellency President Ellen Johnson Sirleaf.
The Production Sharing Contract
The Production Sharing Contract (“PSC”) for LB-13 became effective in May 2007. This is the “licence” that allows the company to explore and ultimately produce from LB13. Presently Peppercoast Petroleum is the sole contracting party to the PSC, with 100% of the contractor’s rights and obligations under the terms of the PSC.
The PSC splits the 8 year exploration time frame into 3 periods, the first exploration period, the second exploration period and the third exploration period, lasting 4, 2 and 2 years respectively. The first exploration period requires a 3D seismic survey of 1500 km2 and the remaining periods require one exploration well to be drilled.
The PSC also obligates the contractor to make annual non-work payments, which include: annual surface rental payable to the National Oil Company of Liberia (NOCAL); the University of Liberia; Training Social and Welfare programmes. Bonuses are payable to NOCAL on certain production milestones.
The Contractor is potentially rewarded for his investment from the production of oil. Costs are recovered from Production Oil and the remaining oil production is split between NOCAL and the Contractor as such:
| Production Rate bpd |
Nocal’s Share |
Contractor’s Share |
| From 0 to 50,000 |
45% |
55% |
| From 50,000 to 75,000 |
50% |
50% |
| From 75,000 to 100,000 |
55% |
45% |
| Over 100,000 |
60% |
40% |
Gas is split 35% to NOCAL and 65% to the Contractor.
The full contract can be downloaded from https://www.leiti.org.lr/doc/an_act_nocal_broadway.pdf
Summary of Work to Date
The company has carried numerous studies relating to LB-13. From these Peppercoast Petroleum was sufficiently encouraged to enter into a supplementary contract with TGS-NOPEC for them to acquire and process 2000 km2 of 3D seismic. The area shot is the area in red in below:
The green area is likely to be relinquished as per the PSC at the end of the first exploration period
The 3D was shot in deeper water than the 1971 well, with the exception of the well tie-in. This is to reflect the nature of regional discoveries in the last five years.
In July 2010 Peppercoast Petroleum entered into a further contract with TGS-NOPEC for the interpretation of the 3D data required earlier in the year.
Early results of this work have identified twelve prospects, in water depths ranging from 600m to 3100m, spanning Palaeocene to Albian ages with a multitude of play types. Volumetric work suggests several prospects have sufficient potential size to be described as giant oil fields if developed.
Seeking a Co-venturer
Peppercoast Petroleum has completed the 3D interpretation and has opened a data room in London seeking a co-venturer.
Map of the Liberian Wells:
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