Oil giants acquire West African blocks in search of the next Brazil

Chevron and TotalEnergies are among the oil majors acquiring offshore blocks in West and Southern Africa, driven by attractive geology, regulatory reforms, and the necessity to replenish resources in search of the next Brazil.

Companies are replenishing their oil and gas assets due to expectations that fossil fuel demand will remain elevated for an extended period, contrary to predictions made just a few years back.

“The majors are evidently engaged in a significant acreage reload and have successfully secured extensive acreage positions,” stated David Thomson, vice president of Sub-Saharan Upstream at Welligence energy analytics.

As U.S. shale production reaches its peak, other areas are gaining renewed interest, such as West and South Africa. For instance, Shell is making a comeback to offshore Angola after a two-decade hiatus.

Since 2020, approximately 11%, equating to around 8.7 billion barrels of oil equivalent (boe), of the oil and gas discovered has been located in West Africa, with the majority being oil, according to Justin Cochrane, African upstream regional research director for S&P Global Commodity Insights.

The area contains approximately 14% of the liquids found since that time, totaling about 5.6 billion barrels, he noted.

According to Thomson at Welligence, France’s TotalEnergies has emerged as the most active international player, having finalized new production-sharing contracts in Nigeria, Congo Brazzaville, and Liberia last September.

In late 2024, Angola, the second largest oil producer in sub-Saharan Africa, enacted a presidential decree that featured reforms and tax reductions designed to enhance the investability of mature blocks and encourage exploration.

About a year earlier, Angola also exited the OPEC group of oil-producing countries, liberating itself from output restrictions.

Shell emphasized the significance of new exploration, particularly in Angola, for maintaining production levels through the 2030s, as it revealed a deal last month to acquire stakes in two undeveloped offshore blocks.

Eni-BP joint venture Azule Energy has successfully drilled Angola’s inaugural gas-specific exploration well, discovering a potential reserve of over 1 trillion cubic feet of gas and up to 100 million barrels of condensate, as reported.U.S. major Chevron has entered the promising MSGBC (Mauritania, Senegal, Gambia, Bissau and Conakry) basin by adding two blocks off Guinea-Bissau in November.

“It contributes to an impressive array of exploration blocks we possess along the coast in West Africa, a highly productive region,” Liz Schwarze, Chevron’s vice president for exploration, informed Reuters.

Peter Elliott from NVentures data analytics stated that the blocks could contain multi-billion barrels.

Significant Findings

According to oil executives, the geological similarities between Africa’s underexplored west coast and the large productive basins across the Atlantic Ocean suggest the potential for significant new discoveries. “Africa and South America are true Atlantic twins, bound by a shared geological history,” stated Gil Holzman, chief executive of Canada’s Eco Atlantic Oil & Gas.

“He informed Reuters that several significant discoveries along the West African margin closely reflect the achievements seen in eastern South America, especially offshore Brazil.”

According to S&P Global Commodity Insights, Namibia has documented the highest amount of discovered and recoverable resources in the region, totaling 6.2 billion boe.

That amounts to approximately five times the total for the second-ranked Ivory Coast, surpassing South Africa, Angola, and Nigeria.

In the Orange Basin, recognized as one of the world’s most active exploration areas, the joint venture Azule Energy, alongside operator Rhino Resources, achieved three offshore hydrocarbon discoveries last year as they vie with TotalEnergies in the pursuit of first oil.

Rhino Resources, a privately held African explorer, intends to drill an appraisal well on a Namibian prospect this year and conduct a flow test on another as it aims to expedite development.

Total is progressing with its Venus project in Namibia and has secured a 40% interest in the Mopane mega discovery, which is estimated to contain at least 10 billion barrels.

Namibia has achieved a notable success rate exceeding 70% in its drilling campaigns; however, it continues to face complex geological conditions and technical challenges associated with deep-water operations.

Total has identified a significant gas-to-oil ratio at its Venus project.

Shell was compelled to take a $400 million writedown on an oil discovery off Namibia, yet it asserts its commitment to continued exploration.