Canada-headquartered oil and gas player Zenith Energy is working on wrapping up requirements to get its hands on a production sharing contract (PSC) for a block containing an oilfield offshore Benin in West Africa.
Zenith Energy was awarded a three-month exclusivity period in January 2023 to negotiate and finalise terms of a production sharing contract for Block 1, which encompasses the Sèmè oilfield offshore Benin in West Africa. The exclusivity for a period of three months, which was granted by the Ministry of Water and Mines of the Republic of Benin came after the Canadian firm submitted an offer to Benin’s government on 15 September 2022 for the award of an initial nine-year licence to operate this block.
In an update on Monday, 17 April 2023, Zenith confirmed that it was performing the necessary legal and technical work in coordination with the Ministry of Water and Mines of the Republic of Benin for the finalisation of the PSC for Block 1.
Block-1, which was discovered in 1967 by Union Oil, is located in shallow water with onshore facilities and a tank farm for processing oil production. It covers 551 km2 with over 355 km2 of recent 3D seismic data. The block’s production facilities entail three platforms and two of these are located in the Sèmè field while the last one was installed during 2013-2016 to develop the Sèmè North, which was discovered in 2015 with a reported discovery of an additional 100 million barrels of oil in place with estimated (2P) recoverable reserves of 16 million barrels utilizing a recovery factor of 16 per cent.
For Zenith, Sèmè is a proven oilfield, with significant unexploited potential, having independently assessed recoverable reserves (P2) of 22-28 million barrels of oil and 428 billion cubic feet of natural gas (Kerr McGee 2005). The block has produced a reported 22 million barrels of oil, with the last production taking place in 1998 at a rate of approximately 2,000 barrels of oil per day when oil prices were below roughly $10 per barrel.
While 27 wells have been drilled in Block-1 and 24 in the original Sèmè oilfield, the last three wells were drilled in 2014-15 to discover Sèmè North. These wells discovered and tested oil in the H5 & H6 reservoirs, the same reservoirs that were producing in the original Sèmè oilfield, in a separate structure. However, due to the prevailing oil price at the time – approximately $30 – further development activities were deemed non-commercial.