Sopuruchi Onwuka, with agency reports

Government of Benin Republic has called Zenith Energy come for negotiation on the terms of a production sharing contract (PSC) on the prospective Seme oilfield, just close to the same location Nigerian government is preparing to award exploration licenses.

With the activities steaming in both countries, the neighboring nations are seen in a race to be the first to drop the straw into the probably straddling hydrocarbon reserves in the Dahomey Basin.

The Oracle Today reports that Ministry of Water and Mines of the Republic of Benin awarded Zenith Energy an exclusivity period of three months to negotiate PSC for Block 1 containing the Sèmè oilfield, offshore Benin.

The company had earlier announced the submission of an offer for Block-1 on September 22, 2022.

Chief Executive of Zenith, Andrea Cattaneo, commented: “We are extremely pleased to have been granted the Exclusivity to negotiate and finalize the terms of a PSC for Block-1 by the authorities in Benin.

“Block-1 represents a potentially transformational development opportunity for Zenith because of its sizeable unexploited potential, indicated by its independently assessed oil and gas reserves and past production, and existing field infrastructure.

“We view Benin as an attractive jurisdiction for foreign investment and we look forward with great enthusiasm to working closely with the local authorities towards successfully formalizing the PSC.”

Discovered in 1967 by Union Oil, Block-1 is ocated in shallow water (30m) offshore with onshore facilities and tank farm for processing of oil production. The field covers 551 sq. km with over 355 sq. km of recent 3D seismic data taken between 2001 and 2014.

Seme is a proven oilfield, with significant unexploited potential, having independently assessed recoverable reserves (2P) of 22-28 million barrels of oil and 428 billion cubic feet of natural gas (Kerr McGee 2005) for the original Sèmè oilfield.

It has produced a reported 22 million barrels of oil to date, with last commercial production having taken place in 1998 when oil prices were below approximately US$10 per barrel.

The Seme field has historical recovery factor of 22%, leaving significant margin for improvement of the recovery factor utilizing modern completion techniques, horizontal drilling, and improved 3D seismic.

The field last produced at a rate of approximately 2,000 barrels of oil per day in 1998. And it has average historical well production rates ranging between 1,500 and 3,000 barrels of oil per day.

The last operator is reported to have made infrastructure investments for an amount exceeding $100 million prior to exiting the project due to low oil prices.

According to Zenith, a new ‘Sèmè North’ oilfield 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%.

It is expected that improvements in the Recovery Factor might be achieved with modern completion and drilling techniques to reach a Recovery Factor of above 30%. 

Some 27 wells have been drilled in Block-1: 24 in the original Sèmè oilfield, with the last 3 wells having been 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 further development activities were deemed non-commercial.

Zenith Energy sees significant development and exploration potential in the emerging Syn-Rift play extending from neighboring Nigeria.

Production facilities comprised of three platforms: two located in the Sèmè Field, with the last being installed during 2013-2016 to develop the newly discovered Sèmè North.

“Zenith Energy has already conducted preliminary site visits to inspect the infrastructure,” the company stated.