* Angola could double reserves
* Brazil made huge finds in similar rock formations
* Drilling to rise in 2014, Congo plans auctions
* Pre-salt has tech risks, high costs
By Emma Farge and Shrikesh Laxmidas
DAKAR/LUANDA, Nov 29 Investors are stepping up
the hunt for hundreds of billions of dollars worth of oil
beneath a deep submerged salt crust offshore West Africa,
seeking to emulate Brazil's major discoveries across the
Geologists have long held that Africa's western seabed
mirrors South America's. The continents were fused into a single
plate nearly 200 million years ago.
Now, high oil prices consistently above $100 a barrel and
cheaper technology make it possible for producers to explore
thousands of feet below the surface.
The enthusiasm follows pre-salt finds by Total and
Cobalt in Gabon and Angola, shifting focus to a region
that has played second fiddle to east Africa's gas boom.
William Hayes, senior VP at explorer Kosmos Energy,
told Reuters the firm expected a "suite of smaller, but still
globally significant discoveries" in the region.
Jasper Peijs, BP's exploration director for sub-Saharan
Africa, said he expected super giant discoveries off Angola.
"All the prospects there have the potential to be giant,
which I would say is at least 250 million barrels and greater,
or super giant of 500 million to a billion barrels and even
greater than that," he said on the sidelines of an African oil
and gas conference in Cape Town.
So far, most of the excitement has centred on Angola where
prospecting is more advanced after a licensing round in 2011.
"The first year was one of acquiring seismic data, then
evaluation of results and 2014 will be a year of drilling for
most operators," Jean-Michel Lavergne, Total's General Director
in Angola, said, adding that the company will drill two of the
10-15 pre-salt wells set to be explored in 2014.
In an interview with Reuters earlier this month, Angola's
Oil Minister Jose Botelho de Vasconcelos said it could take
operators eight to 10 years after discovery to start production.
Some expect the pre-salt zone to extend further north to the
Republic of Congo and Equatorial Guinea or south to Namibia,
stretching along a more than 2,000 kilometre coastline.
In addition to Angola, at least half a dozen pre-salt wells
are either underway or have been announced in neighbouring Gabon
and Equatorial Guinea.
Brazil has made several pre-salt finds since 2007 in the
Santos Basin off its southeastern coast. It also has a host of
new wells, such as the massive Libra field.
The International Energy Agency expects Brazil to become the
sixth largest oil producer by 2035 and to meet a third of the
net growth in global supply.
It said however that the pace of supply growth will hinge on
the ability of its state oil company Petrobras to stick to its
investment plans, which project $237 billion over five years,
making it the world's largest corporate spending programme.
Wood Mackenzie's Martin Kelly, head of upstream research,
estimated that total reserves in West Africa were between 10-15
billion barrels, or about a quarter and a third of Brazil's.
"The early signs are very encouraging that there will be
commercial volumes of hydrocarbons," he said.
COSTLY AND RISKY
Angola, Africa's biggest producer after Nigeria, led the
way, awarding 11 pre-salt licences to seven majors in 2011,
including BP, ENI, Statoil and Total.
Amid the pre-salt buzz, the Republic of Congo also said
earlier this month it had launched a new licensing round
including offshore blocks.
This follows the completion of a well-attended licensing
round by Gabon in late October which it says could nearly double
its production to 500,000 barrels per day. Ophir
Energy, Exxon Mobil and Repsol were
among the winners.
"If all goes as well as expected, Angola can in a few years
double its reserves, which stand at just under 13 billion
barrels right now," said Jose de Oliveira, head of the Energy
Nucleus at Luanda's Catholic University.
Risks for investors include Africa's well-known political
instability. The technology is also formidably complex and
drilling a single well can cost between $120-$200 million.
Paul McDade, COO at Africa-focused Tullow Oil was proceeding
with pre-salt drilling in Gabon, but added that the scale and
the location of reserves was "quite uncertain".
"The story is still evolving," he said.
The International Energy Agency expects output from non-OPEC
African producers to trend lower in the long-term from 2.3
million bpd in 2012 to 2.1 million in 2035. Nigeria and Angola
are the only two sub-Saharah African members of the Organization
of the Petroleum Exporting Countries.
Angola's oil production is also set to decline to 1.4
million bpd over the same period from 1.9 million bpd in 2012 as
some of its wells drilled over the past 15 years are maturing.
Still even the modest pre-salt discoveries in mid-sized
producers could reverse declining output in a sector accounting
for more than 50 percent of GDP.
"A pre-salt jackpot could turn fortunes," said Rolake
Akinkugbe, head of oil and gas research at Ecobank.