The MSGBC Basin and the future of exploration

The MSGBC, or Senegal, Basin off the coasts of Senegal and Mauritania in western Africa is one of the most exciting areas of frontier exploration in the world. To date, there have been 168 newfield wildcats drilled in the basin that have discovered approximately 9 Bboe of recoverable resources, with over half of the volumes discovered in Senegalese waters. How might potential discoveries impact the region—and the broader exploration market? Jerry Kepes joins Upstream in Perspective to provide an overview of geological attributes and activity in the basin. Here's an excerpt of the conversation:

Jessica Nelson:

The MSGBC or Senegal Basin off the coast of Senegal and Mauritania in Western Africa is one of the more exciting areas of frontier exploration in the world. Rivaled perhaps only by activity

I realize there's a relationship for exploration along the Atlantic Margin. In fact Keith King from your team was on the podcast last year and educated us a little bit on the Atlantic Margin. Are there more potential geologic similarities to Guyana and Senegal that lead to the current fascination with these basins?

Jerry Kepes:

Absolutely. Thanks for asking that. Because this is really some of the most interesting developments that have led to, and are part of this whole Atlantic Margin play. Which extends as far north as Norway, and all the way down to the southern areas offshore, in the deep water, of Argentina on the west side of the Atlantic, and then South Africa on the east side. So it's a very exciting business.

And that concept is something we've called Conjugate Margin Pair Basins, because when you do plate reconstruction, parts of South America and North America fit right in to Africa and Europe before the plate split. Basically, you had very similar basins being developed on both sides of the Atlantic. The Guyana Basin offshore Guyana and Suriname where ExxonMobil and others have made such extraordinary discoveries, they are analogous pair bases with the MSGBC Basin on the other side, which is what we're talking about today.

It's a very important concept, which has led explorationists to think about what was found on one side of the Atlantic, and look for basically the same geology on the other side of the Atlantic in these paired bases.

This is significant because it gives ideas about how to reinterpret plate concepts, as has been the case. And really that's a concept that's been applied up and down the Atlantic Margin.

So, my answer is yes, that's a very good reason to see those two things together, and think about how what you see on one side shows up on the other.

Jessica Nelson:

And how about from a competitive standpoint? I know despite the enthusiasm surrounding Guyana's success, the play seems to be the exclusive domain of Exxon and its partner Hess. The MSGBC on the other hand has garnered interest from several large firms, including BP, Total, Exxon and Petronas. Is the potential opportunity big enough to be a viable business for four companies of that size?

Jerry Kepes:

Good question. Let me start with what happened the Guyana Basin. First of all, what we've seen so far is that it's the Guyana Basin portion offshore Guyana that's been successful so far. And there's multiple steps to the story, but by virtue of first entry, or early entry, ExxonMobil and partners ended up with a substantial part of the offshore acreage in the Guyana Basin offshore Guyana where that success has been.

Now in the eastern part of the Guyana Basin, offshore Suriname, there are a number of other players. We haven't had success yet, and it's obviously a more complex set of plays there. But there was always the potential that it's extended to the east there in the Guyana Basin and we would have more companies involved. And I would say also that in board of the ExxonMobil acreage, where all the success is, and by that, closer to shore, we now have a couple of other companies starting to drill wells. Repsol will be drilling there. There are a couple of others. So we may see that near monopoly that ExxonMobil has if you will, actually begin to break open a little bit.

Now coming over to the other side. As it happens, in the MSGBC Basin the company that really got the plays going there was really Kosmos on the one hand with respect to the big gas plays there that were discovered. And, on the other hand, Cairn, which has been involved with the oil discoveries that were made. So the starting point was already different.

Once that early success happened, we had BP coming in and doing a big alliance with Kosmos to develop the gas. We've had Woodside join Cairn Energy as a later farm-in. Total has come in.

At the end of the day, the MSGBC Basin is bigger than the Guyana Basin. It has more acreage potential. And by virtue of when it started to move, we've had a number of players come in, not early entry per se, but what's called fast forward. So the mix is already quite different. We already have a situation where we're unlikely to have that almost near monopoly on acreage that ExxonMobil has in the Guyana Basin.

It's all perfectly legally achieved. Monopoly doesn't mean illegal here, but we're already seeing a very different situation on the MSGBC Basin side.

How might a gas discovery impact the region and competition in the market? Listen to the full podcast for details.

Posted 30 May 2019

This excerpt has been professionally transcribed as accurately as possible. Please note, some words and phrases may have been unintentionally excluded.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.