Malabo to Texas: Equatoguinean Connection

Equatorial Guinea might have disappeared from our geopolitical radar had Mobil not struck oil in the waters off Malabo in 1995. It quickly became clear that the Zafiro oil field was world-class. Oil production in Equatorial Guinea stands at more than 300,000 barrels a day, which at current prices translates to nearly $5.5 billion a year. A gas field owned by Marathon Oil has also become a major producer, and the ocean beds off Equatorial Guinea are being combed for additional deposits. Energy companies have invested several billion dollars in Equatorial Guinea, and Marathon has built a major liquefied natural gas facility. It is now possible to fly nonstop from Malabo to Texas on a weekly flight known as the “Houston Express.”

Equatorial Guinea is not the only country in the region to have emerged as a major oil supplier for the United States. West Africa is central to America’s effort to reduce dependency on Middle East oil. The region currently supplies 15 percent of America’s energy, and that figure is expected to rise to 25 percent within a few years
Equatorial Guinea's natural gas reserves are located offshore Bioko Island, primarily in the Alba and Zafiro oil and gas fields. Natural gas and condensate production in Equatorial Guinea expanded rapidly in the 5-year period following new investments by major stakeholders in the Alba natural gas field. Alba, the country's largest natural gas field, contains 1.3 trillion cubic feet (Tcf) of proven reserves, with probable reserves estimated at 4.4 Tcf or more.

Marathon Oil, other investors, and the state-owned gas company, SONOGAS, joined together in a $1.5 billion deal to construct a liquefied natural gas (LNG) facility on Bioko Island. The world-class facility shipped its first product in May 2007. In early 2008 Marathon and the government announced tentative plans to construct and operate LNG trains 2 and 3, pending confirmation of feedstock gas from national and neighboring gas fields.

The Okume Complex field is located offshore Equatorial Guinea, West Africa, and consists of the Elon, Okume, Oveng and Ebano reservoirs in water depths ranging from 27 to 500 meters. The development includes two separate mini-TLPs at the Okume/Ebano and Oveng reservoirs and three shallow water wellhead platforms at Elon. A single Central Processing Facility at Elon will handle crude from all four fields. Production from the field will be tied back to the existing Sendje Ceiba FPSO via a 12-inch oil export pipeline system.

Equatorial Guinea is now the third-largest producer of crude oil in Sub-Saharan Africa, after Nigeria and Angola. Equatorial Guinea's oil reserves are located mainly in the hydrocarbon-rich Gulf of Guinea. Large amounts of foreign investment primarily by U.S. companies have poured into the country's oil sector in recent years. Equatorial Guinea's total proven oil reserves are estimated at 1.1 billion barrels.

In October 2004, the government capped oil production at 350,000 barrels per day (bbl/d) to extend the life of the country's petroleum reserves, but lifted the cap the next year to allow expansion. With the addition of LNG production that came on line in 2007, total hydrocarbon production peaked in 2008. It is now in decline. Three fields--Zafiro, Ceiba, and Alba--currently account for the majority of the country's oil output.

In 2001, GEPetrol was established as Equatorial Guinea's national oil company. It was originally to be the primary state-run institution responsible for the country's downstream oil sector activities. However, since 2001 its primary focus has become managing the government's stakes in various Production Sharing Contracts (PSCs) with foreign oil companies. GEPetrol also partners with foreign firms to undertake exploration projects and has a say in the country's environmental policy implementation. In its recent block-licensing negotiations, Equatorial Guinea has pursued increases in the government's stake in new PSCs. In early 2008 it announced a $2.2 billion purchase of U.S.-based Devon Energy's stake in the country's oil fields, increasing its participation to 20% in the Zafiro field operation.

The Zafiro field is Equatorial Guinea's largest oil producer, with output rising from an initial level of 7,000 bbl/d in August 1996 to approximately 280,000 bbl/d by 2004. Ceiba, Equatorial Guinea's second major producing oil field, is located just offshore of Rio Muni and is estimated to contain 300 million barrels of oil. Production at Ceiba rose dramatically during the 2-3 year period following improvements and upgrades to the facility. Alba, Equatorial Guinea's third significant field was discovered in 1991. Original estimates of reserves at Alba were around 68 million barrels of oil equivalent (BOE), but recent exploration has increased estimates significantly to almost 1 billion BOE. Unlike the Zafiro or Ceiba fields, exploration and production at Alba has focused on natural gas, including condensates.

Ceiba's discovery has significantly increased interest in petroleum exploration of surrounding areas, with many new companies acquiring licenses in exploration blocks further offshore in the Rio Muni basin. International companies with interests in one or more exploration blocks include Chevron (U.S.), Vanco Energy (U.S.), Atlas Petroleum International (U.S.), Roc Oil (Australia), Petronas (Malaysia), Sasol Petroleum (South Africa), and Glencore (Switzerland). In October 2004, Noble Energy Equatorial Guinea, an Equatoguinean subsidiary of American Noble Energy, Inc. signed a contract to exploit a new oil field off the island of Bioko. Recently, Equatorial Guinea gave the Chinese National Offshore Oil Company (CNOOC) the rights to its newest oil field but Chinese exploration has to date been unsuccessful.

Deby fell out of favour with France over drilling rights

Rebels failed in their last attempt to seize the capital in 2006. Their leaders include high-level officials who have defected to the rebel ranks in recent years. They accuse Deby of favouring his family and Zaghawa clan group in power. Déby has faced at least two coup attempts. Hissène Habré conquered the capital in 1982 and the Libyan occupation of the Aouzou Strip in the north ended when Qaddafi's forces were defeated in 1987 with the support of France and the USA.


In 1989, Idriss Déby, one of Habré's leading generals and a member of the Zaghawa tribe, defected and fled to Darfur in Sudan, from which he mounted a series of attacks on Habré (of the Gorane tribe). Idriss Deby came to power in 1990 after toppling Chadian President Hissene Habre - with the help of the French secret service. In December 1990, Déby’s forces successfully marched on N’Djamena with Libyan assistance and seized power. During the next few years, and government forces clashed violently with rebel forces. Finally, Déby won the country’s first two multi-party presidential elections in 1996 and in 2001.

Mr. Déby planned his insurgency while living in Darfur, just as Mr. Habré before him seized power from a base in Darfur.

Landlocked Chad became an oil exporter in 2003 with the completion of a $3.7 billion (1.88 billion pound) pipeline linking its oilfields to terminals on the Atlantic coast.

The Doba pipeline, operated by Exxon Mobil with partners Chevron Corp and Malaysia's state run Petronas, pumps around 160,000 barrels a day through Cameroon to the Gulf of Guinea.

Last September, Chad's national oil refiner signed a joint venture deal with China National Petroleum Corporation (CNPC), parent of PetroChina and China's largest oil and gas producer.

PetroChina says it has found at least 100 million tonnes of oil at a new project in Chad.

China agreed to provide preferential loans to Chad and offer facilities for water and power supplies, the China Daily newspaper reported. here

Regionally Idriss Deby, a former French- trained helicopter pilot, has been increasingly viewed with mistrust, and he fell out of favour with Chad's former colonial master France over drilling rights in the 1990s. French Defence Minister Herve Morin said on Saturday France had a "neutral" military position in the conflict in Chad between the government and rebel troops, who have battled their way into the capital N'Djamena."We continue to remain neutral in this combat," Morin told France 3 television. "No ceasefire has been agreed," officials at France's Foreign Ministry and Defence Ministry said.


Many rebels have ties to past regimes in Chad. The leaders of the Chadian rebels include Timane Erdimi, a former member of Deby's ruling clan, and Mahamat Nouri, a former defence minister. They say Deby favors his family, the Zaghawa clan group and friends. "Nobody is going to miss Deby, but these guys aren't exactly fighting for freedom and democracy," Brody told the Times.

In 1999, the Exxon Consortium (consisting of ExxonMobil, Petronas and ChevronTexaco) had to relinquish most of the acreage surrounding the Doba-Doseo basins area in the Republic of Chad. Initially, the consortium had plans to explore this vast concession.

In the same year, Cliveden Petroleum Chad was granted the entire Permit “H” area surrendered by Exxon and set up an office in N'Djamena. This concession includes the Doba, Doseo, Salamat and Bongor basins as well as Lake Chad and is 268,240 km2. It also includes the Erdis area of a further 171,000 km2 on the border with Libya. As a result of acquiring this concession, Cliveden Petroleum Chad became the only title-owner of the so-called Lake Chad, Chari and Erdis permits comprising a total of 439,240 km2. For comparison purposes, this concession is almost equal in size to the State of Texas or the size of France.


At the end of 2003, the Cliveden Petroleum Chad sold a 50% shareholding to two major Chinese organizations. The Chinese National Petroleum Corporation (CNPC) and CITIC each bought 25% of Cliveden Petroleum Chad. CNPC is one of the world's leading integrated energy companies. Its operations cover a broad spectrum of upstream and downstream activities, field operations and technical services, and equipment manufacturing and supply.
CNPC serves as China's largest producer and supplier of crude oil and natural gas, holding a dominant position in domestic petroleum production, processing, and marketing sectors. At the same time, CNPC is also a major producer and supplier of refined oil products and petrochemicals.

As one of the largest service suppliers in the global petroleum and petrochemical industries, CNPC can provide operational services and technical support in such areas as geophysical prospecting, well drilling, logging, well testing, down hole operations, oilfield surface facilities construction, pipeline construction, refining and petrochemical projects, and manufacturing and supply of petroleum equipment.


CITIC is a window on China's opening to the outside world. Since its inception, CITIC has always adhered to the principle of innovation. In line with government laws, regulations and policies, CITIC has attracted and utilized foreign capital, introduced advanced technologies, and adopted advanced and scientific international practice in operation and management. In the light of the law of economy, CITIC has made explorations in many business fields with remarkable success and has achieved good economic results. By doing so, CITIC has made significant contributions to the country's reform and opening up drive and established good reputation both domestically and abroad.