Bottom Line: A new discovery by France’s Total SA (TOT) just inside territorial waters of Cote d’Ivoire will either exacerbate or speed up a resolution for a maritime boundary dispute between Ghana and Cote d’Ivoire.
Analysis: On 25 April, Total discovered oil in the Ivoire-1X exploration well, encountering 28 meters of net oil pay in 100 meters of Cretaceous reservoirs. The find is an extension of Total’s into the Tano Basin, in Ghana’s Jubilee fields. Effectively, now we know that Total’s Block CI-100 in Cote d’Ivoire has reserves that run into the Ghana fields. This was the first well drilling in Block CI-100. Total operates the block with 60% interest, in partnership with Yam’s Petroleum LLC (25%) and Petroci Holding (15%). The French giant has three other ultra-deep offshore licenses in Cote d’Ivoire.
Cote d’Ivoire claims ownership of the billions of barrels of oil and cubic feet of gas reserves found in the deep waters near the coast of Ghana. This is a long-running maritime border dispute, but it picked up momentum in 2010, when Ghana began commercial oil production.
Recommendation: Due to the increasing stakes in this game, and what will certainly be increased pressure from major investors, there is a high potential that Ghana and Cote d’Ivoire will be in a more compromising mood over their disputed maritime border and that we will see some form of progress towards a resolution before the end of this year. Particularly, Cote d’Ivoire may be more willing to compromise now that there is a find that is definitively on its territory and it is assured of benefitting from these offshore resources.