The government in Ivory Coast said it was ready to resolve maritime border disputes with Ghana, a move that could open the door to a West African offshore oil and gas bonanza.
"Ivory Coast has set up a commission to work on the subject," Ivorian government spokesman Bruno Kone said. "[By] June 2014, our two countries, Ghana and Ivory Coast, will be able to find a definitive solution to this dispute."
Ivory Coast experienced two civil wars since 2002. With national reconciliation within reach, however, the world's No. 1 cocoa producer saw its economy grow by nearly 10 percent last year. Now, the country wants to resolve border issues with its western neighbor in a move that could stimulate its economy further by drawing investors to its emerging oil and gas potential.
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Lukoil, Russia's largest privately held oil company, announced in June it acquired a 65 percent stake in a license area in the Gulf of Guinea, off the Ivorian coast, from Nigerian company Taleveras Energy. Lukoil said it planned to conduct seismic surveys of the area by January in order to get a better understanding of the resource potential there. Keen investors may follow suit.
Ivory Coast may be considered frontier territory, with very few exploration wells drilled there because of war. As of January 2013, Ivory Coast had 250 million barrels of oil in reserves. Ghana, meanwhile, has already generated significant interest offshore with its giant Jubilee field, which was producing 110,000 barrels of oil per day for Tullow Oil as of June.
French energy company Total in April said it encountered oil while drilling in a reserve area offshore Ivory Coast. It was the first well drilled in block CI-100 and the company said the play extends into the so-called Tano basin, which includes the Jubilee field in Ghana. Total said it planned to spend as much as $300 million to drill offshore Ivory Coast in the western section of CI-100. The area, however, lies next to disputed territory with Ghana. In May, Tullow Oil announced the government in Ghana approved the development plan for the so-called TEN Project, also located in the Tano contract area. That project calls for up to 24 development wells connected to a floating, production, storage and offloading vessel.
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West African neighbors and former French and British colonies, respectively, Ivory Coast and Ghana have never demarcated their shared maritime border. Kone, the Ivorian spokesman, said a peaceful solution was the best solution.
Former Ivorian President Laurent Gbagbo, now facing war crimes charges at the International Criminal Court, in 2007 ordered an investigation the country's cocoa industry. Trials started in 2010 and, in November, 15 former managers from the industry were sentenced to 20 years in prison on corruption charges. With cocoa accounting for nearly 40 percent of the Ivorian export economy, the border resolution may help both sides realize their full energy potential.
By. Daniel J. Graeber of Oilprice.com