Monetizing Gulf of Guinea Resources
Case for Action
Multiple gas fields have been discovered in the shallow waters of the Gulf of Guinea over the past several decades; however, few, if any, have been developed thus far. The client has interests in two such fields, both determined to hold economic volumes of sweet, dry gas, with an expectation of high well productivity. The client wishes to develop these two fields at the present time but has partners with different priorities for their respective development portfolios, and different concepts for development of these two gas fields in particular. Each of the client’s partners have a participating interest in specific gas sales solutions (in this case LNG plants), and the client does not. Thus, the client and partners have different drivers in terms of development concept selection, gas sales price requirements, and urgency to proceed with development.
The client requested Endeavor Management to support client’s efforts in developing realistic and competitive field development concepts to be taken forward in alignment with the partners into a subsequent, formal Concept Selection exercise. The client requested that existing studies and previous experience be used to the maximum practical extent to conserve cash for the Concept Selection exercise.
Endeavor Management Solution
Endeavor Management addressed the client’s request to provide alternative field concepts while keeping the professional services costs as low as practical as follows.
- Identified 7 high level alternatives for consideration, including offshore or onshore gas processing, alternative LNG plant concepts including FLNG, with alternative sales points to FLNG such as chemical or power plants. Deliberately searched widely to ensure highest quality results once alternatives were narrowed. Acknowledged the wide range of uncertainty in early concepts and managed details accordingly.
- Developed benchmarks for the partner-provided development concepts, for comparison with the above alternatives. Utilized a broad basis of benchmark data to preclude additional studies which would require additional funding.
- Conducted due diligence reviews of technical aspects and management maturity of FLNG systems by teleconference, well before COVID-19 made this the norm, rather than the customary method of multiple on-site meetings.
- Performed market surveys of key development system components, to ensure the latest and most accurate costs were available for comparisons.
- Condensed the initial alternatives to a practical short list through assessment of performance of each in technical, economic, commercial, organizational and political aspects.
Value/Results
Endeavor Management provided the client with feasible, competitive field development concepts, suitable for inclusion in the subsequent Concept Selection exercise. The quality of the concepts placed the client, for the first time in decades, to be in position to reach a Final Investment Decision with its partners on development of the two gas fields in a timely fashion.
