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Sierra Leone pins hopes on oil bonanza

By John Chiahemen, Pauline Bax
26 May 2010

Sierra Leone is confident that it, like Ghana, will strike oil offshore, and is already building technical capacity in anticipation, its energy minister Ogunlade Davidson told Emerging Markets

Sierra Leone is confident that it, like Ghana, will strike oil offshore, and is already building technical capacity in anticipation, its Energy Minister Ogunlade Davidson told Emerging Markets.

“The find in Ghana forces us to believe that there is hope,” Davidson said in an interview in Abidjan.

He said Sierra Leone, a mineral-rich nation that is the world’s biggest producer of rutile, is now trying to establish the commercial viability of an oil find. News is expected on that later this year.

The oil discovery was made in the Venus B-1 oil well, in Block SL 6/7 at the western end of the Liberian basin, which is being worked by a consortium headed by US-based Anadarko. The well has reached a total depth of 18,500 feet.

Davidson said that Sierra Leone is preparing to open up an oil frontier that could transform its economy. “Right now we are building technical capacity, that is training engineers, technicians, information specialists, geologists, accountants and lawyers,” he said.

“These people will form the basis of exploitation of these oil reserves. It is the wish of the government that if we do find oil in commercial quantities, the oil will meet the needs of the transportation sector, while electricity needs will be met from hydropower sources.”

The discovery of significant oil reserves in Ghana in the last three years has sparked a frenzy of exploration in West Africa, with impoverished neighbours like Sierra Leone and Liberia joining in the scramble in the hope of lifting their economies.

Industry analysts say the rebound in world oil prices and BP’s devastating oil spill in the Gulf of Mexico, which could slow exploration in the area, should add further impetus to the search for oil.

Ghana is set to join Nigeria and Equatorial Guinea in the league of major oil producers in the Gulf of Guinea when it starts commercial production later this year. The UK’s Tullow will pump 120,000 barrels a day from the Jubilee oilfield that has an estimated lifespan of 20 years.

Liberia, whose civil war in the 1990s was interlocked with that of Sierra Leone, is even further ahead in its drive to become an oil producer.

The National Oil Company of Liberia has handed out exploration licences to a handful of foreign companies including Repsol of Spain, Woodside of Australia, Oranto Petroleum of Nigeria and European Hydrocarbons, a consortium.

Ivory Coast pursued an aggressive exploration campaign in the 1990s when it started producing some 35,000 barrels per day from its deep sea fields that also yielded gas that powered its impressive electricity sector.

Oil output in the world’s number one cocoa producer is now officially put at 60,000 barrels per day although independent estimates place it much higher.

By John Chiahemen, Pauline Bax
26 May 2010