Oil and gas exploration and production in the Gulf of Guinea: can the new gulf be green?

• Author: Moreno, Carlos J.

1. INTRODUCTION II. OFFSHORE E & P AND ITS ENVIRONMENTAL IMPACTS III. OIL AND GAS IN THE GULF OF GUINEA IV. EXISTING LEGAL FRAMEWORK FOR ENVIRONMENTAL PROTECTION DURING OFFSHORE OIL AND GAS ACTIVITIES AND THEIR APPLICABILITY TO THE GULF OF GUINEA A. Global Instruments 1. 1972 London Dumping Convention 2. 1973/1978 MARPOL Convention 3. 1982 Convention on the Law of the Sea B. National Laws C. The Regional Approach V. POSSIBLE CONTENTS OF A NEW REGIONAL PROTOCOL FOR OFFSHORE PETROLEUM ACTIVITIES A. Choosing the Right Blueprint B. Specific Recommendations 1. Licensing and Environmental Impact Assessments 2. Seismic Surveys 3. Siting of Installations 4. Safe and Fit for Purpose 5. Contingency Planning 6. Drilling Discharges 7. Produced Water and Other Aqueous Discharges 8. Garbage and Sewage 9. Chemical Use 10. Flaring 11. Decommissioning 12. Discharge Data Reporting VI. OBSTACLES TO DEVELOPMENT AND IMPLEMENTATION OF AN OFFSHORE PROTOCOL VII. CONCLUSION Much of the industrial world will find itself caught up in the competition of two great themes--energy and security, and energy and the environment. A far-reaching clash between anxieties about energy security and economic well-being on the one side, and fears about the environment on the other, seems all but inevitable. (1)

1. INTRODUCTION

   Energy continues to be a key factor in the economic well-being of developed and developing countries. Developed countries have vast energy requirements that need to be fulfilled, while developing countries will continue to grow their energy demands as time goes by. (2) Oil continues to fulfill a large majority of these worldwide energy needs. (4) Estimates indicate that the world oil consumption in 2006 was 85,220 thousand barrels per day, an increase of 1.1% from 2006. (4) This growing demand, coupled with OPEC's production cuts, almost ensures that exploration for oil will continue to be strong. (5) A lot of this oil exploration is expected to be offshore in water over 1,000 feet in depth. (6) Some consultants have suggested that undiscovered deepwater reservoirs around the world may contain as much as 181 billion barrels. (7)

   The continued demand for oil means that the discovery of offshore oil in a developing country usually brings an economic bonanza for that country. (8) Still, past experience shows that in many cases this oil boom has translated into an improved life for only a select few and can actually leave the impoverished majority in worse shape than before. (9)

   In addition to the economic and governmental challenges that an oil boom brings to a developing country, there are also environmental risks that must be addressed. (10) Regions made up of developing countries often do not have the resources and governmental structures required to create and manage a legal framework for the prevention of environmental harm from offshore oil and gas exploration and production (E & P) activities. (11)

   This particular scenario is currently unfolding in the Gulf of Guinea. (12) The countries of the Gulf of Guinea, an area in the West and Central Africa coast made up of Nigeria, Chad, Cameroon, Equatorial Guinea, Angola, Sao Tome and Principe, Gabon, and Congo, are considered developing countries. (13) All of these countries are either currently producing offshore oil or are exploring for oil offshore. (14) However, the region currently lacks a comprehensive environmental protection plan to address offshore oil and gas exploration and production. (15) The aim of this paper is to suggest a regional framework for environmental protection during offshore E & P activities in the Gulf of Guinea. Part II of this paper discusses the benefits and challenges associated with offshore exploration and production, including the environmental risks. Part III discusses the Gulf of Guinea and its oil potential. Part IV discusses the existing international, regional, and national legal frameworks for environmental protection during offshore E & P activities. Part V suggests contents of a new regional protocol to address environmental issues related to offshore oil and gas E & P. Part VI discusses the obstacles to developing and implementing a new regional protocol. These suggestions can apply not only to the Gulf of Guinea, but to other regions of Africa or the globe that may see offshore oil exploration activity in the future. (16)

2. OFFSHORE E & P AND ITS ENVIRONMENTAL IMPACTS

   Offshore E & P offers significant benefits over onshore oil production. For example, it minimizes the possibility of disruptions caused by violence and war. (17) It also provides the possibility of shipping oil directly to the major consumers (e.g., the U.S.) without having to bring the oil onshore to potentially volatile areas. (18) Currently, offshore production accounts for up to 30% of the world's oil and gas production. (19) That percentage is expected to rise in the future. (20)

   However, offshore E & P activities are not without disadvantages. Offshore development, especially deepwater development, requires a significant technological investment. (21) In addition, offshore oil development brings some inherent environmental challenges. (22) It can be a significant threat to the marine environment and ecosystem. (23) Similar to onshore development, it creates atmospheric emissions. (24) Finally, after the oil has dried up, there is the significant challenge of what to do with abandoned platforms, i.e., decommissioning. (25)

   In areas with significant resources such as the Gulf of Mexico or the North Sea, extensive regulatory frameworks have been required to mitigate these potential damages. (26) However, offshore development in developing countries may result in unmitigated environmental risks. For example, the countries of the "new Gulf" (27) have major challenges in regards to government, peace, wealth distribution, economy, health, and security, (28) such that environmental protection associated with offshore development may be only an afterthought. However, if nothing is done proactively, it may later be too late to reverse the environmental harm. (29) Thus, there exists a gap in regards to environmental protection related to offshore oil and gas E & P in the Gulf of Guinea.

   Generally speaking, offshore oil and gas activity can be subdivided into four stages. (30) Each stage offers a different mix of acute and chronic environmental risks. (31) The four stages include: (1) geological and geophysical survey; (32) (2) exploration; (33) (3) development and production; (34) and (4) decommissioning. (35)

   In addition to harmful effects from operational discharges, throughout the four stages there are also risks associated with accidental spills or accidents from support vessels, tankers, platform equipment, and pipelines. (36) Terrorist attacks on oil infrastructure present another potential risk of accidental release. (37) Some of these risks are already addressed through international, regional, and binational agreements. (38)

   A final environmental impact has to do with atmospheric emissions. From that standpoint, the main impact is emissions of greenhouse gases from flaring and venting. (39)

3. OIL AND GAS IN THE GULF OF GUINEA

   The Gulf of Guinea is located on the west central coast of Africa and encompasses the countries of Nigeria, Chad, Cameroon, Equatorial Guinea, Angola, Sao Tome and Principe, Gabon, and Congo. (40) From a marine ecology perspective, the region is also known as the Guinea Current Large Marine Ecosystem and encompasses all the coastal countries from Guinea Bissau in the North to Angola in the South. (41) About 40% of the people in the region live in coastal areas. (42)

   The Gulf of Guinea has estimated reserves of 24 billion barrels of oil. (43) Estimates indicate that the Gulf of Guinea countries already account for 4.2% of world oil reserves and 6.5% of oil production in 2007. (44) However, this number is expected to grow, given that exploration is only now commencing in some offshore areas. (45) For years, Nigeria has been a major exporter of oil, with Angola now joining the ranks of the major producers. (46) In regards to the U.S., West and Central African countries provide 12-15% of its oil supply. (47) That number is expected to grow to almost 25% by 2020. (48) China has also shown increasing interest in the region and now counts Angola as its top oil supplier. (49)

   A significant amount of the region's growth in oil production will be from offshore lease blocks. (50) Some countries like Nigeria and Angola are already producing from offshore areas in the Gulf of Guinea, while others are starting to conduct exploration activities. (51) By some estimates, West Africa already has up to 547 major offshore oil and gas structures. (52)

   Oil from this region offers the added benefit that it is mostly light, sweet crude, which is cheaper and easier to refine. (53) In addition, contrary to some of the world's proven reserves, the countries of the Gulf of Guinea have so far welcomed foreign investment. (54) This is important for large multinationals trying to increase production. (55) It is also important for rapidly developing countries with large capital investment potential, such as China. (56) Still, probably the most important advantage offered by oil from the region is the fact that most of it is offshore. (57) This greatly reduces the probability of disruptions caused by political, social, or military conflicts. (58)

   The Gulf of Guinea also has vast untapped natural gas reservoirs. (59) Nigeria has the world's seventh largest proven natural gas reserves. (60) Without including the gas being flared or reinjected, Africa holds about 8% of the world's proven reserves, but only accounts for about 5% of the world's production. (61)

   In addition to oil and gas, the Gulf of Guinea has other valuable natural resources to offer. The area is very rich in commercially valuable fish. (62) It is also an important region for marine biodiversity. (63)...