Elf Aquitaine, the French national oil company, is determined to maintain its exploration activities in sub-Saharan Africa at a high level, in spite of a projected cutback in planned exploration outlays next year.
In 1986, the French group spent an estimated $5 billion for exploration, down from $6.2 billion the previous year. Just under a third of this amount - $1.5 billion - was alloted to Elf's African operations.Elf sources here said in the preliminary 1987 budget, exploration spending was pegged between $3.5 million and $4 billion. The exact share to be parceled out for Elf's African ventures has yet to be determined, company sources noted.
According to Serge Naville, Elf director for Africa, the company has reassessed its African holdings in great detail "in order to conserve the essential and be ready to start up again as soon as possible."
The French company has generally benefited in 1986 from more favorable fiscal conditions in the Gulf of Guinea, a region stretching from Nigeria down to Angola.
Francois Didier, director for strategy and planning, stressed that Elf would give priority in 1987 to the African countries that offer the best conditions in a difficult world situation.
In fact, sub-Saharan Africa is essential for Elf's performance as some 85 percent of its oil comes from the region.
Nigeria will certainly be high on Elf's priority list. Elf already produces in this country around 100,000 barrels a day, and hopes to boost its capacity by the early 1990s.
Elf was granted earlier in the year four new permits located offshore Cross Rivers State, or more exactly between Port Harcourt to the east and Calabar to the west.
The French group will soon start an ambitious seismic campaign on blocks 93, 95, 96 and 97, industry sources here said.
In neighboring Cameroon, Elf's production is around 120,000 b/d. Exploration is continuing, but at a slow pace.
Further down the coast in Gabon, Elf accounts for around 75 percent of the country's 160,000 b/d. The company has received excellent news from the Ogooue-Sette-Cama permit in which it has a 50 percent share.
The operator, Shell-Gabon, an affiliate of the Royal/Dutch Shell group, has chalked up important finds over the past two years. Industry sources indicated that reserves in place may be as high as 500 million barrels.
This would assure Elf reserve base in Gabon and mean that production could be kept up at present levels into the 1990s when Elf's smaller offshore fields start declining.
Elf is on a holding action in Congo, where it also produces around 100,000 b/d. Prospects are good on the continental plateau, but the French group obviously is waiting for the price of oil to rise before commiting major new
funds for exploration.
Elf is much less reticent concerning Angola, where it offshore block 3 has proven to be a money-spinner. With just two fields on stream, output has reached some 60,000 b/d. The development of a smaller third field is under way.
Elf is also a partner in block 1, operated by Italy's Agip. It is seeking to acquire another promising permit, block 8, but competition with several U.S. companies has been intense.
The downturn in the price of oil has little affected the economic situation of Elf. In fact, the French group chalked up profits of 3.4 billion French francs during the first six months of the year, in comparison with 2.9 billion francs over the same period in 1985 (a dollar was worth 6.557 francs at Thursday's close).
This was accomplished on revenues of 69 billion francs, against 93.2 billion francs in the first half of last year.
Industry sources here remarked that Elf's earnings outlook for 1986 continues to look very good, even if second-half results are expected to be slightly under the first half's.