Angola: China cements its position
THE MAJOR oil companies might be less willing to pour investments into Angola, now it has an Opec production quota – but Chinese firms are not daunted. China National Offshore Oil Corporation (CNOOC) and Sinopec have agreed to pay $1.3bn to join the Total-operated ultra-deep-water Block 32, although there is no production and their share of the cost of the likely first development could be nearly as much again. However, last summer, when the interest was offered, there was speculation that it could be worth as much as $2bn, so $1.3bn might be seen as good value.
The 50:50 venture between state-owned CNOOC and Sinopec agreed to buy a 20% share in the Block 32 licence from Marathon Oil, which is to retain 10%, other interests being Total, 30%, the state's Sonangol, 20%, ExxonMobil, 15%, and Galp Energía, 5%. Drilling in the block from 2003-07 produced 12 discoveries, with only two dry wells. Total says pre-development studies are being carried out for a multi-field development in the eastern part of the area.
The acquisition is CNOOC's first move into Angola, but Sinopec has built up substantial assets over the past few years. A venture between Sonangol and Sinopec, SSI, was favoured by the government with a 50% interest in the BP-operated Block 18 in 2005, where oil now flows from the Greater Plutonio development.
SSI also won interests in three exploration areas in the 2006 licensing round: 20% of the Eni-operated Block 15/06; 27.5% of the Total-operated Block 17/06; and 40% of the Petrobras-operated Block 18/06. Another Chinese-Angolan joint venture, China Sonangol International, has a 25% interest in the Sonangol-operated shallow-water Block 3/05.