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Angola announces Namibe Basin awards

Partial success of 2019 licensing round sees Sonangol, Total, Equinor and BP take interests in blocks, leaving several other blocks open to offers

The National Agency of Petroleum, Gas and Biofuels of Angola (ANPG) has awarded three deepwater concessions to bidders in its 2019 Namibe Basin licensing rounds. 

ANPG, which appointed information provider IHS Markit to facilitate the round, awarded 25pc of block 27 to national oil company Sonangol, leaving the remaining share available. Block 28 will be shared between Italy’s Eni (60pc) and Sonangol (20pc), leaving an outstanding 20pc stake available. Block 29 has been awarded to Total as operator with a 46.5pc stake, Norway’s Equinor 24.5pc, Sonangol 20pc and BP with 9.5pc. 

All three blocks are considered frontier and nothing is currently being produced within them. The contracts for the awarded blocks are due to be negotiated between now and 27 March 2020 with signatures to production sharing agreements to take place no later than 30 April 2020.

Seven other blocks were offered in the late 2019 round, including six others in the Namibe Basin and one in the Benguela Basin. ANPG is open to negotiating directly with E&P companies outside of a formal licensing round procedure. 

Eni has enjoyed recent success in Angola. In June 2019, Eni said it had made a fifth discovery in Angola's Block 15/06 since the company's joint venture with Sonangol relaunched a year earlier. 

The west African country is the second-largest producer of oil on the continent, behind Nigeria, but its output has started to dwindle since peaking in 2013, although it briefly held the number one producer spot in 2016. The mid-decade global oil price crash hit investment in its oil-rich but high-cost continental shelf, which fed through into lower production towards the end of the decade. 

Opec, which Angola joined in 2007, estimates that the Portuguese-speaking nation’s crude oil production is just under 1.5mn bl/d. The cost of production averages $40/bl, according to the US export.gov agency. 

The licensing round was the first under the presidency of Joao Lourenco and a first in almost a decade. The announcement of the awards is pursuant to the provisions of Number 4 Presidential Decree 86/18 of 2 April 2019, in compliance with the predefined 2019 ANPG bid round calendar.

Source: Petroleum Economist
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