Angola takes pre-salt plunge with licensing offer
Angola is to award 11 deep-water areas, all said to have potential for pre-salt oil, in the country's first large licensing offer since 2005
State-run producer Sonangol said in late-January that seven companies had been selected – through a restricted bidding process, instead of an open licensing round – to be the operators of the licences. Negotiations on production-sharing contracts and licence partners are continuing and are due to be finalised by mid-year.
The offer will bring three new operators to Angolan waters – ConocoPhillips, Repsol and Statoil. Other operatorships went to BP, Eni, Total and – the only smaller company favoured – US firm Cobalt. Sonangol will have a share in each licence and the firm's venture with Chinese infrastructure interests, China Sonangol International, will also participate.
The blocks awarded are in the Kwanza and Benguela basins, off the central coast, where shallower-water exploration has been disappointing. But Sonangol has high hopes for exploration below the country's salt layers, which it suggests could yield discoveries the size of those off Brazil – because Africa was once joined with South America, there are geological similarities between the two countries' offshore areas.
Sonangol estimates pre-salt wells in deep water will cost $100m each and the success rate is unlikely to be high because the salt layer – off Angola, it is 2,000-5,000 metres below the seabed – reflects seismic energy in many directions, making imaging difficult. Accordingly, the company decided against offering the blocks in an open licensing round, instead inviting bids from selected companies with the necessary capital and technological resources.
With the operatorships of Blocks 38 and 39 and three other licence interests – all in contiguous blocks – Statoil is making a substantial commitment. The Norwegian company claims already to be the country's fourth-largest producer, with 180,000 barrels a day (b/d) of equity oil from fields operated by ExxonMobil and Total, and says it has had an ambition to become an operator. Statoil has developed its own seismic-imaging technology for pre-salt prospects.
Repsol – a new entrant in Angola – will operate Block 22 and has two other interests. A spokesman said: "Our geologists believe that the Kwanza basin is geologically equivalent to the Santos basin in Brazil, where we have had a lot of success. We think that our geological modelling there will serve us well to understand Angola."
ConocoPhillips – another new entrant – is taking the two blocks to the north of Statoil's. Water-depths in the areas, Blocks 36 and 37, range between 2,200 and 2,600 metres. BP is taking Blocks 19 and 24, the former lying immediately south of its Block 18 where it has eight discoveries, five of them on stream through the Greater Plutonio development.
Cobalt's Block 20 lies adjacent to its existing operated Block 21, awarded with Block 9 in 2009, in an out-of-round agreement that gives Sonangol an interest in Cobalt's US areas. The firm says Block 20 – "the size of 200 Gulf of Mexico blocks" – holds 37 prospects, 18 of them pre-salt. It is preparing to spud the first of two wells in Block 21, which it claims will be the country's first deep-water wells specifically targeting pre-salt prospects. Private-equity controlled Cobalt was set up in 2005 and has one licence in Gabon as well as its US and Angolan holdings.
The blocks awarded are large, extending to 7,800 square km for Statoil's Block 39. As the first large offer of territory for six years, the areas should help to maintain the pace of exploration – although development work has slowed recently (PE 2/11 p9). The authorities had announced a new licensing round, offering some of the blocks now awarded, in 2007 but delayed it several times without clear reason.