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"New rush for Angolan oil"
According to Oil and Gas Journal (OGJ), Angola had proven oil reserves of 8.0 billion barrels as of January 2007. The majority of the reserves are located in Angola’s offshore blocks. Blocks 15 and Zero have been the most prolific offshore blocks. Proven reserves are also located onshore near the city of Soyo.
Angola’s crude oil production has more than quadrupled over the past two decades. In 1986, crude oil production averaged 280,000 barrels per day (bbl/d), while production in 2006 averaged 1.4 million bbl/d. According to EIA estimates, Angolan oil production is set to reach two million bbl/d by 2008, when new deep-water production sites are expected to come online. Also consistent with EIA estimates, in December 2006, the World Bank announced that Angola will likely see peak oil production in 2011 at 2.6 million bbl/d followed by production declines if there are no new oil discoveries.
Angola exports crude oil primarily to China (477,000 bbl/d as of November 2006) and the United States. In 2005, the United States imported approximately 473,000 bbl/d of oil from Angola, which made Angola the eighth largest supplier of crude oil to the United States. As of October 2006, the United States had imported an average of 526,000 bbl/d of oil from Angola. Angola also exports crude oil to Europe and Latin America.
In 1976, the Angolan government created a national oil company called the Sociedade Nacional de Combustiveis de Angola (Sonangol). In 1978, Sonangol became the sole concessionaire for oil exploration and production in Angola. Sonangol works with foreign companies through joint ventures and production sharing agreements (PSAs), while funding its share of production through oil-backed borrowing. Major international oil companies operating in Angola include BP, Chevron, Devon Energy, ExxonMobil, Maersk, Occidental Petroleum Corporation , Roc Oil and Total.
- Oil production: 1.6 million bbl/day (2005 est.)
- Oil proved reserves: 25 billion bbl (2006 est.)
- Natural gas production: 750 million cu m (2004 est.)
- Natural gas proved reserves: 45.87 billion cu m (1 January 2005 est.)
- Cabinda Gulf Oil Company (CABGOC), a Chevron subsidiary and has been the operator of Block Zero since 1955. In May 2004, Sonangol and the Angolan government extended CABGOC’s contract, which was set to expire in 2010, to 2030. Other partners on Block Zero include Sonangol, Total and Eni. Block Zero is located offshore Cabinda province and accounts for approximately 370,000 bbl/d of Angola’s oil production, or almost one-third of Angola’s total crude oil production. In addition to Block Zero, CABGOC is the operator of deepwater Block 14. A total of nine discoveries have been made on the block with Kuito being the first in 1997. Two years later, Kuito became Angola’s first producing deepwater field. Chevron's combined average net production in Angola and Nigeria was 264,000 barrels of oil equivalent per day in 2005.
- ExxonMobil's Kizomba B project in deepwater offshore Angola Block 15 commenced production in July 2005. Block 15 has estimated recoverable hydrocarbon reserves of 4.5 billion barrels, and at peak production, Block 15 is expected to produce 750,000 bbl/d.
The current production rate is more than 250 thousand barrels of oil per day. ExxonMobil said in January, 2008, it had started production at its Kizomba C development at a field off the Angolan coast that is expected to reach output of 100 000 barrels per day.
Exxon Mobil's Esso Angola owns 40 percent of the development and is operator of the field.
Kizomba C is part of the Mondo field, located in about 2 400 feet of water about 90 miles off the coast, and is part of the company's newest Angolan projects that also include the Saxi and Batuque fields.
Production from those two fields is expected to begin in 2008. Total production from the three will reach a total of 200 000 bpd.
Other participants in the offshore block include BP plc with a 26,7 percent stake, Eni with 20 percent, and StatoilHydro with 13,3 percent.
The Kizomba C development includes two floating production, storage and offloading vessels and 36 subsea wells, making it the largest subsea development operated by Exxon Mobil subsidiaries.
- Total's Girassol field was discovered in April 1996 by Elf Exploration Angola. Just over 2 years later, on 8 July 1998, the company obtained the official go-ahead from Angola’s national oil company Sonangol and the Girassol partners to launch a development project. Girassol, which was the first field on Block 17 to go into production. It has the capacity to produce 200,000 barrels per day. Total operates Block 17 with a 40 percent share, while Sonangol is its franchise holder. Other shareholders include ExxonMobil, BP, Statoil, and Norsk Hydro. Total has six discoveries on Block 32, which is located in ultra-deep water, 40 miles from Block 17’s Girassol find. Currently, the discoveries are being analyzed for a potential joint venture project. Total, as operator of the block, is joined with partners Marathon Oil Company, Sonangol, ExxonMobil and Petrogal. Deep-offshore Block 17 is Total’s major asset in Angola. It is composed of four major zones: Girassol and Dalia, both in production; Pazflor, which has been launched; and CLOV, a fourth major production area based on the Cravo, Lirio, Orquidea and Violeta discoveries, whose development is currently being studied. Future production from Pazflor and CLOV will come in addition to the more than 500,000 barrels of oil per day that are currently pumped from Girassol and Dalia structures on the Block 17. Rosa which came on stream in June 2007 with the connection to the Girassol FPSO will extend the production plateau of this FPSO until the next decade.
- Petrobras began operating in the country almost thirty years ago, in 1979, and has exploration and production agreements via participation in six offshore Blocks, one in production (Block 2) while the other 5 being explored.
- In September 2002, Canadian Natural Resources Ltd (CNR) signed a four-year PSA with Sonangol to explore for oil in the deep waters of Block 16, 72 miles off the Angolan coast.
- In February 2003, Devon Energy Corporation acquired a 25 percent stake in Block 24 from ExxonMobil. This acquisition increased Devon Energy’s total share of the block to 40 percent, making the company the operator of the block. ExxonMobil retains a 20 percent share. Sonangol and Petronas are also partners on the block. Devon Energy Corporation owns interests in three Angolan offshore exploratory blocks (blocks 10, 16 and 24) and one onshore block.
- In February 2004, Sonangol approved BP’s plans to develop the Greater Plutonio project in Block 18. Six fields (Colbalto, Cromio, Galio, Paladio, Platina, and Plutonio) will be developed using a single FPSO. Scheduled to come online in mid-2007, the Greater Plutonio project is expected to produce 240,000 bbl/d. BP maintains a 50 percent interest as the operator of Block 18 and Sinopec owns the other 50 percent share. In October 2006, BP announced its 11th discovery on Block 31. Industry experts believe Block 31 to contain 500 million barrels of commercial reserves. The block is located 118 miles offshore. BP is operator with 26.67 percent interest and is joined with partners ExxonMobil, Sonangol, Statoil, Marathon, and Total.
- In December 2006, Sonangol awarded French-based Technip a $70 million contract to develop the Gimboa field in Block 4.
- Tullow Oil plc concluded a farm-in agreement with Sonangol P&P in November, 2005, acquiring a 15% interest in Block 10/05 offshore Angola. Block 10/05, located in the Southern Kwanza Basin, is operated by Devon Energy. In early January 2006 Tullow completed a further farm-in agreement with Ocean Angola Corporation, a subsidiary of Devon Energy, acquiring a 15% interest in Block 24/99. In late July 2006 Tullow was formally advised that it had been awarded a 50% operating interest in Block 1/06, a 3,839 sq km oil exploration concession in the Lower Congo Basin, offshore Angola. The Production Sharing Contract came into force in December 2006. Block 1/06, which extends from a water depth of 40m to approximately 300m, contains three undeveloped oil fields, Pitangueira, Bananeira and Sapesapeiro.
- On November 2, 2006, VAALCO Energy, Inc officially signed a Production Sharing Agreement (PSA) for Block 5 offshore Angola.
VAALCO has a 40% interest in the block, and is the operator of the concession for its partners Interoil Exploration & Production ASA (40%) and Sonangol (20%). Block 5 covers an offshore area of approximately 1.4 million acres.
- Russia’s diamond-mining company ALROSA in a consortium with Angola’s Dark Oil obtained an oil and natural gas prospecting license, the company announced in December, 2007. The license is for blocks in the Lower Congo and Upper Kwanza districts, between the Etosha, Okavango and Kassanje basins, as well as on the country’s shelf, ALROSA said in a press release. Thus ALROSA has become the first Russian company to receive a license to conduct a large-scale exploration work to search for oil and gas deposits in Angola, the company said.
- In addition to licensing rounds, Angola signed various bilateral oil agreements in 2006 with Russia, Sao Tome and Principe, South Korea and Venezuela. The agreements promote increased collaboration on future oil exploration activities in Angola.