OIL majors BP, Eni, Statoil and Total, plus US independent Cobalt International Energy, have finally secured “pre-salt” acreage offshore Angola, a year after the West African country indicated that they were in the running for production sharing contracts.
These were finally ratified late last month, which means that the companies are free to get on with hunting out new oil and gas resources that may turn out to be as prolific as those found on the opposite side of the Atlantic off Brazil.
If this turns out to be the case then the increasingly busy Angola sector could turn into a bonanza for the oil companies, state petroleum company Sonangol and the state.
For BP, the deal means that its existing Angolan holding is more than doubled, thanks to securing four blocks in the deep-water Kwanza Basin and Benguela Basins. The company has also gained a fifth stake via a separate farm-in deal.
It means that BP now holds the operatorship of blocks 19 and 24, with a 50% interest, and non-operating interests of 20% and 15% in blocks 20 and 25 respectively. Through the farm-in, the company has secured a 40% stake in Block 26 in the Benguela Basin, which is operated by Petrobras of Brazil.
The latest PSC deals give BP interests in nine blocks off Angola covering 32,650sq km, with the five new blocks spanning 24,000sq km in water depths ranging 200-2,500m.
BP has ploughed some $21billion into offshore Angola over the past 10 years and already has pre-salt experience.
It already has stakes in four blocks … 15 and 17 non-operated; 18 and 31 operated. The company has production from Blocks 15, 17 and 18. Reported output for 2010 was 170,000 net barrels per day (bpd).
BP’s exploration programme on block 31 has so far led to 19 discoveries, five of which are pre-salt. First commercial oil from the block is scheduled for this year.
Italy’s Eni gained operatorship of the 4,900sq km block 35 in the Kwanza basin, with a 30% interest alongside partners Sonangol P&P (45%) and Spain’s Repsol on (25%).
The commitment under the Eni PSCs covers drilling of two wells and a 3D seismic survey of 2,500sq km during the initial five-year exploration period.
Like BP, the Italian energy group already has experience of Angola through its operatorship of block 15/06, where it has recently secured SBM Offshore’s Xikomba FPSO for the Western Hub development, as well as participation in blocks 14 and 15.
Total signed PSCs with Sonangol for three deep-water blocks in the Kwanza basin, with operatorship of blocks 40 and 25, where it will hold 50% and 35% respectively, and a 15% interest in block 39.
On block 40, Total will be partnered by Sonangol P&P (30%) and Statoil (20%) while partners in block 25 are Sonangol P&P (30%), Statoil (20%) and BP (15%).
Block 39 is operated by Statoil with 55%, with Sonangol P&P (30%) along with Total as partners.
All told, Statoil has been awarded operatorship for blocks 38 and 39 and partner position in blocks 22, 25, 40.
Block 38 is held in partnership with Sonangol P&P and China Sonangol with 30% and 15% interest respectively.
Block 22 is held in partnership with operator Repsol (30%) and Sonangol (50%).
The work commitment comprises acquiring 18,400sq km of 3D seismic data and participation in eight exploration wells.
Statoil already holds interests in blocks 4/05, 15, 15/06, 17 and 31.
The Angolan continental shelf is the largest contributor to the company’s production outside Norway.
Cobalt International secured the operatorship of block 20 in which BP is already referred to as holding 20%. Other partners comprise China Sonangol International (10%) and Sonangol (30%).
The last time Angola attempted to stage an offshore licensing round was in 2008, but this was cancelled owning to collapsing financial and plummeting oil prices.