ExxonMobil Solidifies Long-Term Block 15 Position
In yet another demonstration of a growing drive to push for exploration and ramp up production in Africa’s second biggest oil producer, ExxonMobil and its partners have announced an agreement to extend their operating license for Angola’s block 15.
As will now be the case with every license agreement in Angola, this deal was negotiated and concluded with Angola’s recently established National Agency for Petroleum, Gas and Biofuels, (ANPG), which effectively took over the regulatory obligations previously held by Sonangol.
The renewed production sharing agreement will see Sonangol enter as a partner in the project, owning 10% of the license, and the end of the operating period extended from 2026 to 2032.
The consortium has also signed off on a multi-year drilling program that will be able to add 40 thousand additional barrels of oil to the block’s current production and create around 1000 local jobs during implementation. According to the company, new infrastructure technology will be deployed in the block, designed to increase the capacity of the existing subsea flow lines and increase output.
The agreement falls in line with a new drive led by the Angolan government to promote new exploration, production, and recovery optimization and marks one of the first times that Sonangol enters a contract solely as an oil and gas company and not as the sector’s supervising entity.
Sonangol’s 10% stake was taken proportionally from each of the other four members of the consortium. Exxonmobil went from having 40% to having 36% of the license, BP from 26.67% to 24%, ENI from 20% to 18% and Equinor from 13.33% to 12%.
The extension of the block’s license is also meaningful for Exxon, as it strengthens its position at the helm of one of the country’s longest-producing and most proliferous blocks. With potential recoverable resources estimated at 4 billion barrels of oil equivalent, block 15 has been online since 2003 and has since produced over 2 billion barrels of oil and gas.
Exxon also has interests in blocks 17 and 32 and has reportedly already invested over $30 billion since it first started working in Angola in 1992. According to the company, the three blocks have potential recoverable reserves of over 10 billion barrels.
Sector reforms promoted by the President H.E. João Manuel Gonçalves Lourenço’s government, including the creation of the ANPG and the launch of new bid rounds, coupled with the recovery of the price of oil in international markets in recent years are expected to drive a substantial rise in exploration activity in Angola in the coming years.
Returning for its second year, the Angola Oil & Gas Conference & Exhibition will be hosted in June 16-17, 2020 in Luanda, and will focus on an international investment drive aimed at bringing new deals and signing new entrants into Angola’s oil and gas sector.