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ANPG President H.E. Paulino Jerónimo talks to Africa Oil & Power about the role the regulator has played in mitigating the impacts of the COVID-19 pandemic and implementing recovery measures for the industry.
What have been the key developments in the Angolan oil sector in the past twelve months, giving particular weight to the state of emergency imposed by COVID-19?
In the last 12 months, several agreements have been negotiated and signed in different concessions. In block 14, the redevelopment of the demarcated Tombua Landana area that comprises the old areas of Kuito, Benguela, Belize, Lobito, Tomboco and Tombua Landana was negotiated. This agreement provides for the drilling of several development and exploration wells, adding approximately 60 million barrels in reserves to the public during the first phase. Another agreement is that of block 15, which brought together several development areas and establishes the phase one drilling of 17 development wells, which will provide additional production. In block 18, the development of the Platina field was agreed, which will be part of the Greater Plutonio development area, allowing the addition of around 20,000 barrels of oil production per day in the near future. In block 17, the Clov Phase II and Dália Phase III projects are expected to take off. Several actions are being taken to improve operational efficiency in all concessions. The state of emergency imposed by COVID-19 caused a delay in the implementation of the aforementioned projects as it caused the temporary suspension of the contracts of most of the rigs operating in the country. We have been working with the Ministry of Mineral Resources, Oil and Gas, the oil operators and service providers to prevent the spread of the pandemic in the oil installations and the return of the rigs as soon as possible in order to push these projects forward.
What is the status of the upcoming oil and gas licensing round; do you foresee any further delays in the tender and awarding of blocks?
Regarding the next bidding round, we are preparing for the publication of the preannouncement in early October, and the terms of reference should be published 120 days later. We expect to close the process in the middle of 2021 by awarding the tendered blocks. There is great interest on the part of small and medium-sized companies to participate in onshore bids.
What is the focus of the revised hydrocarbon exploration strategy proposed by the ANPG, and how does it differ from the existing 2019-2025 licensing strategy?
The 2019-2025 concession allocation strategy is only one of the objectives contained in Angola’s Hydrocarbon Exploration strategy, which includes three other objectives and is therefore more comprehensive. The exploration strategy includes the evaluation of the exploration potential in licensed concessions, encouraging the contracting groups to carry out exploration within the development areas and to reevaluate the remaining potential of the block. It also includes the assessment of the possible potential for unconventional hydrocarbons onshore and the assessment of the ultra-deep areas of the Congo and Kwanza basins. The assessment of gas potential in the different basins is also a central theme in this strategy. It establishes goals for each of the objectives and defines the sources of financing for the implementation of the strategy and its impact on oil production in the coming years. In short, it is a more robust document when it comes to exploration.
Will license extensions granted in Blocks 14, 15 and 17 before COVID-19 alleviate time and financial pressure on the completion of drilling programs?
Naturally, COVID-19 has an impact on the deadlines for the start of the implementation of the agreements, since the drilling activity was temporarily suspended. However, today we are pleased that, thanks to the joint effort of the different players in the industry, the rigs are beginning to return to resume exploration.
How might COVID-19 alter the exploration landscape, in terms of driving investment into natural gas and renewables as a response to a low and volatile oil price?
Oil will continue to be of great interest to investors, as shown by the high investments that continue to be made in the production of this commodity and the continued interest in new concession tenders. However, some agreements were signed with regard to gas production. I refer to the New Gas Consortium, which provides for the development of gas fields in blocks 1, 2 and 3 for the supply of Angola LNG and for other domestic projects, and the Sanha Lean Gas Connection from Cabinda which aims to build a platform for sending gas from the Nemba and Sanha fields to Angola LNG. The search for gas is one of the central objectives in our exploration strategy, with the aim, in addition to supplying Angola LNG, of building a new development pole where gas is found in quantities that justify it.
How does the ANPG see domestic production shifting in the short, medium and long term?
It is well known that domestic production is in sharp decline, with this decline estimated at 12-16% per year. In the short term, the improvement of operational efficiency, well intervention campaigns as well as the drilling of new wells, will alleviate this decline. In this chapter, we also include, in case of success, exploration in established development areas. In the medium term, with the approval of several marginal discoveries, it will be possible to start production in new fields under different concessions, which will have an impact in combating the decline. In the longer term and in case of success, we count on new output from the blocks that will be awarded between 2019 and 2025.
In light of OPEC-led production quotas, how critical is pan-African and global cooperation to ameliorating the decrease in commodity prices?
In our opinion, pan-African cooperation will always be important, regardless of OPEC cuts. The African Petroleum Producers Organization has been bringing together African producing countries and improving their performance.