Total eyes new production hub offshore Angola
French oil giant Total has acquired interests in two new licenses offshore Angola in view of developing a new production hub. In addition, Total has extended all Block 17 production licenses until 2045.
Total said on Monday it had signed a sale and purchase agreement with state-owned Sonangol of Angola to acquire interests in Blocks 20/11 and 21/09 in the Kwanza Basin, offshore Luanda.
Subject to the approvals of the competent authorities and partners, the group will hold a 50% working interest, alongside Sonangol (20%) and BP (30%), in Block 20/11, located in the central Kwanza Basin in water depths ranging from 300 to 1,700 meters.
In addition, the group will hold an 80% working interest alongside Sonangol (20%) in Block 21/09, located in the south-central Kwanza Basin in water depths ranging from 1,600 to 1,800 meters.
The wells drilled so far in the two blocks have produced four discoveries — Cameia, Mavinga, Bicuar and Golfinho — and Total and its partners will seek to unlock the value of these prospects by creating a development hub. The group has also committed to explore for additional potential resources in the blocks.
As part of the agreement, Total will become operator of the development of the two licenses before putting in place an operating company together with Sonangol three years after the production start-up.
As per the transaction terms, Total will pay to Sonangol $400 million at closing, to which will be added $100 million at FID and some additional payments along the life of the project depending on production and crude oil price for a maximum cumulative amount capped at $250 million.
“We are very pleased to demonstrate once again our pioneer spirit and our commitment to continue developing Angola’s energy sector by becoming the first company to undertake a development in the Kwanza Basin,” stated Patrick Pouyanné, Chairman and Chief Executive Officer of Total.
“Sonangol welcomes Total as new operator of these strategic blocks,” added Sebastião Gaspar Martins, Chairman and Chief Executive Officer of Sonangol.
“We are confident that Total’s recognized offshore expertise will help to quickly unlock discovered resources in order to continue sustaining the Angola’s production.”
Production license extended to 2045
In addition, Total, operator, and its partners Equinor, ExxonMobil, and BP have signed an agreement with national oil, gas and biofuels agency ANPG and state-owned Sonangol of Angola, to extend their consortium’s production licenses to 2045.
As part of the agreement, Sonangol will obtain a 5% interest in Block 17 on the effective date and an additional 5% interest in 2036. Additionally, the consortium will pay some production bonuses to the State of Angola along the life of the license and will spend $20 million for social programs.
Located 150 kilometers off the Angolan coast in water depths ranging from 600 to 1,400 meters, Block 17 has been a true success story, with almost 3 billion barrels of oil produced since 2001 by four floating production, storage and offloading (FPSO) units: Girassol (2001), Dalia (2006), Pazflor (2011) and CLOV (2014).
Currently producing around 440,000 barrels of oil equivalent per day, the potential of this very prolific block is still high, with more than 1 billion barrels yet to be produced.
Three short-cycle brownfield projects — Zinia Phase 2, CLOV Phase 2 and Dalia Phase 3 — are currently under development on Block 17 to add 150 million barrels of resources, and other brownfield projects for extending the production of Pazflor, Rosa, Girassol and Dalia are under study. Additional exploration campaigns might also help unlock further resources and two wells are already planned to be drilled in 2020.
“We are very pleased to continue the Block 17 success story in Angola. This golden block has allowed us to demonstrate our deep offshore excellence over the past 20 years with numerous technological developments and innovations,” stated Patrick Pouyanné, Chairman and Chief Executive Officer of Total.
“This is a significant milestone in our long history in the country and illustrates our commitment to continue developing Angola’s energy sector.”
“We are confident that Total and its partners are committed to examining a number of short-term investment opportunities that have already been identified in order to maintain the production above 400,000 barrels of oil equivalent per day through 2024,” commented Paulino Jeronimo, Chief Executive Officer of ANPG.
“We also look forward to exploring the vicinity in order to add further resources to the Block 17 and, more broadly, for the Country.”
“Sonangol is proud to further diversify its portfolio through this impressive asset and to join the successful Golden Block adventure,” noted Sebastião Gaspar Martins, Chairman and Chief Executive Officer of Sonangol.
After the entry of Sonangol, the Block 17 contractor group comprises Total, operator with a 38% working interest, alongside Equinor (22.16%), Exxon Mobil (19%), BP (15.84%), and Sonangol (5%).
Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.
Also, if you’re interested in showcasing your company, product or technology on Offshore Energy Today, please contact us via our advertising form where you can also see our media kit.