The Profitable Oil Prospects Of Block 1, Offshore Angola

Tullow Oil was awarded operatorship and a 50% interest in Block 1, whose water depths range from 50 to 600 meters. Block 1 is one of Angola's offshore oil-producing blocks, which have been the focus of interest in recent years due to their considerable reserves. Angola is sub-Saharan Africa's second-largest oil producer, and its economy is highly dependent on oil exports, with the industry accounting for more than 40% of the country's GDP. Block 1 is located in the Namibe basin, an underexplored area offshore Angola, and Tullow Oil is working alongside other foreign companies, including ProdOil and Force Petroleum, to develop the block.

Tullow Oil wins operatorship

Tullow Oil is a UK-headquartered oil and gas company that has been operating in Angola since 1980. In 2023, Tullow Oil set in motion the sale of its entire interest in Tullow Guyana (TGBV) to Eco Guyana Oil and Gas, a subsidiary of Eco (Atlantic) Oil & Gas. This move was in line with Tullow Oil's strategy to focus on its high-return production assets in Africa.

In Angola, Tullow Oil has a presence in the operated Block 15/06, with two producing hubs, and the development of a third hub on the Agogo field. Additionally, the company operates in the exploration phase of Block 1/14 (offshore Lower Congo Basin) and the Cabinda Norte and Cabinda Centro blocks onshore. Tullow Oil will soon add Block 28 in the offshore Namibe Basin to its operated areas. As of 2021, the company's equity production in Angola was about 120,000 barrels of oil equivalent per day.

Tullow Oil's commitment to sustainability and carbon neutrality by 2050 is evident in its integrated energy company model. The company aims to provide affordable energy in a sustainable way for people and the environment, contributing to a just transition. Their satellite model creates independent companies to expedite the development of new businesses linked to the energy transition.

Tullow Oil's exploration and production activities in Angola, specifically in Block 15/06, have led to several significant light oil discoveries. The company leverages its effective proprietary technologies and capabilities to quickly turn resources into production. Their exploration strategy, known as "ILX" or infrastructure-led exploration, involves pursuing exploration opportunities near existing infrastructures. This approach has resulted in discoveries such as Cuica, with an estimated size of 200 to 250 million barrels of oil in place.

Tullow Oil's presence in Angola, particularly in Block 15/06, contributes to the country's organic growth strategy. The company's equity production in the country accounts for a significant portion of its overall output. By focusing on its high-return production assets in Africa, Tullow Oil aims to optimise its portfolio and unlock value from its emerging basin licences.

Drilling to create 1,000 local jobs

Block 1 offshore Angola is an exploration block in the Lower Congo Basin, located east of the prolific Block 15/06. Eni, an Italian energy company, has been present in Angola since 1980 and is the operator of Block 1/14 with a 35% stake. The other partners in Block 1/14 include Equinor (30%), Sonangol P&P (25%), and local company ACREP (10%).

Drilling activities in Block 1/14 are expected to create 1,000 local jobs, providing employment opportunities for Angolans and contributing to the country's economic development. The jobs created will likely include a range of positions, such as drilling operators, supervisors, engineers, technicians, and support staff. These jobs will require individuals with relevant experience and expertise in drilling operations, maintenance, and repair of equipment, as well as knowledge of health and safety protocols.

The creation of 1,000 local jobs through drilling activities in Block 1/14 is a significant development for Angola, offering employment and economic opportunities for the local population. It demonstrates the continued importance of the country's oil and gas industry, which has attracted major international companies. The drilling activities will not only provide jobs but also contribute to Angola's energy production and overall economic growth.

The drilling activities in Block 1/14 are part of Eni's commitment to organic growth in Angola. The company operates in exploration and production phases, with a current equity production of about 120,000 barrels of oil equivalent per day. Eni's presence in Angola includes operated blocks with producing hubs and the development of new hubs, such as the Agogo field. The company's focus on exploration and production, along with its investment in the country, contributes to its organic growth strategy.

In addition to Block 1/14, Eni is also involved in other blocks in Angola, including Block 15/06, located in the deep offshore, and Block 28 in the Namibe Basin. The company's activities in these blocks, along with its plans for Block 1/14, showcase its long-term commitment to Angola's oil and gas industry and the creation of local job opportunities.

Kizomba satellite project

The Kizomba Satellite Project is an ExxonMobil-led initiative located in Block 15, approximately 150km off the coast of Angola in water depths of around 1350 metres. The project is a subsea infrastructure development of the Kakocha, Bavuca, and Mondo South fields, with the aim of optimising the capabilities of existing Block 15 facilities to increase production levels without requiring additional FPSOs (Floating Production, Storage, and Offloading vessels).

The Kizomba Satellites Phase 1, which began production in July 2012, included the development of the Mavacola and Clochas fields, which are estimated to hold 250 million barrels of oil. This phase involved the drilling of 18 wells, which were tied back to the existing Kizomba A and B FPSOs. The project cost $1.5 billion and was completed ahead of schedule, with a strong focus on safety and the utilisation of local suppliers and businesses.

Kizomba Satellites Phase 2, operated by ExxonMobil's subsidiary Esso Exploration Angola, involves the development of the Kakocha, Bavuca, and Mondo South satellite fields. Mondo South was the first field to begin production in April 2015, with the other two fields expected to follow suit in the same year. This phase is expected to recover around 190 million barrels of oil, with a peak production capacity of 70,000 barrels of oil per day. The total investment in the project is estimated to be $2.4 billion, with nearly $740 million invested in Angola for fabrication, logistics support, and the training and development of Angolan personnel.

The project scope includes the drilling of 24 production wells, modifications to the topsides of the existing two FPSOs, and the installation of subsea flowlines and equipment. The development utilises the existing Kizomba B FPSO, which has a production capacity of 250,000 barrels per day and a storage capacity of 2.2 million barrels, and the Mondo FPSO, with a production capacity of 10,000 barrels per day and a storage capacity of 1.6 million barrels.

Partners in the Kizomba Satellite Project include BP Exploration Angola (26.67%), Eni Exploration Angola (20%), and Statoil Angola Block 15 (13.33%). Sonangol is the concessionaire, and Esso Angola holds a 40% interest in Block 15.

Eni's commitment to Angola

Eni has been present in Angola since 1980 and is committed to the country's fair energy transition. The company operates through the joint venture Azule Energy, Angola's largest independent hydrocarbon producer, to achieve greater operational efficiency in exploration, development, and production. Eni contributes to guaranteeing the security of energy supplies and shares resources and technologies with Angola.

In the natural resources sector, Eni operates through the Azule Energy joint venture. They have implemented a production project that exploits innovative technologies and reduced time-to-market, in line with their decarbonization strategy. Eni applies innovative digital and experimental geoscience technologies in exploration, such as acquiring three-dimensional data and images of the subsurface and rocks. Their Infrastructure Led Exploration (ILX) campaign and its overlap with the development phase allow their discoveries to reach the market quickly.

In addition to the natural resources sector, Eni is also active in the renewables field with the Caraculo photovoltaic project. They are also developing a decarbonization programme for the country, focusing on sustainable crops for biofuel production. Eni is committed to environmental protection and carefully implements specific regulations, such as the Zero Discharge Policy for managing production water and drilling residue. They focus on technological innovation to minimize discharge and emissions and work on the reuse of gas associated with extraction and energy recovery.

Eni is dedicated to socio-economic development in Angola, with diversified initiatives in medicine, agricultural education, vocational training, and entrepreneurship. They have launched initiatives to promote schooling, provide school materials, and encourage reading among students. Eni also supports the HALO Trust project, which trains teams of female de-miners, creating new job opportunities for women. They have installed solar systems and implemented sanitary and vaccination campaigns through the Eni Foundation. Additionally, they promote improved cooking systems, providing access to safer and more sustainable solutions for families in rural and suburban areas.

Chevron's leading role

Chevron has had a presence in Angola for over 60 years, and its subsidiary, Cabinda Gulf Oil Company Limited (CABGOC), has played a leading role in the country's oil and gas industry. In December 2021, CABGOC secured a 20-year extension of the Block 0 concession off the coast of Cabinda province, which will now continue through 2050. This block is divided into Areas A and B, with a total of 21 fields, and has been in production since early 2017. The Mafumeira Sul project, located in Block 0, includes a central processing facility, two wellhead platforms, an extensive network of subsea pipelines, and numerous producing and water injection wells.

Chevron's role in Block 0 exemplifies its commitment to Angola's energy sector. Billy Lacobie, the managing director of Chevron's Southern Africa Strategic Business Unit, expressed his pleasure at the opportunity to continue partnering with the Angolan government and local associates. Chevron's industry-leading exploration and production capabilities have contributed significantly to Angola's oil and gas development.

In addition to Block 0, CABGOC is also involved in other projects in Angola. The company operates and holds a 31% interest in a production-sharing contract (PSC) for deepwater Block 14, located west of Block 0. Furthermore, Chevron has a significant stake in Angola LNG Limited, which operates an onshore natural gas liquefaction plant in Soyo, Zaire province. This plant is unique as it is the world's first LNG plant supplied with associated gas, a byproduct of crude oil production.

Chevron's presence in Angola extends beyond these projects. The company has signed Risk Service Contracts (RSC) for Block 49 and Block 50, located in the ultra-deep waters of the Lower Congo Basin. These contracts, awarded in January 2024, mark Chevron's first operated assets outside the Cabinda concessions. The company also holds stakes in other blocks, such as Block 14/23, where it operates with a 31% stake. Additionally, Chevron is committed to exploring low-carbon business opportunities in Angola, including carbon offsets and lower-carbon intensity fuels.

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