Eni, BP fire up Azule JV in Angola
BP and Eni have formally launched Azule Energy, their Angolan independent joint venture aimed at producing 250,000 net barrels of oil equivalent/day from Angola's upstream sector by 2027.
Azule Energy was officially established August 2, following a third-party financing of $2.5bn aimed at supplying early cash flow, and regulatory approvals secured from relevant Angolan stakeholders, Eni said. In addition to oil and gas, Azule Energy will also take management of Eni's share in Solenova, a solar JV run with Angola's national energy company Sonangol.
The new 50:50 joint venture holds stakes in 16 Angolan upstream licences, including six exploration concessions. It also participates in the Angola LNG operating consortium. Angola LNG launched in 2013 and currently boasts a single 5.2 metric tons/year liquefaction train, converting associated gas extracted from Angolan oilfields. Eni and BP both hold 13.6% equity stakes in the liquefaction project, which is situated 350km north of Luanda in the town of Soyo.
Their shareholdings will now be combined under Azule Energy's management, consolidating their investment at a moment of increased global demand for African LNG resources.
Despite the merger, Azule Energy will report hydrocarbon output, reserves and emissions on an equity share basis, in the accounting figures for each 50-50 shareholder. The deal valued Eni's upstream Angolan assets at around $7.3bn, and BP's portfolio at roughly $6.8bn. To level the two valuations, Eni received an adjustment payment of around $338mn.
The Azule Energy pipeline includes a slate of near-to-medium term projects. These include Angola's Agogo Full Field and PAJ projects, two oil-focused developments located in Angolan blocks 15/06 and 31 respectively. In addition, Azule Energy will participate in Angola's sole 65,000 barrels of oil/day capacity oil refinery in Luanda.
In terms of natural gas, Azule Energy will participate in Angola's New Gas Consortium (NGC), the country's first non-associated gas project. NGC comprises two gas fields slated to launch 2026, Quiluma and Maboquiero. The FID for project delivery was last week sanctioned by NGC's operating consortium, which also includes Chevron, Sonangol, Gas e Biocombustiveis and Agência Nacional de Petróleo.
NGC will aim to build domestic economic linkages to the gas value chain and will also supply more feedstock for Angola LNG's exports campaign. NGC's output is set to plateau at 330mn ft3/day, or 4bn m3/yr. Azule Energy owns a combined 37.4% operated stake in the NGC following the merger of Eni and BP's interests.
Eni and BP have also rolled up more than 30,000 km2 of exploration acreage in Angola's "most prolific" basins, which they say benefit from near-field access to existing infrastructures.
Azule Energy's inaugural CEO is Eni's Adriano Mongini. Mongini has since 2019 headed up the Italian company's East African division. He said: "I feel honoured to be the first CEO of the company. Together with a highly competent and motivated leadership team, we are committed to develop the full potential of the company portfolio of development and exploration opportunities.
"With finance discipline and focus on health, safety and the environment, Azule Energy will maximize the value of the assets for the benefit of Angola and the of the shareholders.”