Total Extends Angolan Upstream Interests
Total and partners Norwegian Equinor, US ExxonMobil and UK BP have agreed to extend their consortium’s production licences in Block 17 to 2045, the French major said December 16. 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. All the existing equity stakes will be reduced proportionally. The deal includes production bonuses and some social progammes.
Block 17 is among the oil fields that supply associated gas to the Angola LNG project and is 150 km offshore in water depths ranging from 600 to 1,400 metres. It has yielded almost 3bn barrels of oil since 2001 by four floating production, storage and offloading (FPSO) units: Girassol (2001), Dalia (2006), Pazflor (2011) and CLOV (2014). Total says there are still more than 1bn boe yet to be produced.
Three short-cycle brownfield projects – Zinia Phase 2, CLOV Phase 2 and Dalia Phase 3 – are under development on Block 17 to add 150mn 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. Total took final investment decision (FID) on Zinia-2 in May last year.
CEO Patrick Pouyanne said the "golden block" had seen "numerous technological developments and innovations” over the last 20 years. “This is a significant milestone in our long history in the country and illustrates our commitment to continue developing Angola’s energy sector,” he said.
State regulator ANPG said it was "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 boe/d through 2024.”
Following the deal, Total will own 38%; Equinor, 22.16%; ExxonMobil, 19%; BP, 15.84%; and Sonangol (5%).
Total’s equity production averaged 211,000 boe/d in 2018 from operated blocks 17 and 32, and from non-operated assets 0, 14, 14K, and Angola LNG, of which it owns 13.6%.
In the gas sector, Total holds a 13.6% stake in the 5.2mn metric tons/yr Angola LNG liquefaction plant, which is supplied with associated gas from the country’s producing offshore oil fields. Total also recently entered the New Gas Consortium as a key player in developing Angola’s natural gas resources.
Angola LNG draws its gas supply from a diverse range of sources. The primary source was initially associated gas from offshore oil operations in Blocks 15, 17, and 18. This was followed by connecting Blocks 0 and 14, Block 31 and 32. Angola LNG will also develop and produce non-associated gas as needed from dedicated gas discoveries within Blocks 1 and 2.
Total buys new acreage
Total has also bought blocks 20 and 21 in the Kwanza basin, it said December 16, where wells have produced four discoveries – Cameia, Mavinga, Bicuar and Golfinho. Total and partners will seek to unlock the value of these prospects by creating a development hub. Total will also explore for additional potential resources in the blocks.
As part of the agreement, Total will operate the two licences in the development phase before putting in place an operating company together with Sonangol within three years of production start-up. Total will pay Sonangol $400mn at closing, followed by $100mn at FID and some additional payments along the life of the project.
Total will hold a 50% working interest, alongside Sonangol (20%) and BP (30%), in Block 20/11, in the central Kwanza Basin in water depths ranging from 300 m to 1,700 m. Total will hold an 80% working interest alongside Sonangol (20%) in Block 21/09, in the south-central Kwanza Basin in water depths ranging from 1,600 m 1,800 m.