Beyond question, Angola is today's hottest exploration frontier. And, it has overtaken strife-torn Nigeria, with its production greatly diminished, as Africa's largest oil producer. But, even with these remarkable achievements, Angola continues to be characterized by civil war, corruption, and abject povertychiefly because of Jonas Savimbi and his UNITA guerilla movement.
Oil was discovered in Angola in 1955, long before the West African nation gained its independence from Portugal in 1975. Its crude oil is of generally high quality, with an API gravity ranging from 32o to 39.5o and sulfur content from 0.12% to 0.14%. Production levels have increased annually to a 1998 peak of 750,000 b/d. But those figures are only a shadow of Angola's projected future productionat least 1 million b/d by next year, 2 million b/d in a few more yearsprimarily attributable to deep offshore exploration.
"Everyone wants in on the Angola deepwater," says a prominent European oil analyst. "There is simply nowhere else as hot as Angola is today."
It is true. Major international oil companies have taken on important concessions from the Cabinda enclave in the north to the Namibian frontier. And they continue to wrangle over as yet unassigned blocks, despite the downturn in oil prices, with signature bonuses simply for the right to explore in Angolan waters up to as much as US$100 million.
High-profile Discoveries (Back to Top)
What has made Angola the hottest oil play in the world is the remarkable string of high-profile discoveries of giant oil-bearing structures made by Elf, Chevron, and Exxon over the past three yearsdiscoveries as a result of new 3D seismic and drilling technology that allows drilling in water depths as great as two miles. Reserves amounting to some 12 billion bbl of oil have been discovered to date, almost half of that since 1995, and according to Sonangol (Sociedade Nacional de Combustiveis de Angola) that isn't even half the hydrocarbons yet to be found, since exploration and discoveries have occurred in only two of Angola's three coastal basins, the Lower Congo and the Kwanza, and the other, the Namibe, is totally unexplored. In fact, almost all the significant discoveries have been made since 1995, when deepwater exploration began, and, of the 13 deepwater discoveries in Africa last year, nine were in Angolan waters.
Unlike in Nigeria, where demands for a greater share of oil revenues from local ethnic groups have disrupted exploratory and developmental drilling with outbreaks of violence and destruction against the central government and several of the oil companies, Angolan oil production has been relatively untouched by the endemic guerilla movement, with the exception of a few instances in Cabinda, because most of its oil production is offshore and out of reach of the guerillas.
It was in the Gulf- now Chevron-controlled Cabinda enclave that Angola's oil began to flow first, both onshore around Soyo and offshore, then from small-to-average-size fields along the coast in the Kwanza Basin north of the capital of Luanda, and offshore the northern coast.
Chevron's Block 14.
Area A, Area B, and Area C, (Block Zero) offshore the enclave of Cabinda, account for nearly 65% of Angola's crude production. The Chevron subsidiary, Cabinda Gulf Oil Company (CABGOC), operates the fields located offshore Cabinda, and it has a 39.2% share in the JV. Other partners include Sonangol (41%), Elf (10%), and Agip (9.8%). The largest producing fields are Takula (Area A), Numbi (Area A), and Kokongo (Area B). CABGOC and its partners hope to expand production in the three areas to 600,000 b/d in approximately a year. The start-up of production from the Lomba (Area B) Field was announced in May 1998. Production is currently 27,000 b/d.
The second largest area of production in Angola is the Elf Aquitaine-operated Block 3, which is located offshore the northern coast. The largest fields in this area are Pacassa, Cobo-Pambi, and Palanca. Storage and export facilities for the Block are provided by a terminal located on the Palanca Field. The Oombo Field, a satellite of the Cobo-Pambi Field (1996 production of 54,000 b/d), came onstream a year ago and is now producing 9,500 b/d.
Block 2, operated by both Texaco and Total (France), located offshore the northern Angolan city of Soyo, is also currently in production. Major fields include Lombo, Sulele, and Tubarao.
Petrofina (Fina) of Belgium holds the concession for operating all of Angola's onshore production, which is centered in two areas, Kwanza, near Luanda, and the Congo Basin near Soyo. Production facilities near Soyo were damaged by guerillas three years ago, but a $250 million post-war rehabilitation program is underway. Ganda, Pangala, Kitona, and N'Zombo are Fina's major onshore fields.
Dynamic Deepwater (Back to Top)
Although the long history of oil production from the Cabinda enclave established Angola as one of the world's traditional oil plays, there was nothing unique about it until the mid-1990s, when the movement into deepwater exploration came to West Africa and Elf discovered the giant Girassol Field in Angola's Block 17 in 4,500 ft (1,365 meters) of water, setting off a stampede for deepwater concessions.
Girassol was only the first of several major discoveries Elf made in Block 17, which is located in deep offshore waters northwest of Luanda. Estimated to contain between 700 million and 2 billion bbl of recoverable reserves, the giant field is scheduled for developmental drilling in September, with production planned to begin in the fourth quarter of 2000 and full operation by 2003. The world's largest floating production, storage, and off-loading (FPSO) vessel will be utilized on Girassol because of the extreme water depths. Some 200,000 b/d should be produced when fully operational.
Click here to see Exxon's development scenario for deepwater fields.
Elf's second discovery on Block 17, in August 1997, was the Dalia Field, with estimated recoverable reserves of 750 million to 1.5 billion bbl of oil, putting it in the same class as the Brent Field in the North Sea. A second exploratory well was drilled on Dalia in December 1997, producing results similar to the initial find. The field may take longer to develop than Girassol, because of its larger size, and an additional FPSO will probably be needed.
Elf (35%), and its partners on Block 17, Exxon (20%), BP (16.7%), Statoil (13.3%), Norsk Hydro (10%), and Fina (5%) announced third and fourth oil discoveries, Rosa, in March 1998, which tested at a rate of 12,000 b/d, and Lirio, which tested at 11,000 b/d.
CABGOC made its own huge oil discovery, in deepwater offshore Cabinda, in April 1997. The field, designated Kuito, has estimated recoverable reserves of 1-2 billion bbl. It lies in waters 1,300 ft (400 meters) deep in Block 14, which is adjacent to Areas B and C. CABGOC is the operator of the PSA working on Block 14, and it has 31% interest in the venture. Other partners in the PSA are Sonangol (20%), Total (20%), Agip (20%), and Petrogal (9%). Initial production from Kuito is expected to begin this year at a rate of 50,000 b/d, eventually rising to 200,000 b/d. In January 1998, CABGOC made a second major oil find on Block 14, the Landana Field, which tested at rates similar to the Kuito Field. Two additional discoveries, the Benguela and Belize Fields, followed the Landana find, the former expected to go on production this year at 50,000 b/d, rising to a maximum level of 200,000 b/d. CABGOC and its partners are drilling three additional exploratory wells to delineate the size of Landana. If viable, it, too, could be onstream by the end of this year.
A giant deep-draft caisson vessel destined for Angola deepwater takes shape in a European yard.
In March 1998, Exxon subsidiary Esso discovered the Kissanje oilfield on Block 15. Initial results from the test drilling were 10,000 b/d. Three more discoveries were made on Block 15 shortly after the Kissanje Field, Marimba, Hungo, and Dikanza. Marimba's initial test flows was 6,800 b/d. Total Block 15 reserves are now thought to be approximately 1 billion bbl. Exxon is the operator with a 40% interest in Block 15. Other participants are BP-Amoco (26.7%), Agip (20%), and Statoil (13.3%).
Exploration is also continuing on offshore Block 4. Canada-based Ranger is planning to drill additional wells near a 1996 discovery that tested at 7,400 b/d. Ranger has a 40% interest on the block, except for the Block 4-Kiame Field, where it has 100% interest. Production of 7,000 b/d on Kiame begin in 1998 after the arrival of a FPSO.
These recent deepwater discoveries in Angolan aquatory have precipitated a race to claim the country's unallocated blocks. As a consequence, Block 19, located in deepwater offshore Luanda, was awarded to a group composed of Fina (30% and operator), Ranger (25%) Sonangol (20%), United Meridian Corporation (20%), and Naphta (5%). Block 20 has gone to Mobil, Block 21 to BHP, and Block 22 to Texaco. Bids for Blocks 23, 24, and 25 were accepted in 1997, and licenses awarded last year. Block 23 is so far unawarded, but Blocks 24 and 25 have gone to Esso. At the end of 1998, license awards were made for Blocks 31-34. BP-Amoco received Block 31, Elf Block 32, Esso Block 33, and Sonap Block 34.
There are also plans to establish many new ultra deepwater blocks in the Northern UltraDeep West and Northern UltraDeep Kwanza regions, and a series of approximately 15 new blocks are expected to be announced soon along Angola's southern coastline.
All of these remarkable deepwater discoveries have occurred in the Lower Congo Basin, which seismic profiles have shown to be deepwater Oligocene and Miocene sands characterized by compressional folding and subordinate salt diapirism, with Malembo Formation structures the primary prospective intervals. Both the Oligocene and Miocene succession show an abundance of bright amplitudes, indicative of many more major deepwater hydrocarbon reservoirs"an ocean of oil yet to be found," in the words of one explorationist.
Angola's national oil company, Sociedade Nacional de Combustiveis de Angola (Sonangol), is the sole concessionaire for exploration and production, as established by the hydrocarbon law in 1978, thus associations with foreign companies are in the form of joint ventures (JVs), where investment costs and production are divided according to the party's share in the venture, and production sharing agreements (PSAs), in which the foreign partners act as contractors to Sonangol. The contractors finance all investment costs, and recover their investments when production begins. The PSAs commit partners to carry out exploration and development within a pre-determined time (usually three years for each phase).
By Dev George
For further information, contact: Sonangol (Sociedade Nacional de Combustiveis de Angola) 8-16 Av. 1 Congresse do MPLA, Luanda, Angola. Postal Address: CP 1316, Luanda, Angola. Tel: 244-2-332 440/334143/9, fax: 244-2-391 782.