Angola
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| Angola is the third largest crude oil producer in Africa behind Nigeria and almost equal to Libya. | Overview According to the Oil and Gas Journal (OGJ), Angola had proven oil reserves of 9.0 billion barrels (bbl) as of January 2008—up from 8.0 billion in 2007. The majority of the reserves are located in Angola’s offshore blocks, in part because onshore exploration was limited as a result of the civil war. However, there are some proven reserves onshore near the city of Soyo and, more notably, in the disputed Cabinda enclave.
 Angola’s crude oil production has grown considerably over the past decade. In 1997, crude oil production averaged 710,000 barrels per day (bbl/d). Production for 2007 averaged almost 1.7 million bbl/d and capacity is expected to reach more than 2 million bbl/d in 2008, as new deep-water production sites come online.
 Exports Angola exports more than 90% of its crude oil primarily to China and the US. In 2007, the United States imported approximately 496,000 bbl/d of crude oil from Angola (507,000 total oil imports), making it the sixth largest supplier of crude oil to the United States after Nigeria. For most of 2007, Angola was the second largest exporter of crude oil to China after Saudi Arabia—occasionally surpassing the kingdom. Monthly data indicates that China imported 650,000 bbl/d of Angolan crude in December 2007 (compared to US imports of 440,000 bbl/d for the same month). Other export destinations include Europe and Latin America, mainly Brazil—the fellow lusophone country is increasing political and economic links with Angola, specifically in the oil sector.
US and Chinese Imports of Crude and Products from Select African Countries
January – June 2007 (H1-07)
Sector Organization In 1976, the Angolan government created a national oil company (NOC) called the Sociedade Nacional de Combustiveis de Angola (Sonangol). In 1978, Sonangol became the sole concessionaire for oil exploration and production in Angola. Sonangol works with foreign companies through joint ventures (JVs) and production sharing agreements (PSAs), while funding its share of production through oil-backed borrowing. Major international oil companies (IOCs) operating in Angola include BP, Chevron, Eni, Total, ExxonMobil, Devon Energy, Maersk, Occidental, Roc Oil, and Statoil. China’s Sinopec is one of the newer international companies operating in Angola and is proving to be an important player in terms of development aid, oil backed loans and trade.
ProductionOil production in Angola is concentrated in numerous onshore and offshore blocks. The offshore blocks are divided into three bands; (band A) shallow water blocks 0-13; (band B) deepwater blocks 14-30; and (band C) ultra-deepwater blocks 31-40. Additional blocks are now being designated in the ultra-deepwater offshore lower Congo Basin, three of which are being offered in Angola’s current licensing round (see below).
Blocks 15 and Zero have been the most prolific offshore blocks. The majority of Angolan oil is medium to light crude (30 degrees – 40 degrees API) with low-sulfur content (0.12 percent - 0.14 percent).
Despite the expense of developing the deepwater and ultra-deepwater fields, Angolan oil production has grown rapidly over the past decade and will continue to do so in the short-term. Industry analysts (Wood Mackenzie/Petroleum Intelligence Weekly) estimate that at current reserve/production ratios, total production capacity will peak at around 2.5 million bbl/d in 2011, before slipping to 2.4 million bbl/d by 2013.
OnshoreOnshore exploration and production activities have mainly focused around the Cabinda Province and were halted during Angola’s civil war. The Cabinda province is home to separatist movements demanding access to oil revenues and greater participation in oil policy. While the government has appointed members to political positions, and security has improved, clashes still occur between the military and rebels in the area. Some existing wells that were drilled prior to the war and the neighboring Block Zero have proven to be extremely successful (see below). The current licensing round is offering three onshore blocks, Cabinda Centro in the Cabinda Province and two blocks in the onshore Kwanza Basin.
Block ZeroBlock Zero is located offshore Cabinda province and accounted for approximately 370,000 bbl/d of production in 2007. Cabinda Gulf Oil Company (CABGOC), a Chevron subsidiary and operator of Block Zero since 1955, has a 39.2 percent share in the JV. In May 2004, Sonangol and the Angolan government extended CABGOC’s contract, which was set to expire in 2010, to 2030. Other partners include Total and Eni. Block Zero’s largest producing oil fields are Takula (Area A), Numbi (Area A), and Kokongo (Area B).
In 2005, Chevron brought online the Sanha field gas complex and Bomboco oil field. Production from the fields, which includes oil condensate and liquefied petroleum gas (LPG), is estimated to have peaked at a combined total of 100,000 bbl/d in 2007.
Block 14In addition to Block Zero, CABGOC is the operator of deepwater Block 14 with 31 percent interest and is joined by partners Eni, Sonangol, Total and Petrogal. A total of ten discoveries have been made on the block with Kuito being the first in 1997. In January 2000, CABGOC announced full production (80,000 bbl/d) at its Kuito field, but current production levels have declined to an estimated 55,000 bbl/d. The quality of Kuito crude is poor when compared with other Angolan crudes and usually trades at a $5 per barrel discount.
In January 2006, CABGOC brought online the first phase of the Benguela, Belize, Lobito, Tomboco (BBLT) project. Oil production from BBLT is expected to peak at 200,000 bbl/d by 2008.
In June 2006, CABGOC brought online its Tombua/Landana joint development, with production expected to be onstream in 2009 and peak at 100,000 bbl/d by 2010. Additional fields still being evaluated include Gabela, Negage and Lucapa.
Block 15ExxonMobil is operator of Block 15, the largest producing deepwater block in Angola along with partners BP, Eni and StatoilHydro. Block 15 has estimated recoverable hydrocarbon reserves of 4.5 billion bbl, and at peak production, Block 15 is expected to exceed 800,000 bbl/d.
In 2003, ExxonMobil brought online Xikomba field, with estimated recoverable reserves of 100 million bbl. Production from Xikomba is currently 70,000 bbl/d.
In August 2004, the first of the Kizomba developments, four floating, production, storage and offloading (FPSO) facilities were brought online and are estimated to peak at a combined 750,000 bbl/d.
·The Kizomba-A project, which includes the Chocalho and Hungo fields, currently produces 250,000 bbl/d.
·The Kizomba-B project, brought online in 2005 includes the Dikanza and Kissanje fields. Kizomba-B contains an estimated one billion bbl of recoverable oil reserves and currently produces around 250,000 bbl/d.
·The Kizomba-C project, currently under development, will produce oil from the Batuque, Mondo and Saxi fields. Production at the Mondo field came onstream in January of 2008 and the other Kizomba C fields are expected onstream in mid-to-late 2008 with a combined peak of 200,000 bbl/d.
·The Kizomba-D fields are expected onstream after 2011 with a peak production capacity of 120,000 bbl/d. There is potential for added production from surrounding satellite fields expected onstream after 2010 that could produce an additional 125,000 bbl/d.
Block 17Total operates Block 17 with a 40 percent share, while Sonangol is its franchise holder. Other shareholders include ExxonMobil, BP, Statoil and Norsk Hydro.
In December 2001, Total brought online the Girassol oil field, an FPSO with a production capacity of 250,000 bbl/d. In 2003, the Jasmin satellite of Girassol came online and is helping to maintain current Girassol production levels. A second satellite, Rosa, came onstream in 2007 and will also help maintain production at Girassol.
In December 2006, Total brought online the 225,000 bbl/d Dalia field. Development of Dalia included a FPSO with a 240,000 bbl/d processing capacity and a 2-million-barrel storage capacity. Dalia’s recoverable reserves are estimated at 1 billion barrels.
Future projects on Block 17 include Pazflor, which will produce an estimated 200,000 bbl/d starting in 2010, and Clov, which will produce 150,000 bbl/d starting in 2011. By 2012, Total expects average production on Block 17 to be 850,000 bbl/d.
Block 18The Greater Plutonio field (BP operated) came online in 2007 at 100,000 bbl/d and is expected to reach peak production of 200,000 bbl/d by 2008. The field consists of six fields: Platina, Plutonio, Galio, Paladio, Cromio and Cobalto.
Exploration Licensing Rounds Success in offshore discoveries in Angola has led to increased interest in Angola’s exploration blocks. In August, 2007 Sonangol announced a new licensing round with 10 blocks on offer described below (click here to view Sonangol’s concession map):
Cabinda Central: located in the onshore Congo Basin. This block has been unexplored since the beginning of the civil war. According to the Petroleum Economist there is some uncertainty surrounding this block as it is licensed to a Devon Energy group but the license was frozen in force majeure until security improved. This block is adjacent to Chevron’s offshore Block Zero.
Kwanza Blocks 11 and 12: These blocks are located onshore in the Kwanza Basin South of Luanda.
Block 9: Located offshore in the Benguela Basin covering both shallow and deep waters.
Blocks 19, 20 and 21 are located in the deepwater Kwanza Basin.
Blocks 46, 47 and 48 are ultra-deepwater blocks, sometimes referred to as ultra-ultra-deep, reaching depths of approximately 8,200 feet (2,500 meters). Block 46 overlaps waters that are being contested by Congo-Brazzaville.
Refining and DownstreamDomestic oil consumption in 2007 was approximately 60,000 bbl/d. There is one refinery in Luanda, Fina Petroleos de Angola –a JV between Sonangol, Total and private investors. The refinery has a crude oil processing capacity of 39,000 bbl/d and produces some of Angola’s domestic product requirements. The remaining demand is met by imports of gasoline, jet fuel, kerosene, distillate fuel oil, LPG and other products.
Angola is developing plans for a new 200,000 bbl/d refinery, SonaRef, in the coastal city of Lobito. The $3.5 billion project was initially to be built in partnership with Sinopec but the Chinese company withdrew as a result of disagreements regarding the market for products—Sinopec wanted to supply China while Sonangol wants to sell the products domestically and to African markets. Sonangol is now proceeding with the SonaRef project and is expecting to begin construction in 2008 with refining to start by 2012. The new refinery will be able to process heavy crudes, such as those found in the Kuito and Dalia fields. Since the cessation of armed hostilities in 2002, the domestic demand for oil products is rising.
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