Angola’s upstream market has become ever-more attractive with the introduction of its six-year licensing round, the establishment of the National Agency for Oil, Gas and Biofuels and the government’s ongoing commitment to accelerating exploration and production across the country.
In addition to the significant untapped resources present, Angola’s upstream market’s value has been made even more clear with the suite of merger & acquisition (M&A) activity witnessed in 2022.
A recent report by global market intelligence platform, Rystad Energy – and knowledge partner of the upcoming Angola Oil & Gas (AOG) 2022 conference taking place in Luanda from November 29 to December 1 -, stated that Angola has been responsible for approximately 70% of Africa’s M&A activity in 2022, with deals to the tune of $15 billion out of the continent’s total $21 billion announced in the country. Most of this activity was driven by the merger of global energy majors’ Eni and bp’s Angola operations, leading to the creation of Azule Energy, and the divestment of national oil company Sonangol’s assets.
For its part, the Eni-bp merger equated to $14 billion, with the both companies now well positioned to integrate their knowledge and expertise to maximize the potential of assets such as Block 15/06, Block 31, the Northern Gas Complex (NGC) and the Angola Liquefied Natural Gas joint venture. According to Rystad, soon after the merger was announced, a final investment decision was announced by Eni on NGC while projects such as Sanah Lean Gas, CLOV Phase 3 and NGC are currently under development and expected to commence production in the short term.
Meanwhile, as part of Sonangol’s divestment strategy, a significant amount of offshore acreage has come up for sale by the NOC with three separate deals announced this year. Rystad Energy reports that Sonangol has divested partial stakes in some of its Angolan portfolio for $766 million with deals including the sale of a 20% non-operated interest in Block 3/05 for $80 million and contingent payments of up to $50 million, and a 40% interest in Block 23 for $500,000 to independent oil and gas company Afentra. Additionally, Sonangol sold participating interests of 8.28% and 10%, respectively, in producing Blocks 18 and 31, as well as a 31% participating interest in exploration Block 27 to a joint venture of Sirius Petroleum and SOMOIL. Finally, Sonangol sold a 10% interest in Block 15/06 and a 35% share in Block 27 to Sungara Energies – a joint venture between Namcor, Sequa Petroleum and Petrolog.
However, these deals represent just the start of Angola’s M&A activity with a host of new agreements expected to be signed in the following months owing to both Sonangol’s divestment strategy and Angola’s high potential upstream market. In this regard, during the third edition of AOG, the state of play of Angola’s upstream sector will be brought to the fore, with insight into ongoing M&A activity shared with regional and global stakeholders alike. Through a series of upstream focused panel discussions and workshops, the event aims to showcase the significant opportunities present across the market while introducing potential players directly to Angolan opportunities.
While the country has driven African upstream M&A with deals equating to $15 billion in 2022, a large portion of the country’s 8.5 billion barrels of oil and 11 trillion cubic feet of proven natural gas reserves remain largely untapped, and with the country’s established enabling environment and Sonangol’s willingness to partner and collaborate, investing in the country has never been easier and more rewarding.
For more information about the M&A opportunities in Angola, join us at AOG 2022 in Luanda and meet the players driving this activity in 2022 and beyond.