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ANPG to Increase Oil Production

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The Angolan National Petroleum and Gas Agency (ANPG) is boosting the country’s oil industry with an array of measures aimed at increasing production, improving efficiency and expanding reserves.

According to its Administrative Council President, Paulino Jerónimo, the agency will auction 50 new oil and gas blocks between 2019 and 2025. The first 10 were auctioned last year, nine in the Namibe basin and one in the Benguela basin and have potential reserves of up to 7 billion barrels of oil equivalent, according to the agency. Before 2019, Angola’s last bidding round took place in 2011, which has limited opportunities for new discoveries.

Since it was created a year ago, the ANPG has hit the gas on investment promotion in the sector. In January, the agency stated it had already awarded three blocks from the 2019 bid round, with block 27 going to Sonangol, block 28 being taken by an Eni-led consortium and block 29 being awarded to a Total-led consortium.

Furthermore, in the past months, ANPG announced a number of new agreements that should help increase production in the medium-term. It recently agreed on an extension for ExxonMobil’s license over block 15, one of Angola’s most proliferous, an agreement that will also see Sonangol coming in as a partner of the project. A few days earlier, the agency signed an accord with BP to extend exploration rights in block 18, where the company is already producing.

In the coming years, these agreements will certainly yield positive results, but for the most immediate term, Angola’s Ministry of Mineral Resources and Petroleum (MIREMPET) is focusing on a more directly manageable issue: unplanned production stops due to equipment malfunction and lack of maintenance. According to Jerónimo, unscheduled stops cut the country’s daily oil output buy as much as 90 thousand barrels per day. He announced that the agency has pledged to reduce that figure by 50%.

Addressing maintenance and efficiency issues will go a long way in stopping production decline, but other factors might also be of help in the short term. According to recent reports, the key Angolan Girassol grade just returned from maintenance, which will reinforce output. Eni has also announced that its Agogo field, which had a 9-month discovery-to-production process, has come online at 10 thousand barrels per day and is expected to double that figure in the coming weeks. Total’s Kaombo Sul, which started production in April 2019, is also expected to help the country maintain output as its production capacity ramps up.

As part of its wider strategy, ANPG is also promoting marginal field development, a strategy adopted from Nigeria, that is designed to take advantage of smaller discoveries that are viable for smaller indigenous companies. Fiscal and contractual incentives are expected to greatly promote the development of such discoveries made and never developed, over the last decades.

Licenses for the exploration in the Lifua, N’Dola Sul, Kambala and 83N marginal fields in block 0, operated by Chevron, as well as in the Palas, Astraea and Juno marginal fields in Block 31, have already been approved and operator BP wants to have them online by 2022. The ANPG estimates that as many as 3 billion barrels of oil could be produced from marginal fields in Angola.

These are fundamental efforts that align with Angola’s President, H.E. João Manuel Lourenço’s ‘Angola: African Investment Capital 2020’ campaign, aimed at reopening the Angolan economy to foreign investment. The combination of MIREMPET’s efforts and the comprehensive legal and fiscal reforms already under implementation have already impacted the forecasts of some analysts, with Standard Bank setting a 1.4% GDP growth target for the Angolan economy in 2020, based on the expectation that oil production will grow by as much as 5.6%.

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Energy Capital & Power

Energy Capital & Power

Energy Capital & Power is the African continent’s leading investment platform for the energy sector. Through a series of events, online content and investment reports, we unite the entire energy value chain – from oil and gas exploration to renewable power – and facilitate global and intra-African investment and collaboration.