Search results

Sonangol and Cobalt Energy on 22 August signed a sale and purchase agreement for Sonangol to acquire all of Cobalt’s 40% participating interest in Blocks 21/09 and 20/11 for $1.75bn. The blocks contain five discoveries, and a final investment decision on the Cameia development is due by year-end.Cobalt said in February it was seeking to revise the development plan for Cameia to cut costs and planned to sell part of its holding.

Angola’s government is running short of money just as the issue of who might succeed President José Eduardo dos Santos again comes under discussion. The president raised eyebrows in early July when he said he intended to see out his term of office, and there has been increased repression of government opponents. At the same time, a leaked memo from Sonangol chairman Francisco de Lemos José Maria has sharply criticised the legacy of his predecessor Manuel Vicente, now Angolan vice-president, and spelled out the problems facing the company.

Italian export credit agency Sace has signed a new co-operation agreement with the Ministry of Finance and finalised a E200m ($217m) credit line with national oil company Sonangol. The co-operation accord was signed by Sace head Alessandro Castellano and finance minister Armando Manuel. The agreement was witnessed by Italian Prime Minister Matteo Renzi and President José Eduardo Dos Santos, during the Angolan leader’s early July visit to Italy.

The Ministry of Energy and Water has given a consortium led by China Gezhouba Group Corporation (CGGC) an engineering, procurement and construction contract to build the 2,171MW Caculo Cabaça hydropower project, the Chinese construction and engineering company announced on 11 June. The contract, valued at $4.53bn, will include civil works as well as the supply, installation and commissioning of hydromechanical and electromechanical equipment, it said. Work is to be completed within 80 months. CGGC said the government would need to make a loan application to Chinese banks to arrange financing for the project.

President José Eduardo dos Santos’ billionaire elder daughter Isabel has added to her portfolio with a controlling stake in Portuguese engineering company Efacec, ten years after she bought 38.3% in Portugal’s Galp Energia in partnership with Portuguese businessman Américo Amorim. Isabel dos Santos, whose fortune was estimated at $3bn last year by Forbes magazine, established the 50/50 Winterfell joint venture with the recently created Empresa Nacional de Distribuição de Electricidade (ENDE) in order to purchase foreign assets. Isabel dos Santos and Winterfell bought a 65% stake in Efacec Power Solutions at the beginning of June from two Portuguese companies, Grupo José de Mello SGPS and Têxtil Manuel Gonçalves.

A 120MW bioethanol power plant being developed by Odebrecht and a Singapore-based company owned by a close associate of President José Eduardo dos Santos is expected to start up this month. On 25 May, Companhia de Bioenergia de Angola (Biocom) institutional relations director Luis Bagorro told industry minister Bernarda Martins that the Cacuso ethanol power plant on a sugar estate in Malanje Province was expected to start operations on 16 June.

Ocean Rig has secured a new contract with Eni for the drillship Ocean Rig Olympia to drill offshore Angola starting in Q3 2015 for a minimum of eight months, with a total contract backlog of about $91m. Eni has also extended a contract for the drillship Ocean Rig Poseidon for a further year until Q2 2017, with total contract backlog now standing at about $367m.

Puma Energy, whose largest shareholder is Trafigura, has opened one of the world’s largest conventional buoy mooring (CBM) systems in Luanda bay. The fuel loading buoy anchored offshore will allow carriers to berth while loading or offloading oil products. The CBM is located next to Puma Energy’s Fishing Port Terminal in the bay, which is being extended, and will have a total storage capacity of 276,000m3.

ConocoPhillips has had another disappointment in the Kwanza Basin with the Omosi-1 well on Block 37. The company said the well had been drilled to 6,300 metres total depth and had encountered a 160 metre gas column. No further activity is planned, and the well has been plugged and abandoned. After Cobalt’s big Cameia discovery on Block 21 in February 2012 and Maersk’s smaller 2011 Azul find on Block 23, there were high hopes for the Kwanza Basin. Angola had hoped the pre-salt play would deliver the same success as on the other side of the Atlantic, but it has not been an unqualified success.

Vaalco Energy’s first exploration well in Block 5 has found a water-bearing reservoir and will be plugged and abandoned. The Kindele-1 well was drilled to a total depth of 1,829 metres, targeting the Mucanzo sand formation in the Pinda Group section.“We are disappointed with the outcome of this first well drilled offshore Angola. The well targeted a three-way fault closure where the fault appears to have not provided the required lateral seal. The Mucanzo target sands were present and of a very high quality.

A commercial agreement on the joint exploitation of hydrocarbons between Angolan national oil company Sonangol and its Congolese equivalent, Cohydro, has sparked controversy in Kinshasa. Key provisions within the agreement remain unclear, and there are fears the deal will reduce Democratic Republic of Congo’s access to potential offshore reserves. The Angolan and Congolese authorities first agreed to look for ways to jointly explore for oil and gas in the Zone d’Intérêt Commun, a 10km offshore corridor covering Angolan blocks 1, 14, 15 and 31, in 2007. But given DRC’s limited access to the sea, and Angola’s determination to maximise its own access to potential oil fields, the stakes have been high and progress has been commensurately slow.

Houston-based Vaalco Energy announced on 2 March it had spudded the post-salt Kindele-1 well, the company’s first on Block 5. The well will test a fault block adjacent to Conoco’s 1988 Mubafo discovery, which tested oil from the oil from the Mucanzo sand section within the Pinda formations. The well is being drilled by the Transocean Celtic Sea semi-submersible rig and is expected to take six weeks. Kindele-1 will be drilled to 1,800 metres to evaluate the Mucanzo sand section, then deepened to 2,250 metres for geological and geophysical correlation.

The government has appointed boards for the new power companies formed late last year to replace Empresa Nacional de Electricidade (ENE) and Empresa de Distribuição de Electricidade de Luanda, enabling them to start work in earnest. A cabinet meeting on 6 February approved the appointments, which will pave the way for hoped-for private investment in the sector. The Empresa Nacional de Produção de Electricidade (Prodel) generation company will be headed by António Fernandes Rodrigues Belsa da Costa, former board chairman of state water company Empresa Pública da Aguas (Epal), while former ENE directors Euclides Morais de Brito and Júlio Capitango will be in charge of thermal generation and hydropower, respectively.

Wide-ranging reform of Angola’s power sector is making progress, but with the economy heavily dependent on oil revenues, investment plans could be significantly slowed. Angola-watchers suggest the effects on the domestic economy of sharply lower global oil prices, coupled with the continued uncertainty over veteran President José Eduardo dos Santos’ succession plans, may create a ‘perfect storm’ that could hasten the long-awaited regime change.

Eni announced first oil on 8 December from the West Hub Development Project in Block 15/06. The field is producing 45,000 b/d through the N’Goma floating production, storage and offloading (FPSO) vessel, and will increase production to 100,000 b/d in the coming months. The start-up of the East Hub Development, expected in 2017, will raise overall production from Block 15/06 to 200,000 b/d. Eni was awarded the block in a licensing round in 2006, and has drilled 24 exploration and appraisal wells, discovering over 3bn barrels of oil in place and 850m barrels of recoverable reserves.