Angolan concessionaire estimates investments of US$200 million to drill the first well in Namibe basin

Today, the ANPG – Angolan National Agency for Oil, Gas, and Biofuels estimated investments of US$200 million to drill the first exploration well in the Namibe basin, starting in 2024.

For drilling the first exploration well in the unexplored Namibe basin, ANPG, the Angolan state company Sonangol and ExxonMobil (US) signed today in Luanda a memorandum of understanding for blocks 30, 44, and 45 of the Namibe basin.

The chairman of the board of ANPG, Paulino Jerónimo, the president of the executive committee of Sonangol Pesquisa & Produção, Ricardo Van-Deste, and the general director of ExxonMobil in Angola, Melissa Bond, were the signatories of the agreement.

According to Paulino Jerónimo, the conclusion of the memorandum, the result of the negotiated terms, foresees considerable benefits for all parties involved.

Investments estimated at US$200 million for studies and the drilling of the first exploration well in 2024 are among the forecasts of the Angolan authorities, who also estimate investments of US$15 billion for evaluating and developing the large-scale discovery.

“Production is expected to begin by 2030, contributing to the reversal of the decline in production, the replacement of reserves, and the creation of new jobs in the region,” Paulino Jerónimo pointed out.

The revenue estimated by the Angolan state “from the development of a single large commercial discovery may vary between US$20 billion and US$40 billion,” considering “the conservative analysis price that varies between US$50 and US$60/barrel,” he noted.

Paulino Jerónimo recalled, in his intervention, that the signing of the memorandum results from the celebration of “service contracts with risk”, between the signatories, for blocks 30, 44, and 45, with an effective date of November 1, 2020.

For, he added, the execution of petroleum operations, having a consortium made up of Exxonmobil (60%) and Sonangol Pesquisa & Produção (40%), after “seismic evaluation and definition of the prospects.”

ANGP and the consortium of blocks agreed to make the current contractual and fiscal terms, he noted, “to better reflect the risk inherent to the exploration in the blocks” and “to guarantee the necessary financing for drilling the first exploration well in the Namibe basin.

“The drilling of the first well in the Namibe basin will allow us to expand the geological knowledge and the petroleum potential of the country in strict alignment with the objectives defined in the General Strategy of Concession Production,” stressed the president of ANPG.

“If successful, the drilling will help us continue to mitigate the decline in production and reserves that our country has faced in recent years,” he admitted.

Melissa Bond, ExxonMobil’s general manager in Angola, recalled that nothing has yet been discovered in the Namibe frontier basin, assuming it is a risky basin but one that could gain new impetus in the event of a commercial discovery.

“It is an inherently risky basin, but we truly believe that if we combine our cutting-edge technology to our ability to execute and materialize the projects, we as a company can make the Namibe happen in case of a commercial discovery,” he noted.

And the Minister of Mineral Resources, Oil and Gas of Angola, Diamantino Azevedo, stressed the moment’s importance, noting that it is part of the “necessary actions” for the country to maintain “certain stability in oil production.

“So that we can continue to explore this important mineral resource for some more time and, also, so that this mineral resource, in this moment of the energy transition, continues to demonstrate its importance for the development of our country, for the improvement of the quality of life of our population,” he pointed out.

With information from Lusa