alrosa and licences effect on cvi, page-13

Another link that has updates.......explore....

http://www.mbendi.co.za/indy/oilg/ogus/af/an/p0005.htm




Angola - Oil and Gas: Crude Petroleum and Natural Gas Extraction
- Overview


Oil Exploration and Production

Crude oil production averaged 902,000 barrels per day (bbl/d) in 2003, and production is predicted to reach two million bbl/d by 2008 when new deep-water production sites are expected to operate at higher levels. Block Zero (Area A, Area B, and Area C), located offshore of Cabinda , accounts for more than half of Angola ’s crude oil production (approximately 550,000 bbl/d). In 2003, the United States imported more than 350,000 bbl/d of Angolan crude, nearly 5% of its total petroleum imports. Angola also exports crude oil to Asia , Europe , and Latin America.

The petroleum industry in Angola began in 1955 when oil was discovered in the onshore Kwanza (Cuanza) Valley by Petrofina, which, together with the Angolan government established the jointly-owned company, Fina Petroleos de Angola (Petrangol) and constructed a refinery at Luanda to process the oil. However, the main expansion of the country’s upstream oil industry came in the late 1960’s when the Cabinda Gulf Oil Company (CABGOC) discovered oil offshore the coastal enclave of Cabinda. In 1973 oil became Angola’s principal export and numerous subsequent discoveries made in the Cabinda area and in the Angolan offshore have ensured that Angola will play a major role in Africa’s oil industry for the next few decades.

Onshore production is centered in Kwanza near Luanda and in the Congo Basin near Soyo. Onshore facilities have been severely hit by the civil war, especially those in the region of Soyo. Billion dollar post war rehabilitation programmes have been instituted.

The national oil company Sociedade Nacional de Combustiveis de Angola (Sonangol) was established in 1976 to manage all fuel production and distribution. In the late 1970’s, the government initiated a programme to attract foreign oil companies. The Angolan coast, excluding Cabinda, was divided into 13 exploration blocks, which were leased to foreign companies under production sharing agreements. In 1978, the government authorised Sonangol to acquire a 51% interest in all oil companies operating in Angola, although the management of operations remained under the control of foreign companies.

At the beginning of 2000, there were 29 offshore and onshore blocks under licence. Thirty companies held licences in Angola and of these 14 were operators. Since 1990 over 200 exploration and appraisal wells have been drilled. Block 0 (areas A, B and C) with an average output of 600,000 bpd remains Angola’s largest crude oil producer, accounting for 70% of production.

The second largest producer is Block 3. The producing fields are Pacassa, Cobo/Pambi, Palanca and Oombo. Elf is operator and the other partners are Ajoco, Agip, Mitsubishi, Sonangol, INA-Naftaplin and Naftgas. Other producing blocks are Blocks 1, 2 and 4 operated by Agip and Texaco, Texaco and TotalFina and Ranger Oil respectively. Exploration is continuing on these blocks as well.

Energy Africa relinquished its lecence for Blocks 1 and 7 following unsuccessfull appraisal wells drilled in Blocks1, 7 and 9.

Cabinda Gulf Oil Company (CABGOC), a ChevronTexaco subsidiary and the operator of the Block Zero fields since 1955, has a 39.2% share in the JV. In May 2004, Sonangol and the Angolan government extended CABGOC’s current contract, set to expire in 2010, to 2030. Other partners include Sonangol (41%), Total (10%) and Agip/ENI (9.8%). Cabinda ’s largest producing oil fields are Takula (Area A), Numbi (Area A), and Kokongo (Area B). ChevronTexaco plans to invest $4 billion in Angolan development projects until 2008. Its Sanha oil field in Block Zero is expected to begin production in 2005, peaking at 100,000 bbl/d in 2007. A gas condensate facility to produce liquefied petroleum gas (LPG) is also slated to start production in 2005, reducing the flaring of gas in the region by 50%. In January 2005, ChevronTexaco announced its first oil from Block Zero’s Bomboco field. The company expects Bomboco to reach an average production of 30,000 bbl/d within the year.

ExxonMobil estimates that Block 15 contains 4.5 billion barrels of recoverable hydrocarbon oil equivalent. The $3.4 billion Kizomba-A project to develop the Hungo and Chocalho discoveries using an FPSO came online in August 2004 and is expected to have a peak production of 250,000 bbl/d. First oil from the Kizomba-B project, which will develop the Kissanje, Marimba, and Dikanza discoveries, is not expected before late 2005. Production for the fields is targeted to eventually reach 250,000 bbl/d each. ExxonMobil’s 80,000 bbl/d Xikomba deepwater field, also located in Block 15, is estimated to have recoverable reserves of 100 million barrels of oil. ExxonMobil announced initial production from the Xikomba field in December 2003. Sonangol is concessionaire of the block, while ExxonMobil holds a 40% interest, BP Exploration Angola Ltd has a 26.67% share, Italy ’s Agip Angola Exploration B.V. holds a 20% interest, and Norway ’s Den Norske Stats Oljeselskap holds the remaining 13.33%.

In May 2003, Total announced approval for development of Block 17’s offshore Dalia field. Development of Dalia will include an FPSO with a 240,000 bbl/d processing capacity and a 2 million barrel storage capacity. Dalia’s reserves are estimated at 1 billion barrels, and it is due onstream in late 2006 at an estimated cost of $3.4 billion.

In December 2003, Sonangol and Total announced the first production from the offshore Block 17 Jasmin Oil Field. Jasmin became the second oil field on Block 17 to announce production after oil began to flow from the Girassol oil field in December 2001. Total operates on Block 17 with a 40% share, while Sonangol is its franchise holder. Other shareholders include ExxonMobil (20%), BP Exploration Limited (16.67%), Statoil Angola Block 17 AS (13.33%), and Norway ’s Norsk Hydro (10%).

In August 2004, CABGOC awarded Vetco Gray (US) a $125 million contract for subsea equipment at Block 14’s Lobito-Tomboco project, set to begin production in 2007. In October 2004, ChevronTexaco announced that it would spend $7 billion in Angola ’s Block 14: $4 billion for Angola LNG; $2 billion for the Sanha gas and condensate program; and $1 billion to develop the Belize , Lobito , and Tomboco fields. The announcement follows a September 2004 statement in which ChevronTexaco pledged to invest $11 billion in Angola until 2008.

In February 2004, Sonangol approved BP’s plans to develop the Greater Plutonio project on Block 18. Five fields (Colbalto, Cromio, Galio, Paladio, Platina, and Plutonio) will be developed using a single FPSO. Scheduled to come online in 2007, the Greater Plutonio project is expected to produce over 200,000 bbl/d. Total cost of the project is estimated at between $2 and $3 billion. In June 2004, FMC Technologies (US) was awarded a $27 million contract for the provision of services at the Plutonio project. Three months later, BP announced an additional $80 million contract with FMC for the supply of subsea systems. BP maintains a 50% interest as the operator of Block 18.

In October 2004, Roc Oil and Sonangol announced the creation of a PSA for the onshore Cabina South Block. Roc maintains an 80% stake in the venture, while Sonangol holds the remaining 20%. Production is expected to commence in 2005.

In May 2005 Kerr-McGee Angola Ltd., a wholly owned affiliate of Kerr-McGee Oil & Gas Corp. signed an agreement with Sonangol to explore for hydrocarbons in Angola. The agreement gives Kerr-McGee a 25% contract interest in block 10, which is operated by Devon Energy Corp. with a 35% contract interest. Sonangol and affiliates retain a 40% contract interest. The block is located offshore the town of Lobito. It extends from the coastline to 30 miles offshore and covers approximately 1.2 million acres with water depths extending to approximately 3,300 feet (1,000 m).