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Oil exploration and production agreements in Angola’s different petroleum blocks are structured according to a system that was established by the government more than 20 years ago.

Angola’s national oil company, Sonangol, was founded in 1976, and a hydrocarbon law was passed in 1978 making the company the sole concessionaire for exploration and production in the country. From this base, associations with foreign companies are in the form of joint ventures or production sharing agreements (PSA).

In addition, in each of the country’s petroleum blocks there is a main operator, as well as a group of equity partners who share in the cost of the initial signature bonus to procure the block, and later contribute to development costs. As the field becomes active and produces oil, profits are divided according to the equity stakes.

A bright future with major firms Esso, Sonangol, TOTAL, NIR Angola, and Petrogal

This setup has contributed to the successful development of smaller privately owned Angolan oil firms and their partnerships with larger international players in the country’s oil sector.

Falcon Oil is one such company. Granted a PSA in 1999 for the development of Block 33, in conjunction with Exxon Mobil’s subsidiary Esso, Falcon Oil retains a 10% equity share of the field.

Esso is the head operator for the ultra deepwater block with a 45% share, and its other partners are Sonangol (20%), TOTAL (15%), NIR Angola (5%), and Petrogal (5%).


ANTÓNIO MOSQUITO
CEO of Falcon Oil and President of Grupo António Mosquito (GAM)
Although initial explorations have come up dry in the block, the companies are reconsidering their exploration strategies in the region. The first well was drilled on geological targets that were very large, but that had a relatively low chance of finding oil. The license for Block 33, however, also contains geological structures whose seismic images show "flat spots", indicating that prospects for future discoveries are promising.

Falcon Oil Holdings is currently the only wholly private African oil company and intends to go public in the medium term. It is part of the António Mosquito Group (GAM). Mr. António Mosquito, founder and president of the Group, is an Angolan success story. An entrepreneurial prodigy, Mr. Mosquito overcame his humble origins in a village in the central province of Huambo, where he was involved in his family’s small business, to single-handedly build what is today one of the most important private groups in Angola.