Sonangol to bring forward next oil licensing round – report

26 June 2006

Lisbon, Portugal, 26 June – Angolan state oil company Sonangol will bring forward the next award of oil exploration rights, originally scheduled for December, according to a report from the BPI bank.

In its latest economic report on Angola, the Portuguese bank says the licensing round is being brought forward due to the high market price of oil, which has led to a record number of bids for oil block auctions launched earlier this year.

BPI notes “the major euphoria surrounding the results of the awarding of the remaining areas in Block 15”, with a record offer of US$ 902 million by Eni, and, in the licensing round last month, a bid of over US$ 2 billion from the Sinopec-Sonangol consortium for the remaining areas of Blocks 17 and 18.

BPI analyst Pedro Ferreira da Silva says that Angola has overtaken Saudi Arabia as China’s main oil supplier after exporting nearly 456 barrels of oil per day in the first two months of the year, representing some 15 percent of Beijing’s total crude imports.

Relations between Angola and China in the area of oil “go beyond the level of the trade balance” to include a refinery project. The second largest oil producer in Africa south of the Sahara is also taking steps do develop partnerships with other countries in the energy sector, adds the report.

In addition to a joint venture between Sonangol and an Indian oil company, the Luanda government has unveiled plans to foster tighter cooperation with South Africa and Cuba, with the objective of lessening its dependence on oil export markets in Europe and the United States.

“As happens in other oil producing countries, Angola will have to prepare for the fact that climbing in oil prices are encouraging industrialized economies to reopen investment programs in alternative sources of energy. This impact will be more strongly felt in economies with a bigger dependency on oil receipts, as is the case in Angola”, the report adds. (macauhub)