Angolan pre-salt discoveries encourage oil companies and authorities

13 February 2012

Luanda, Angola, 13 Feb – The potential of Angola’s pre-salt layer, where two major discoveries have already been reported, is encouraging the government and oil companies operating in the country, as they may signify an increase in confirmed reserves.

The announcement that oil was discovered at the Azul-1 exploratory well in Kwanza Basin deepwater bloc 23 “gives extra encouragement to oil companies to increase efforts to exploit the pre-salt layer”, the Economist Intelligence Unit states in its latest report on Angola.

Cobalt International Energy, whose main shareholder is Goldman Sachs, confirmed on Friday the existence of large quantities of petroleum in Bloc 21, with preliminary results indicating a production capacity of nearly 20,000 barrels of oil per day.

“The Cameia well is an extraordinary success. The results are beyond our pre-drill expectations and have increased our confidence in the entire pre-salt exploration inventory in West Africa,” Cobalt president Joseph Bryant said in the statement announcing the discovery.

The technical difficulties of operating at the pre-salt layer’s great depth mean that reserves must be bigger than to ensure profitable production.

The discovery in bloc 23, operated by Denmark’s Maersk Oil, the first in pre-salt, was done at a depth of 5,334 metres.

According to the EIU, the potential is 3,000 barrels of oil per day. The operator has indicated that it will continue evaluating the discovery and extending exploration efforts.

After almost a year of negotiations, the state concessionaire Sonangol last December signed 11 contracts to share pre-salt production in the offshore Kwanza Basin.

North American BP was assigned blocs 19 and 24, North American Cobalt bloc 20 and Spanish Repsol bloc 22, while France’s Total was given blocs 25 and 40.

Bloc 35 went to Italy’s ENI, 36 and 37 to ConocoPhilips, and 38 and 39 to Statoil.

Parallel to this process, Brazilian oil group Petrobras will in 2012 begin drill prospecting in bloc 26 of Angolan pre-salt in the Benguela Basin.

BP executive president Bob Dudley recently said he was convinced that “pre-salt in the Benguela and Kwanza basins has the potential to increase the life of Angola’s oil industry from 20 years to half a century,” according to a report in the Angolan economic newspaper Expansão.

In 2010 Angola produced an average of 1.9 million barrels of oil per day. But in 2011 problems in various blocs resulted in production of an average of 1.65 to 1.7 million barrels per day.

This year production should recover to 1.85 million barrels a day, a trend which should continue in coming years as new fields start producing.

By 2014 Angola’s production level should reach 2 million barrels a day.

“In the long term, if the pre-salt reserves prove to be at a level comparable to those in Brazil, Angola’s oil production will probably overtake Nigeria on a sustained basis, raising the country’s position to that of Africa’s biggest oil exporter,” the EIU asserts. (macauhub)