Angola's steep decline in crude production over the past three years has been tough to ignore. The government led by President Joao Lourenco has unearthed a plan that includes tendering as many as 50 marginal fields to foreign oil companies in a bid to revive its crude output.
On Tuesday, the newly created National Oil, Gas and Biofuels Agency (ANPG), which is responsible for all upstream concessions in the country, announced the details of its new licensing round, including a total of 10 blocks.
ANPG President Paulino Jeronimo, speaking at the Angola Oil and Gas conference in Luanda, said nine blocks will be offered in the Namibe basin, with one bock in the Benguela basin.
This round is aimed at ensuring "the replacement of reserves and the promotion of exploration activity," Jeronimo said.
Foreign oil companies have until October 2 to study the block and bids can be submitted up to 40 days after that date, he added.
The government plans to award a total of 50 blocks from 2019 to 2025 and these will be awarded on Public Tender, Restricted Public Tender and Direct Negotiation basis.
Jeronimo said that, as of May 23, Angola was producing 1.415 million b/d, which included a potential loss of 169,000 b/d in the past few years due to unplanned stoppages.
DRAMATIC DECLINE
Oil output -- which accounts for 95% of exports -- has fallen by more than 300,000 b/d in the past two years. Production has been around 1.43 million b/d so far this year, according to S&P Global Platts estimates, due to technical and operational problems at some of the country's fields.
Angola has found it very tough to turn the tide. The government had to significantly change the fiscal terms for some of its oil contracts, giving international oil companies sweeter returns than had been the case previously.
Angola desperately needs more exploration, including more activity in marginal fields, to tackle the dramatic fall in production.
As a result, the government has also started offering tax breaks to encourage companies to link existing marginal discoveries to operating production platforms.
Interest has been revived, however, partly by fiscal changes, and industry sentiment has got a boost from the start of production from the Kaombo field, operated by Total, in July. But despite that, output has fallen steadily due to steeper declines in production at mature fields.
