Shell inks return to Angola, signing an exploration and development agreement for 17 blocks in ultra-deep waters with an initial investment of 860.5 million euros (US$987.81 million), reports Lusa.
Jerónimo Paulino, president of Angola’s national oil and gas agency ANPG, celebrated the “grand return” of Shell after a 20-year absence. The company will operate Blocks 19, 34 and 35, in the ultra-deep waters of the Kwanza Basin, and a further 14 blocks scattered across the Kwanza and lower Congo basins, in a consortium that includes Norwegian giant Equinor and Angolan state-owned Sonangol EP. Paulino noted a separate deal in September, in which ANPG, Sonangol, Chevron and Shell agreed to partner on Block 33.
Attracting the multinational back to Angola’s shores, Paulino explained, will help the country maintain production level above 1 million barrels per day. Meeting that quota has been a struggle, making the addition of new productive fields essential.
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“New discoveries are needed to continue to maintain this level and possibly achieve growth, which is why we continue to award concessions for exploration activities, as was the case with these 17 blocks awarded to Shell,” he stressed. Paulino noted that other companies already operating in Angola have also expressed interest in new investments. Negotiations are underway with a new consortium for three new blocks in the Namibe Basin, Angola’s southernmost pre-salt basin, and with other companies interested in the free area of two concessions.
Shell’s new holdings are in the Lower Congo Basin, the northernmost, and the neighbouring Kwanza Basin. These ultra-deep water pre-salt reserves are especially expensive to drill, buried beneath thousands of metres of sediments and salt, as well as 2,000–3,000 metres of ocean water. Experienced operators like Shell can more effectively navigate such challenging conditions while keeping costs down. Paulino told press at the signing that a detailed assessment of the 17 concessions granted to Shell is expected to be carried out in the coming years.
Angolan Minister for Mineral Resources, Oil and Gas Diamantino Azevedo expressed hope that “all the effort and investments that will be made in the prospecting phase will bring results and can then move on to the development and production phase”.
“This is the beginning of more prospecting activity in the country”, Azevedo emphasised, noting that Angola still has “potential for oil exploration and that is important for us to combat the decline in oil production.”
