Angolan national oil company Sonangol has taken the helm of the Forum of the African National Oil Companies within the African Petroleum Producers’ Organization (APPO). The appointment took place last week in Luanda during a meeting of the CEOs of the African NOCs.
 
A central topic of last week’s meeting was the urgency of Africa chartering its own course in terms of energy transition and developing independent sources of financing for oil and gas projects in the continent. Western nations and banks have been significantly scaling down funding for hydrocarbon exploration in Africa and across the world and this poses an existential challenge to the long term survival of Africa’s oil industry. Against this threat, the NOC CEOs reaffirmed their commitment to support the establishment of a Pan-African bank (designated as “Africa Energy Transition Bank”) dedicated to provide critical financing for oil and gas projects in Africa. The new bank is to be set up as a joint effort of APPO and the African Export Bank (Afreximbank), and the African NOCs, including Sonangol, are expected to contribute financially to this initiative in terms to be decided.
 
This is a critical time for Africa’s oil and gas industry and the stakes could not be higher for Sonangol’s leadership of the NOC Forum.

Angola is meticulously implementing its strategy of attracting new companies to its oil sector and is using the licensing of new blocks in unexplored areas to pursue this goal. Last August a total of 7 new companies (which hitherto had no activity in Angola’s E&P landscape) signed contracts for the exploration of onshore oil blocks in the basins of the Congo and Kwanza rivers. These comprise a mix of international independent companies and local companies, of which 3 will become operators. The Angolan concessionaire and regulator ANPG signed contracts with newcomers MTI Energy, Mineral One, Alfort Petroleum, Intank Oil, Brite’s Oil & Gas, Monka Oil, Omega Risk Solutions and Upite Oil Company, together with other companies with an established presence in Angola’s oil sector. The number of companies with Angolan E&P assets has now surpassed 30.

Angola’s oil output is currently hovering above 1.1 million barrels per day, which puts it neck to neck with Nigeria as the largest producer in sub-Shaharan Africa. The government is hoping successful exploration and development of the new blocks will increase this output.

After a few years of relative calm, M&A activity in the Angolan oil industry is picking up steam. In recent weeks, a number of deals have been announced involving international oil companies (IOCs), small independents and local players. One of the most significant transactions was the acquisition by Angolan independent Somoil of a 20% interest in Block 14 held by TotalEnergies jointly with Inpex. The sale was approved by the Angolan Ministry of Mineral Resources and Petroleum through Executive Decree 424/22, of September 8th, 2022. Operated by Chevron, Block 14 has mature fields which have been producing since 1999 with a present output of around 45.000 barrels per day. Somoil is the biggest and most active Angolan homegrown upstream operator with a portolio of stakes in 14 operated and non-operated blocks.
 
Meanwhile London-listed Afentra is in the process of purchasing from Croatian INA – Industrija Nafte a 4% interest in Block 3/05 and a 5.33% interest in Block 3/05A, both operated by Sonangol P&P. These transactions will build upon the earlier (April 2022) acquisition of a 20% interest in Block 3/05 from Sonangol, which will take Afentra’s combined interest in the Block to 24%. The acquisitions are still subject to Angolan regulatory approval, which Afentra expects to occur before the end of the year. Block 3/05 production is currently sitting at just under 20.000 barrels per day but has material growth potential.
 
Concurrently with Afentra’s acquisitions it is anticipated that the Block 3/05 and 3/05A licenses will be extended to 2040 by the Angolan government under improved commercial and fiscal terms to stimulate investment and boost production. These blocks represent Afentra’s first foray into Angola.
 
Finally, the Angolan petroleum regulator ANPG has just announced that Block 33/21 is available to be awarded by direct negotiation following an expression of interest submitted by the joint venture T-North Trading and Brubell Investimentos. Other interested companies are invited by ANPG to apply for this block (as operator or non-operator) until the end of September. Block 33/21 is located in offshore Lower Congo Basin.