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The Angolan government, led by President Joao Lourenco, have
made significant steps to support the future crude production of
the country, which has suffered severe losses during the last three
years. Up to 50 marginal fields will be tendered to foreign oil
companies by 2025, which could drive the crude output to revive yet
again. Earlier this week, details of a new licensing round were
announced, referring to a total of ten blocks. Nine of them in the
Namibe basin and one in the Benguela basin. Current production
stands at 1.42 million b/d, with oil still accounting for 95% of
the country's exports. Losses in the past couple of years have
reached 300 thousand b/d.
Among energy companies with activity in Angola, Total is
considered the country's top foreign operator, as it is expected to
operate around 40% of the local production in the next couple of
years. Under-investment in new projects has brought the country's
production to the lowest level in more than a decade. Total
produced an average of 275 thousand b/d last year, out of 1.48
million b/d of the entire production of Angola. But the company's
output could surpass 600 thousand b/d once all new projects become
operational. Last month, we've seen the first cargo of Mostarda
grade getting loaded from Kaombo Sul. This project has an estimated
production capacity of 230 thousand b/d, according to Total. Other
oil majors including Eni, BP, and Exxon Mobil have openly expressed
interest to increase their exposure to Angolan output.
Earlier this month, Eni revealed its fifth oil discovery deep
offshore Angola in Block 15/06, through the Agidigbo-1 NFW well,
with post drill analysis indicating between 300 and 400 million
barrels of light oil in place. Four more discoveries, Kalimba,
Afoxe, Agogo, and Ndungu, were announced in May. Altogether, they
refer to 1.8 billion barrels of light oil in place.
Angolan crude oil liftings so far in 2019 (Jan-May) by
destination, in thousand b/d
Focusing on seaborne exports of crude oil, based on data by IHS
Markit's Commodities at Sea, China seems to have absorbed most
of the Angolan output, with on average 880 thousand b/d loaded
between January and May 2019 with destination China. May's volumes
have been the highest levels observed so far this year, having
reached 974 thousand b/d. This was driven by the end of US sanction
waivers on Iranian barrels, which pressured several Chinese
companies to quickly find other alternatives.
Angola seems to have been preferable for other importers at a
similar situation. Liftings to India reached around 200 thousand
b/d during the last couple of months, much higher than the average
volumes loaded so far this year, which only stand at 116 thousand
b/d. Other importers across SE Asia have increased their volumes as
well, while there has been a decline observed in flows to European
destinations, such as Spain. Overall, Angolan exports have been
recovering since March, when they reached the lowest at least since
late 2016. Liftings surpassed 1.5 million b/d for the first time
since November 2018.
Posted 12 June 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade
