Angola is set to sign an exclusive oil exploration agreement with Shell next week, marking what the country’s oil and gas agency ANPG describes as “a historic moment for the Angolan oil sector.” The deal will see the supermajor explore and potentially develop Blocks 19, 34, and 35, along with several ultra-deepwater blocks off the Angolan coast.
This significant agreement comes as Angola seeks to revitalize its exploration and production sector following years of underinvestment and supply restrictions under OPEC deals. The country, which quit the cartel effective January 2024 after a 16-year membership, is now betting big on natural gas developments to monetize more of its fossil fuel resources.
Angola’s exit from OPEC was triggered by disputes over production quotas. At a mid-2023 meeting, Angola and Nigeria were assigned lower crude oil production quotas after years of underperformance due to lack of investment in new fields and aging oilfields. Earlier this year, Angola’s crude output slipped below 1 million barrels per day for the first time in two and a half years.
Shell’s Chief Executive Wael Sawan has been vocal about boosting exploration efforts, particularly in Africa where the company has made discoveries offshore Namibia. Speaking on the Q2 earnings call in July, Sawan acknowledged that Shell’s exploration department underwent a significant reset, stating that while there had been progress in certain areas, results hadn’t met expectations. The company will continue investing in exploration where it has established track records, including the Gulf of Mexico, Malaysia, Oman, and new areas like Namibia.
Source: Oilprice.com via Reuters