Shell returning ‘bigger and better’ to offshore Angola

Backed by an overhauled regulatory regime, Angola is attracting billions of dollars of new investment from oil majors in the country’s offshore oil and gas sector to boost its dwindling production. In the latest deal, the country’s oil and gas regulator announced the signing of an exclusive agreement with Shell and consortium partners, Equinor and Nigerian state oil company Sonangol that will see the potential exploration of 17 offshore blocks, almost all in ultra-deepwater areas.

The major deal was signed with the National Agency for Petroleum, Gas and Biofuels (ANPG), the country’s oil and gas regulator in a ceremony on 3 November.

The agreement covers Blocks 19, 34 and 35 located in deep waters of the Kwanza Basin, and 14 blocks located in ultra-deep waters of the Lower Congo and Kwanza Basins.

Regulatory changes enacted in 2024 provide tax incentives, lowering the country’s petroleum production tax and income tax, as well as lowering financial risk by making all exploration well costs deductible regardless of success.

Shell plans to spend US$1Bn for seismic surveys and drilling the new blocks, ANPG chairman, Paulino Jerónimo told Bloomberg.

This most recent agreement by Shell follows one it signed with ANPG in September to develop Block 33 along with Chevron and Sonangol in the Lower Congo Basin.

Mr Jerónimo, Shell executive vice president, strategy and portfolio, integrated gas and upstream, Eugene Okpere, Equinor general director, Angola, Ane Aubert, and, Sonangol E&P, chairman, Ricardo Van-Deste, and executive committee member, Walter Nascimento were on hand for the signing ceremony.

“We are proud to collaborate with Shell, Equinor and Sonangol E&P to unlock the potential of these offshore blocks and generate sustainable value for the country. It is with great satisfaction that we welcome Shell back as an operator in Angola, after a period of 20 years,” declared Mr Jerónimo.

Mr Okpere said: “Angola has great potential, and we are eager to bring our capacity to transform natural resources. Shell, in particular, has been absent from the country for 20 years; we are now returning bigger and better.”

Shell joins TotalEnergies, Chevron, Equinor and ExxonMobil as developers in Angola, the second largest sub-Saharan oil producer after Nigeria. About 75% of the country’s oil is produced from offshore fields.

“We are now returning bigger and better”

Equinor is a partner in three offshore producing blocks in the Congo Basin on the Angolan continental shelf, with an equity production of around 110,000 bbl of oil equivalent per day (bopd). Earlier this year, the Norwegian oil major, along with TotalEnergies, signed an agreement with ANGP, amending its production sharing agreement for Block 17, Dalia Development Area, which should extend the production life of the mature field.

And, as OSJ reported, Azule Energy, the JV between Eni and BP, has started up production from the Agogo FPSO, offshore Angola.

Azule Energy chief operating officer, Guido Brusco, is quoted by Reuters as saying the company plans to invest another US$5Bn in Angola over the next four to five years. This latest investment would match those previously undertaken by the JV over the last three years in new and existing projects.