Angola’s new 6-year licensing rounds position it ahead of Nigeria
…As investors scramble for juicy acreages
Angola’s two-year-old oil reforms have entered a new stage thanks to its launch of the first phase of a brand new six-year oil licensing strategy making it Africa’s hottest oil and gas frontier, ahead of Nigeria.
Paulino Jerónimo, the chief executive officer of the National Agency of Petroleum, Gas, and Biofuels (ANPG) launched the licensing round at the Angola Oil & Gas Conference 2019, ended Thursday. It covers a total of 10 blocks, including Blocks 11, 12, 13, 27, 28, 29, 41, 42 and 43 in the Namibe Basin, and Block 10 in the Benguela Basin.
This is the first public auction in Angola since the pre-salt layer blocks auction of 2011, and the first of a series of licensing rounds that will see as many as 55 blocks put up for public bidding or direct negotiations until 2025.
It follows the strategy set out under Presidential Decree No. 52/19 released last February to boost exploration, maximise reserves replacement and ultimately increase national production of oil and gas. The strategy maps the auctioning of 31 blocks under public bidding in 2019, 2020 and 2023. It is also the first to take place under the oversight of the ANPG.
“The promotion of the blocks is starting immediately. The ANPG will embark on an international roadshow in September to engage with investors in Houston, London and Dubai prior to opening the tendering process in October,” Jerónimo explained. “Our message to the global oil industry is simple: Angola is open for business.”
Angola is only the latest oil-producing African country in the news announcing bid rounds. Uganda did same recently, Egypt too. While many countries sitting on oil reserves are keen to produce the commodity before it becomes less valuable as global policies to address climate change come into effect, Nigeria is dragging its heels on the reform of the oil and gas industry.
The reform efforts, which date back to April 2000 when the government of President Olusegun Obasanjo set up the Oil and Gas Reform Implementation Committee, have suffered serious setbacks.
President Obasanjo’s administration had set two growth targets for the nation’s oil and gas industry: to increase oil reserves to 40 billion barrels and production capacity from 2.5 million barrels per day to four million bpd by 2010.
Four licensing rounds were held during his administration – in 2000, 2005, 2006 and 2007, although they were marred by controversy as they suffered shortcomings. These were the last licensing rounds to date.
Oil licences are often perceived as the biggest reward for political patronage in Nigeria, with many oil blocks now owned or partly owned by politicians and government cronies.
“This government has not given out any oil blocks for the four years it lasted. We did not even do marginal fields. The Presidents belief was that we should first clean up the sector before we start dishing out political patronages” Ibe Kachikwu, former Minister of State for Petroleum Resources said in a recent interview with BusinessDay and other journalists.