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Press release

Angola’s low sanctioning activity to influence production and spending

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Authors: Olga Kerimova, Senior Analyst, and Theodora Batoudaki, Analyst, Rystad Energy

Publisher: PESGB Newsletter, June Edition

Angola was the second largest oil producer in Africa in 2015. While oil production from Angola’s offshore oil fields is in natural decline, gas production from these fields is becoming commercial with Angola LNG expected to resume operations this year. This article assesses the Angola E&P status and outlook, illustrated by the three key drivers: production, exploration success and spending.

Figure 1 depicts the total production for Angola, split by oil and gas, from 2010 to 2020. Historically, almost all production has been from offshore oil fields with associated gas flared or re-injected into the reservoir. The largest contributions to production are from the Total-operated Block 17 and ExxonMobil-operated Block 15, followed by Block 0 (Chevron-operated) and Block 18 (BP-operated). In mid-2013 the Angola LNG plant shipped its first cargo but had since been shut down after experiencing a series of mechanical problems, leaks and fires; commercial operations are expected to resume by mid-2016. The plant will process associated gas from offshore oil fields (Blocks 0, 1, 2, 14, 15, 17 and 18) and will contribute to the growing gas production post 2016 as shown in Figure 1. Angola’s liquids production is expected to decline from 1.8 million bbl/d in 2010 to around 1.4 million bbl/d in 2020, while the country’s total liquids and sales gas production is expected to be around 1.6 million boe/d in 2020.

Figure 2 shows the discovered volumes for Angola from 2008 to May 2016. Most of the discoveries are still unsanctioned (about 80% of discovered volumes). Almost 550 million boe were discovered in 2009, dominated by the Maersk Oil-operated deepwater field Chissonga (Block 16). Although in 2010 the total discovered volumes declined for Angola, Eni had a good exploration year after making two noticeable discoveries, Cabaca South East (East hub development project-Block 15) and Mpungi (West hub development project-Block 15). Eni started production in Mpungi in January 2016 and is planning to bring Cabaca South East online in the second half of 2017. The years 2012-2014 were marked by significant exploration successes, including Cobalt’s discoveries in the prospects Cameia (Block 21), Lontra (Block 20) and Orca (Block 20), now Sonangol-operated. Orca, the largest oil discovery in the Kwanza Basin, makes up about 85% of the discovered volumes in 2014. A disappointing year with lack of exploration success followed, despite the exploration efforts in 2015. In April 2016 a major gas discovery, Katambi, was made in the BP-operated Block 24. Although adding significant resources, the discovery may take a longer time to be developed due to a lack of gas infrastructure in Angola, where production has historically been from oil fields.

Figure 3 shows the total spending in Angola from 2010 to 2020. Exploration capex has averaged around $3 billion per year from 2010 to 2015 but is expected to drop by over 60% this year and average around $1 billion per year over the next four years. Capital expenditure (Capex) reached a high of around $17 billion in 2011, driven mainly by the development of Angola LNG. The capex remained at around $15 billion until 2014, with main contribution from the Chevron-operated Mafumeira Sul (the second phase development of the Mafumeira field in Block 0), which is expected to start producing in the second half of 2016. Capex decreased by around 17% in 2015 and the declining trend is expected to continue until 2019/2020, despite increasing investments in Cameia and Cabaca South East, which are expected to be completed around 2018/2019. The operating costs (Opex) are expected to average around $9.5 billion per year, accounting for inflation, until the end of the decade.


Production and investments in Angola E&P are expected to drop over the next five years, largely due to the long lead time of discoveries and delays in development. Hence, most of the resources discovered over the past five years are not expected to contribute to production before 2020. At the same time, natural gas production is expected to grow by 60% from 2016 to 2020 as the Angola LNG resumes processing the associated gas from Angola’s oil fields. The recent BP-operated gas discovery, may also add significant gas volumes to the country’s production, contingent on the necessary infrastructure being in place; however, this impact is not expected to be visible before 2030.


Article Contacts

Contact: Olga Kerimova, Analyst
Phone: +47 24 00 42 00

Contact: Theodora Batoudaki, Analyst
Phone: +47 24 00 42 00

About Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.

Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro) and Singapore.