Sonangol soon to announce new deep water operators

Jun 09, 1998 02:00 AM

Apr. 8, 1998 The Angolan national petroleum company Sonangol will announce which firms have won the rights to operate deep water blocks 24 and 25 within the coming weeks.
"We have already selected the operators for blocks 24 and 25, and we have selected the remaining equity partners," an official, involved in the allocation of concessions, told. "We are just waiting for the final approval of the equity partners to make a public announcement."

Blocks 24 and 25 are in deep water of up to 1,500 metres in the Benguela basin, 400 km (250 miles) south of the capital Luanda.
The Sonangol official said new bids were now being received for ultra-deep blocks 31, 32 and 33. Bids on Angola's first ultra-deep blocks opened on April 1. Companies have two months to prepare their offers.
Sonangol said the signature bonds which have been accepted for blocks 24 and 25 are the highest paid in Angola so far, topping $ 60 million. The company expects downpayments on the ultra-deep blocks to exceed $ 100 mm each.
"We have a very recent survey of all the ultra-deep blocks, conducted by Western Atlas for Sonangol, which we sell to the bidders," the Sonangol official said. "Based on that survey we believe we can make very big discoveries in these blocks, bigger than in blocks 15 and 17."

In the last 18 months Exxon in block 15 and Elf in block 17 have discovered 5 new oil fields including Elf's Girassol, which has estimated reserves of 1 billion barrels. Blocks 31 and 33 run adjacent to blocks 15 and 18.
Sonangol has acknowledged that for blocks 31, 32 and 33 there was a company which had right of first refusal on the operatorship. If it wanted to exercise its right it would have to match the best bid on the block and pay a premium of 10-15 % of the signature bond, the official said.
Foreign oil executives expect British Petroleum, Elf and Norsk Hydro to win the operatorships and said competition to acquire a share in the equity of the three blocks was stiff.
Angola is expected to overtake Nigeria as Africa's biggest oil producer by the turn of the century and currently produces around 750,000 bpd.
In the deep and ultra blocks, operators gain the rights to 6 years for exploration and 25 years of production. Subsequently all rights and installations revert to the Angolan government.
In shallow water blocks, rights are for 5 years of exploration and 20 years of production.
During production Sonangol is entitled to 70 % of profits.
Operators also have to comply with strict rules on the employment and training of local staff. At present, 100 % of all basic level workers, 80 % of middle management and 50 % of senior executives have to be Angolan.

Source: not available
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