Petronas Buys 40% of Angola’s Block 20 from TotalEnergies

by Victor Adetimilehin

Petronas, the Malaysian state-owned oil and gas company, has acquired a 40% stake in Block 20 in Angola’s Kwanza Basin from TotalEnergies, the French energy giant. The deal, which was announced on Thursday, was valued at $400 million as of January 1, 2023, subject to customary price adjustments.

Block 20 contains the Cameia and Golfinho oil discoveries, which are planned to be developed through a system of subsea wells connected to a floating production, storage and offloading unit (FPSO) with an oil production capacity of 70,000 barrels per day. This will be the seventh FPSO developed by TotalEnergies in Angola, where it has been present since 1953 and operates several deep offshore assets.

TotalEnergies said it was pleased to welcome Petronas, one of its strategic partners, on Block 20 and that the partnership would enable them to take the final investment decision for the development of the fields, with the support of the Angolan authorities. The company also said that the project would include the best available technologies to minimise greenhouse gas emissions and that the facilities would be designed for zero flaring, with the associated gas entirely reinjected into the reservoirs.

Petronas said that the acquisition was in line with its strategy to grow its portfolio in Africa, where it has been operating since 1989 and has interests in exploration, development and production activities in nine countries. The company also said that it looked forward to working with TotalEnergies and Sonangol, the Angolan state-owned oil company that holds a 20% stake in Block 20, to bring the project to fruition.

Angola is Africa’s second-largest oil producer after Nigeria and relies heavily on oil revenues for its economy. However, the country has been facing challenges from declining production, low oil prices and the covid-19 pandemic. The government has been implementing reforms to attract more investment and diversify the economy, including offering new exploration blocks and incentives for existing operators.

The deal between TotalEnergies and Petronas is the latest in a series of transactions involving oil and gas assets in Angola, as some companies seek to exit or reduce their exposure while others see opportunities for growth. In July, Italy’s Eni sold a 10% stake in Block 15/06 to Sonangol for $400 million, while Norway’s Equinor agreed to sell a 10% stake in Block 39 to Sonatrach, Algeria’s state-owned oil company, for an undisclosed amount.

The sale of Block 20 is subject to the approval of the Angolan authorities and other customary closing conditions.

Source: Reuters

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