Angola and France Join Forces to Tap into Rich Oil Reserves in Kwanza Basin

A joint venture between Sonangol and TotalEnergies will explore offshore drilling in one of Africa’s most promising oil regions.

by Motoni Olodun

Angola, one of the world’s largest oil exporters, is set to boost its production capacity with a new offshore development in the Kwanza Basin, a region with abundant hydrocarbon resources. The project is a joint venture between the country’s national oil company, Sonangol, and the French multinational petroleum corporation, TotalEnergies.

The two companies signed a framework agreement in May with the Angolan oil and gas regulator, ANPG, to explore the feasibility of developing the Cameia and Golfinho oilfields located on Blocks 20 and 21 of the basin. The agreement will pave the way for the future construction of floating production storage and offloading facilities, also known as FPSOs, which can extract, process, and store oil and gas from underwater reservoirs.

TotalEnergies, based in Paris and ranked as the 21st largest company in the world by Forbes in 2023, will own a majority stake in the development. The company already has significant interests in six other FPSOs in the Angolan market, making it one of the leading players in the country’s oil industry.

Sonangol, a state-owned enterprise that manages Angola’s vast subsurface energy reserves, will partner with TotalEnergies to ensure the project meets its sustainability goals. According to preliminary plans, the Kwanza Basin development will generate electricity from a combined cycle turbine and implement a zero-flaring policy, which will reduce the facility’s carbon emissions.

Sonangol has invested heavily in new facilities and practices to decarbonize Angola’s domestic energy industry and export green energy sources to Western markets. Sonangol is expected to complete construction next year on a new facility in Barro do Dande that will produce green ammonia, a substance that will allow Angola to efficiently export green hydrogen—a low-emission energy source—from sub-Saharan Africa to high-demand markets in Europe. The company is undergoing a gradual privatization process, with the Angolan government set to sell 30% of the company’s equity to private investors by 2026.

Angola produces 1 to 2 million barrels of petroleum daily and joined OPEC in 2007. The country has become an attractive destination for foreign investment over the last decade. Chevron, for example, the American oil company, is working with Sonangol to construct a refinery in Soyo, projected to become the largest foreign investment in Angolan history.

The Kwanza Basin could mark the ideal location for the development of FPSOs. Situated off the Angolan coast directly due south of the Lower Congo Basin, one of Africa’s largest petroleum-rich regions, the Kwanza Basin is thought to have extensive reserves of hydrocarbons, including oil and methane. Much of this is owed to the thick salt deposits on the seabed, which, over millennia, have trapped hydrocarbons in underwater reservoirs and prevented their escape into the ocean water.

The development of FPSOs with TotalEnergies could add significant productive capacity to Angola’s petroleum industry and advance the country’s transition to energy self-sufficiency, a major objective of its current administration. The project could create new jobs and opportunities for local communities and businesses. The framework agreement is a sign of strong cooperation between Angola and France, which share a common vision for a prosperous and sustainable future.

Source: Business Insider Africa

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