KEY POINTS
- Shell to acquire 35 percent interests in offshore Blocks 49 and 50 from Chevron
- Deal targets ultra deepwater exploration off Angola’s coast
- Angola courts foreign investment to sustain crude output above one million barrels per day
Shell has agreed to buy stakes in two undeveloped offshore oil blocks in Angola from Chevron, strengthening its position in one of Africa’s most important crude producing nations.
The European energy major said Tuesday that it had signed a farm in agreement with Cabinda Gulf Oil Company, a Chevron subsidiary, to acquire a 35 percent interest in Blocks 49 and 50. Both blocks lie in ultra deepwater acreage off Angola’s coast and are considered part of the country’s next frontier for offshore exploration.
Chevron confirmed the transaction, noting that the deal remains subject to regulatory clearance. Financial terms were not disclosed.
The move comes as major oil companies signal renewed interest in Angola, sub Saharan Africa’s second largest oil producer after Nigeria. The country has rolled out sweeping regulatory reforms in recent years, aiming to attract fresh capital and technology into an industry facing natural decline from mature fields.
Angola seeks to sustain output
Angola has been very clear about its goal of keeping crude oil production above one million barrels per day. This goal depends a lot on new offshore discoveries and investments. Government officials have said that the country is a good place for long-term energy projects because it has more flexible licensing terms and faster approvals.
Shell said that new exploration projects, like those in Angola, are key to its plans to keep production going for the next ten years. The company has said that it plans to slowly increase gas production until 2030 while keeping oil production mostly the same.
Even though global energy companies are under pressure to balance fossil fuel investments with climate commitments, industry analysts see the Angolan deepwater basin as one of the few remaining areas with a lot of potential.
The deal is also a sign of Chevron’s ongoing work to simplify its global portfolio. By selling off interests in undeveloped blocks, the US energy company can put more money into assets that are closer to production or that fit with its strategic goals.
Chevron has been doing business in Angola for decades through Cabinda Gulf Oil Company. Angola is still an important country for the company. Chevron can share the risk of exploration with Shell while still being able to benefit from any potential upside.
Shell‘s return to aggressive upstream investment in Angola is part of a larger trend among European majors, who have continued to invest billions of dollars in African oil and gas despite the global debate over the energy transition.
