ExxonMobil’s 1st discovery of oil reserves in two decades brings Angola on global landscape

After two decades of extensive efforts, Texas-headquartered ExxonMobil has succeeded in its first discovery of crude oil reserves in Angola in Bavuca South prospect. The milestone discovery, along with partners, is the first of its kind since 2003 and exists at the Valaris DS-9 drillship drilled the Bavuca South-1 well 365 km northwest from the coast of Luanda in 1100 meter (3605 ft) of water, encountering 30m (98 ft) of good quality hydrocarbon-bearing sandstone.

While ExxonMobil owns a 36 percent stake in the block, BP Exploration Angola holds a 24 percent interest in this project. Other partners in this project include ENI Angola Exploration (18 percent), Equinor Angola Block 15 (12 percent), and Sonangol P&P (10 percent). This projects great potential for the production of oil and gas, in addition to other hydrocarbon group products.

The United States’ largest independent oil and gas company ExxonMobil has mostly focused its exploratory activities in South America over the last five years. But, only the last month, the company announced two new discoveries each one at the Sailfin-1 and Yarrow-1 wells in the Starbroek block offshore Guyana, South America, potentially adding more oil to one of the most closely watched new oil discoveries. With this, ExxonMobil has now made more than 30 discoveries on the block since 2015 and has ramped up offshore development and production at a pace that far exceeds the industry average.

By contrast, ExxonMobil has succeeded in exploiting new discoveries in Africa after a long interval. Exploitations in Africa have been few and far between with its last discovery reported in 2003. The present discovery, however, will help the American multinational company add more oil to the existing production capacity and bridge the world supply deficit that emerged after sanctions on Russia, following Moscow’s invasion of Ukraine.

Opportunity in Africa
Africa is a land of oil and gas exploration opportunities. But, political instability, terrorism, and growing piracy menace have constantly forced the continent to hold back the exploration progress. With all drawbacks in place, Mozambique, an African country with huge reserves of natural resources, soon joined the league of African nations and grappled with resource scarcity and thus eventually extreme poverty. The security crisis in the northern region of Cabo Delgado displaced hundreds of thousands of people, created a humanitarian crisis, and thus, forced TotalEnergies to declare force majeure on its massive natural gas investment in Mozambique.

But, the trend has just reversed. Mozambique has become one of the favourite destinations for the global oil and gas majors. The country is all set to ship its first cargo of liquefied natural gas (LNG) overseas this month. This is a piece of good news for energy-starved Europe. While it is not immediately clear as to which country Mozambique started supplying LNG to, it will ease the natural resource’s supply tightness. Now, Mozambique sees a US$100 billion earning opportunity from natural gas assets during the next three decades.

Way back in 2010, another Texas-based company Anadarko Corp (now a subsidiary of Occidental Petroleum Corp.), and Italian energy giant Eni S.p.A discovered approximately 180 trillion cubic feet of natural gas reserves, equivalent to around 29 billion barrels of oil, in Mozambique’s supergiant offshore basin of Rovuma. This was the last big fossil fuel discovery of the continent which catapulted the South African nation to a potential global liquefied natural gas (LNG) superpower. This discovery prompted other global oil and gas majors such as TotalEnergies, Shell, China National Corp, and ExxonMobil to claim their stake in this field.

Algeria is already an established player as a major gas producer with substantial untapped reserves and is connected to Spain with several undersea pipelines. To take advantage of this potential, Germany and the European Union have proposed to work together to expand the pipeline capacity connecting Spain and France, from more Algerian gas could potentially be transported to Germany and elsewhere.

Also, Libya gas fields have of late developed good pipeline connectivity with Italy. In both, Algeria and Libya, Europe is looking to help tap new fields and increase gas supply. New pipelines under discussion currently focus on the Eastern Mediterranean Pipeline Project, which would bring gas from Israel’s offshore gas fields to Europe. Other than the aforementioned, the biggest African sources lie south of the Sahara – including Nigeria, which has about a third of the continent’s reserves, and Tanzania. Senegal has recently discovered major offshore fields.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com