PrintOn January 1, 2007, Angola became the 12th member of the Organization of Petroleum Exporting Countries (OPEC). As an OPEC member, Angola will have to pay $2 million per year in membership fees and might be restricted by OPEC quotas on oil production. Angola is the second largest oil producer in Sub-Saharan Africa behind Nigeria.
Angola is set to experience oil production increases over the next five year period as new offshore projects come online. Angola exports crude oil primarily to China, the United States, Europe and Latin America.
The majority of natural gas produced in Angola is either flared or used in oil recovery. To help reduce flaring, Chevron and Sonangol are planning to build a five-million-ton liquefied natural gas (LNG) plant, which could be operational in 2010.
Oil
Overview
According to Oil and Gas Journal (OGJ), Angola had proven oil reserves of 8.0 billion barrels as of January 2007.
The majority of the reserves are located in Angola’s offshore blocks. Blocks 15 and Zero have been the most prolific offshore blocks.
Proven reserves are also located onshore near the city of Soyo. The majority of Angolan oil is medium to light crude (30 degrees – 40 degrees API) with a low sulphur content (0.12 percent - 0.14 percent).
Angola’s crude oil production has more than quadrupled over the past two decades. In 1986, crude oil production averaged 280,000 barrels per day (bbl/d), while production in 2006 averaged 1.4 million bbl/d. According to EIA estimates, Angolan oil production is set to reach two million bbl/d by 2008, when new deep-water production sites are expected to come online.
Also consistent with EIA estimates, in December 2006, the World Bank announced that Angola will likely see peak oil production in 2011 at 2.6 million bbl/d followed by production declines if there are no new oil discoveries. Angola consumes small amounts of oil (62,000 bbl/d in 2006) when compared with oil production. However, oil consumption is expected to increase as infrastructure is refurbished and expanded.
Exports
Angola exports crude oil primarily to China (477,000 bbl/d as of November 2006) and the United States. In 2005, the United States imported approximately 473,000 bbl/d of oil from Angola, which made Angola the eighth largest supplier of crude oil to the United States. As of October 2006, the United States had imported an average of 526,000 bbl/d of oil from Angola. Angola also exports crude oil to Europe and Latin America.
Sector Organization
In 1976, the Angolan government created a national oil company (NOC) called the Sociedade Nacional de Combustiveis de Angola (Sonangol). In 1978, Sonangol became the sole concessionaire for oil exploration and production in Angola. Sonangol works with foreign companies through joint ventures (JVs) and production sharing agreements (PSAs), while funding its share of production through oil-backed borrowing. Major international oil companies (IOCs) operating in Angola include BP, Chevron, Devon Energy, ExxonMobil, Maersk, Occidental, Roc Oil and Total.
Production
Block Zero
Oil production in Angola is concentrated in numerous onshore and offshore blocks. The offshore blocks are divided into three bands; (band A) shallow water blocks 0-13; (band B) deepwater blocks 14-30, and (band C) ultra-deepwater blocks 31-40. Block Zero is located offshore Cabinda province and accounts for approximately 370,000 bbl/d of Angola’s oil production, or almost one
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