Asset/portfolio management

BP, Eni Merge Angolan Upstream Businesses

Azule Energy, a new E&P company, will be independently managed and one of Angola’s largest oil producers.

The new company, Azule Energy, will boast more than 200,000 BOE/D of production.

BP and Eni have signed an agreement to form a new 50/50 independent company, Azule Energy, through the combination of the two companies’ Angolan businesses. The agreement follows the memorandum of understanding between the companies agreed in May 2021.

Azule Energy will be a new international energy company, independently managed, with more than 200,000 BOE/D of net oil and gas production and 2 billion bbl equivalent of net resources. It is expected to be Angola’s largest producer, holding stakes in 16 licenses, as well as participating in the Angola LNG joint venture. Azule Energy will also take over Eni’s stake in Solenova, a solar company jointly held with Sonangol.

Under terms of the agreement, BP and Eni will receive 50% stakes in Azule Energy. Eni will receive a net adjustment of $338 million to be settled through Azule Energy, with 62.5% payable upon completion and 37.5% payable on the first anniversary of the transaction closing.

The new company will have new projects starting up over the next few years, including the new Agogo and PAJ oil projects in Blocks 15/06 and 31, respectively. It will also develop the New Gas Consortium (NGC), the first nonassociated gas project in the country.

BP and Eni said combining their efforts will create more-efficient operations and offer the potential for increased investment, job creation, and growth in Angola. Azule Energy will continue to develop the country’s upstream sector and capture new opportunities from the energy transition with the growing role of gas and renewables in its portfolio.

The creation of Azule Energy will be subject to all customary governmental and other approvals, with the aim of completing the transaction in the second half of 2022. Once set up, Azule Energy will be equity-accounted by BP and Eni. Hydrocarbon production and greenhouse-gas emissions will continue to be reported on an equity-share basis. The new company will also continue BP and Eni’s social investment commitments in Angola.

Currently, Eni is the operator of Blocks 15/06 Cabinda North, Cabinda Centro, 1/14, 28, and soon, NGC. In addition, Eni has a stake in the nonoperated blocks 0 (Cabinda), 3/05, 3/05A, 14, 14 K/A-IMI, 15, and in Angola LNG.

BP is the operator of Blocks 18 and 31 offshore Angola, and has nonoperated stakes in blocks 15, 17, 20, and 29. BP also has nonoperated interests in NGC and Angola LNG.