Eni, BP Seal Azule JV Deal; Agree FID With New Gas Consortium Partners in Angola
The Eni-BP Azule JV creates Angola’s largest independent oil and gas company and will operate the New Gas Consortium project, the country’s first non-associated gas project and a boost to West African LNG.
Italy’s Eni and its partners in the New Gas Consortium (NGC), together with Angolan concessionaire and regulator, the National Agency for Oil, Gas and Biofuels, have reached a final investment decision (FID) on Angola’s first nonassociated gas project, Quiluma and Maboqueiro (Q&M).
Eni has held a 25.6% operator interest in NGC but will now be joined by BP (11.8%) as co-operator as the two companies’ merge their Angolan businesses to create the 50/50 Azule Energy joint venture (JV), Angola’s newest and largest independent oil and gas producer.
The Q&M project aims to produce 4 Bcm per year of gas (330 MMscf/D at plateau) from two offshore wellhead platforms. The project also includes an onshore gas processing plant and a connection to the Angola LNG (ALNG) facility to enable marketing of condensate and gas as LNG cargos. Construction will start this year, with first gas expected in 2026.
The New Gas Consortium’s 28 July final investment decision (FID) declaration is significant in that the $12-billion ALNG facility which shipped its first cargo in 2013 has to date relied on associated gas from oil production as a feedstock.
The Q&M project to deliver the plant’s first non-associated gas supply bolsters LNG production and delivers domestic gas for the country's industrial development. On 11 August, Saipem announced it had won three engineering, procurement, and construction contracts valued at $900 million.
New Gas let the contracts (two offshore and one onshore) to cover, among other tasks, hookup and commissioning assistance for the Quiluma platform and a new onshore natural gas processing plant that will serve the Lower Congo Basin.
Eni-BP Azule Energy JV Deal Done
Eni and BP signed an agreement to create Azule Energy in March. On 1 August, 2 days after New Gas declared FID, the two majors announced that Azule was now “established”—that both companies’ Angolan staff had merged, and a six-member board was set up with representation split equally between the two majors. Incorporation would be finalized after $2.5-billion in third-party, pre-export financing had been secured and regulatory approvals received, the release noted.
Azule will take over as operator of the Q&M development with a 37.4% stake from Eni and BP’s combined shares. Chevron’s Angolan subsidiary, Cabinda Guld Oil Company Ltd. (CABGOC) holds 31% in Q&M; Angola’s state-owned Sonangol P&P, 19.8%; and France’s TotalEnergies, 11.8%.
Overall, the Azule JV holds 2 billion bbl equivalent of net resources in Angola and expects to grow production to 250,000 BOED of equity oil and gas production over the next 5 years. The venture has stakes in16 licenses (six of them exploration blocks) and participates in ALNG through the original co-equal stakes of Eni (13.6%) and BP (13.6%).
Chevron affiliate CABGOC and Sonangol co-lead ALNG with 36.4% and 22.8% equity, respectively. TotalEnergies holds 13.6%. The facility, which dropped its first LNG in 2013, has a gas processing capacity of 353 Bcf per year and a 5.2-mtpa liquefication capacity. It boasts a fleet of seven LNG vessels and three loading jetties.
Azule’s exploration acreage exceeds 30,000 km2 in Angola’s most-prolific basins, close to existing infrastructure, and already has new projects in the pipeline, such as the Agogo Full Field and PAJ oil projects in Blocks 15/06 and 31, the Eni/BP release noted.
Downstream, Azule will assume Eni’s share in the Solenova solar company jointly held with Sonangol as well as collaborative activities at the Luanda Refinery.
TotalEnergies Won't Be Outdone— Begonia Oil Also Had Its FID
TotalEnergies Won’t Be Outdone—Begonia Oil Also Had Its FID
Meanwhile, as it was joining with its partners in the New Gas Consortium in confirming a decision to invest in the Q&M gas project, TotalEnergies declared a second FID on the same day (28 July)—its $850-million investment in the Begonia offshore oil field.
Begonia is the first development of Block 17/06 (which Total operates) and consists of five wells tied back to the Pazflor FPSO (floating production, storage, and offloading unit) on Block 17, which is located 150 km off the Angolan coast.
The project will add 30,000 B/D to Pazflor's production after commissioning which is expected in late 2024. Begonia will be the second TotalEnergies-operated development in Angola to use a standardized subsea production system which the French major said cuts costs by up to 20% and shortens equipment delivery lead times.
TotalEnergies pioneered the first use of its system at CLOV Phase 3, another satellite project that produces 30,000 B/D and was launched on Block 17 in June 2022 and will move forward now with Begonia after agreeing with concession holder Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG) and its partners on Block 17/06.