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concerns about accountability and transparency frontier basin. ofthese,o ensizeable,accounts,”hesaid. SaturninodescribedtheMoUasa rststepin
Broader options
More exploration is coming. Total committed to exploring Block 48, in the ultra-deepwater Lower Congo Basin, in December 2017 and this was announced in late May. During the rst two- year phase, an exploration well is to be drilled. According to media reports, the water depth may see a new world record set. e block had been awarded to Sonangol alone in February 2016, but the state-backed company was unable to make progress and is now sharing it 50:50 with Total. e restructuring represents something of a climb down for Angola, but increases the chance of activity going ahead.
Furthermore, Equinor is reported to be in the process of acquiring a new block, although it is unclear which. Sonangol has suggested the deal with Equinor would be similar to that with Total, in that it would involve the Angolan company relinquishing some equity in a block. e Ber- nama news agency quoted Saturnino as saying blocks for Equinor may include Blocks 5/06 and 18/15.
While reforms to the country’s upstream are certainly welcome, high costs of production remain at the heart of Angola’s di culties. e country is a high cost oil producer and, while costs have been reduced somewhat, as has been the case at Zinia 2, they are still high from a global competition perspective.
ExxonMobil signed a memorandum of understanding (MoU) with Sonangol on exploring three new blocks in the Namibe Basin in December 2018. e three blocks were not identi ed. ExxonMobil, in November, had been rumoured to be interested in six blocks in the
strengthening the co-operation between the two companies. e MoU allows them to begin con- tract negotiations on the concessions. ExxonMo- bil has also signed up to work over the border, in Namibia’s side of the Namibe Basin.
Politics
The election of Angolan President Joao Lourenco, in 2017, has marked a number of changes that may yet allow the country to make up some of the lost ground in its hydrocarbon production, while also encouraging economic diversi cation.
Lourenco was sworn in as president in Sep- tember 2017, following Jose Eduardo dos Santos, who had held the role for 37 years.
The new president had been tipped to be a follower in dos Santos’ footsteps and was regarded as a continuity candidate. Confound- ing this expectation, though, Lourenco has taken a number of steps to make his mark on the coun- try, not least through rolling back the economic in uence of the dos Santos clan.
Lourenco’s most high-pro le move against his predecessor’s interests was the removal of Isabel dos Santos and Jose Filomeno dos Santos from their positions leading Sonangol and the country’s sovereign wealth fund (SWF).
e government has also pushed ahead with plans to shake up the energy sector and revital- ise investment. “ e creation of the [Agência Nacional de Petróleo, Gás e Biocombustíveis] ANPG is certainly a good start to the planned reforms. ere’s going to be a transitional period and I think it’s unclear at this stage how long it will really take to shi those functions from Sonangol to the new agency,” Blythe said. “ e
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w w w . N E W S B A S E . c o m Week 23 11•June•2019