(BP) Three European Oil Firms Strike Angola Deal

With the aim of expanding individual footing in the energy sector of South Africa, three European oil biggies entered into three different deals with Sonangol, the National Fuel Company of Angola, to explore the undeveloped pre-salt offshore acreage.

London, England-based BP plc (BP) received access to five more deepwater exploration and production blocks offshore Angola, netting a total of nine blocks. BP and Sonangol also inked production sharing contracts (PSCs) for four new blocks in the Kwanza and Benguela basins.

BP, with a 50% interest, will act as the operator for Blocks 19 and 24, while it holds non-operating interests of 20% in Block 20 and 15% in Block 25. Additionally, the company acquired a 40% stake in Block 26 and signed a farm-in deal with the operator, Petrobras (PBR).

Another integrated oil and gas behemoth, Statoil ASA (STO) won operating rights for Blocks 38 and 39, with 55% interest in both. The company also received 20% partnership interests in Blocks 22, 25 and 40. These blocks are located in the pre-salt play of Kwanza Basin.

Norway-based Statoil’s work commitment involves 3D seismic acquisition spanning 7,104.3 square miles. The company will also be engaged with the development of Sonangol’s Research and Technology Center, social projects and training programs for Sonangol employees.

Italian firm Eni SpA (E) inked a PSC with state-controlled Sonangol for the drilling of deepwater offshore Block 35 in northern Kwanza Basin. The block will be operated by Eni (30% stake), while partners Sonangol and Repsol Exploracion SA will hold a respective interest of 45% and 25%.

The scope of the contract offers exploration of two wells at pre-salt plays and the acquisition of a 3D seismic survey of 965.3 square miles.

Angolahas vast untapped reserves of oil and gas, which are attracting investors from across the globe. With the help of technological expertise and skilled manpower extended by the above alliance, exploration activities are expected to yield a high success rate. Development of the southwest African nation’s energy industry will also aid in fulfilling the growing domestic demand for fuel and minimize the dependence on imports.

We are maintaining Neutral ratings on BP, Statoil and Eni for the long term.

BP PLC (BP): Free Stock Analysis Report

ENI SPA-ADR (E): Free Stock Analysis Report

PETROBRAS-ADR C (PBR): Free Stock Analysis Report

STATOIL ASA-ADR (STO): Free Stock Analysis Report

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