Eni has gone on to confirm a major offshore oil discovery in Block 15/06 at Angola, with initial estimates pointing to almost 500mn barrels of oil in place, therefore strengthening the upstream outlook of the company and also highlighting the value of infrastructure-led exploration.
It is worth noting that the discovery was made in the Algaita-01 exploration well, which is located around 18 kilometers from the Olombendo FPSO. Drilled in 667 meters of water through the Saipem 12000 drillship, the well went on to come across oil-bearing sandstones throughout multiple Upper Miocene intervals. The company confirmed that the reservoir quality does look pretty robust, with strong petrophysical properties confirmed by way of logging and fluid sampling.
Apparently, the estimated 500mn barrels of oil in place indicates one of the more prominent Angolan finds in recent years. Although the recoverable volumes have yet to be disclosed, its proximity to the Olombendo floating production, storage along with offloading vessel quite significantly elevates the development case. Tie-back opportunities to the present infrastructure can materially go on to decrease the capital intensity and speed up the time to first oil, which, by the way, is an increasingly crucial factor as international oil companies go on to prioritize capital discipline along with shorter-cycle projects.
It is worth noting that Block 15/06 is operated by Azule Energy, which goes on to hold a 36.84% stake. The leftover interests are held by Sonangol E&P at 36.84% as well as SSI at 26.32%. Notably, Azule Energy is a 50:50 JV between Eni and BP and was established in 2022 in order to consolidate the Angolan upstream portfolios of both the companies. The JV has since then gone on to emerge as one of the leading independent operators of the country, with producing assets getting tied to numerous FPSOs such as Olombendo and N’Goma.
The discovery in a way goes on to reinforce the continued exploration potential of Angola, especially across mature basins wherein the infrastructure is already well set up. In recent years, Luanda has been looking to reverse the dipping production via certain fiscal reforms along with certain new licensing rounds, which are aimed at attracting novel investment. Discoveries like Algaita-01 offer quite a tangible push to those efforts, specifically as the operators stress near-field exploration in order to maximize returns from the present hubs.
When it comes to Eni and BP, the find goes on to strengthen the upstream pipeline of Azule Energy, and that too at a time when both companies are in the process of recalibrating their portfolios in a scenario of energy transition pressures along with volatile oil prices. Infrastructure-led exploration when it comes to established basins goes on to provide comparatively lower risk and fast-paced monetization, syncing with wider sector trends toward high-margin along with capital-efficient barrels.
Notably, more appraisal work is going to be needed in order to refine the reserve estimates and also put in place a development plan. But the mix of sizable oil in place along with high-quality reservoirs as well as processing capacity that is nearby goes on to position Algaita-01 as a probable material addition to offshore output from Angola in the years to come.
