A collaborative environment in AngolaJuly 27, 2021
Melissa Bond, general manager and lead country manager of ExxonMobil Angola, talks to The Energy Year about the company’s entry into the Namibe Basin, the latest on its Block 15 redevelopment activities, and its efforts on managing through the pandemic as well as local content development. ExxonMobil has interests in Angola’s producing deepwater blocks 15, 17 and 32 as well as deepwater blocks 30, 44, and 45 and onshore Cabinda Centro.
What are the main challenges in the exploration of the Namibe Basin?
The Namibe Basin is frontier exploration. We do not have exploration wells in the proximity and therefore we will be leveraging our expertise around geologic and regional trends combined with seismic processing and interpretation to evaluate and determine future prospects.
Our entry into the Namibe Basin blocks 30, 44 and 45 provides a large acreage position, and combined with our acreage position in northern Namibia enables us to evaluate and see trends across the entire basin. That will help us understand the exploration opportunities better and increase our chance of success and hopefully yield future developments in Angola. The next three years will be focused on seismic evaluation to determine potential prospects for exploration drilling which could take place in a 2024 timeframe.
How has working with the National Oil, Gas and Biofuels Agency (ANPG) been as your company pursues new opportunities?
The ANPG, as the national concessionaire, has been very supportive and they have fostered a collaborative environment that brings the best for Angola from our industry while taking measures to attract investment.
In the case of Namibe, the ANPG was instrumental in helping progress seismic activities in blocks 30, 44, and 45 in 2020, which accelerated the acquisition by one year. We have already acquired 3D seismic and are now analysing it to understand and assess the basin’s potential. This was ultimately enabled by the ANPG authorising a multi-client survey while progressing government approvals on our risk service contracts. Shortly after signing the risk-service contracts, we had the seismic data and commenced our evaluation work. This collaboration is just one example of how the ANPG is supportive and assisting to accelerate future development.
What is the latest on the redevelopment of Block 15?
Block 15 has been a very productive and profitable block for Angola and its investors since we started production in 2003. The block achieved peak production of over 700,000 bopd in early 2009 and has produced over 2.4 billion barrels to date. Today, we are producing approximately 150,000 bopd, having seen natural decline over the years. We do have a redevelopment project underway which will involve two drilling rigs and is expected to add about 40,000 bopd of new production in Block 15. Drilling was originally planned to start in late 2020, but was delayed due to the pandemic. We expect to contribute approximately 1,000 jobs during the execution phase of the project.
How did the new regulation on marginal fields affect this particular project?
Following the task force work and government collaboration with the industry in 2017-2018, we saw the Marginal Fields Decree, which effectively provided fiscal stimulation to attract investment for resources near existing infrastructure.
The intent and spirit of the Marginal Fields Decree was what underpinned the terms and agreement for the Block 15 licence extension and ultimately attracted investment for redevelopment drilling. Effectively, we were able to unlock additional resource development by working with the ANPG and the Angolan government to find a win-win opportunity. By leveraging marginal field concepts, we created a competitive investment opportunity that could compete with the global portfolio and add reserves and production.
How do you think the Angolan oil and gas industry as a whole has responded to the pandemic?
From a business and industry perspective, I am proud of what ExxonMobil and the industry have done in Angola through the pandemic. Our industry continues to work closely with the government and health officials to implement safeguards to protect the health of our workforce and the surrounding community while maintaining essential logistics and movement of personnel to sustain production and maintain business continuity. As the Angolan government took proactive measures in efforts to reduce health risk and prevent spread of the virus in the country, we had numerous conversations with the Ministry of Health and the Ministry of Mineral Resources, Petroleum and Gas on how to effectively implement these safeguards and maintain business continuity.
The collaboration between the oil and gas operators represented through ACEPA (Association of Exploration and Production Companies in Angola) and the Angolan government was exceptional. It enabled us to combine ideas and resources including the establishment of additional treatment centres and testing facilities. Together, we have been successful in maintaining business continuity while taking measures to protect our people.
It is also very important to recognise the dedication and commitment of our workers. They have endured long periods away from their families and been willing to quarantine and work extended rotations. Our success has only been possible through their efforts and it has not been easy. Pandemic fatigue and mental health are key risk factors that are critical to manage.
How was ExxonMobil able to navigate the difficult business conditions of 2020 while maintaining efficiency in its producing assets?
With the help of the implemented safeguards, we had zero Covid-19 positive cases in our offshore operations during 2020. Despite reduced workforce levels at our sites and logistical challenges in moving equipment and people, we achieved high reliability on base production. Key impacts were delays to redevelopment activity and deferrals on scheduled maintenance but we have plans to progress these areas over the coming year.
What effect did the pandemic have on the Angolan energy industry’s competitiveness?
The pandemic resulted in demand destruction for oil and very low oil prices and some challenges to investment opportunities. Industry had to adjust on some investments given lower revenues and having less capital to deploy. As a result, attracting new investment will be difficult and opportunities in Angola will need to compete with the best opportunities around the world. This also necessitates that our industry be more efficient and cost competitive as we move forward.
How can IOCs and governments tackle the high-costs issue?
It is important to improve our efficiency and effectiveness to reduce operating and development costs. We have had discussions with the ANPG and industry on potential sharing opportunities across blocks to optimise requirements for equipment or vessel needs. It is also important we work alongside the ANPG to benchmark our industry and its relative competitive position on cost, ease of doing business and fiscals to other operations and opportunities around the world and use that information to work together to make changes that improve cost competitiveness.
What are the key points to resolve from a fiscal perspective?
It boils down to being competitive relative to other opportunities around the world. When there is limited capital, the available capital is going to flow to those opportunities that provide investors the best return at the lowest risk.
How is ExxonMobil working to reduce its carbon footprint?
Here in Angola, we are proud of what Block 15 has been able to do in this area and more specifically around minimising flaring. We continue to focus on equipment reliability to make further advancements.
ExxonMobil has created a new business to commercialise its extensive low-carbon technology portfolio. The new business, ExxonMobil Low Carbon Solutions, will initially focus on carbon capture and storage, one of the critical technologies required to achieve net zero emissions and the climate goals outlined in the Paris Agreement.
Further, ExxonMobil met its 2020 emission reduction goal, which included a 15% reduction in methane emissions versus 2016 levels, and a 25% reduction in flaring versus 2016 levels.
The company’s 2025 emission reduction plans include a 15-20% reduction in upstream greenhouse gas intensity versus 2016 levels, supported by a 40-50% reduction in methane intensity and 35-45% reduction in flaring intensity.
How does the company approach Angolanisation and knowledge transfer in Angola?
Local content has always been important to ExxonMobil and we see it as an important role we play in the communities where we operate. I am proud to say that in our current organisation in Angola, we are at 94% Angolanisation. We have Angolans working in other countries, which contributes to their development, but also allows Angolans to contribute beyond what we do in Angola. We have also seen some in our organisation venture out to new opportunities outside ExxonMobil. While we do not like to see our great people depart, I do take pride in our local content development when I see some of our former employees now in prominent positions within the Agency, Sonangol, or in other Angolan companies making a positive impact.
How can local content best be implemented?
Developing our employees is essential to our success. It is also essential to our success that we employ people in the countries or communities where we operate. Where we enter new countries, we need foreign worker expertise while our local workforce develops necessary skills and competencies to be successful.
Governments also play an important role in setting expectations, but it is important that regulations are predictable and consistent and do not interfere with delivering a fair marketplace where businesses compete and are successful based on performance and cost competitiveness. Local content is sustainable when local businesses come about from owners who have learned and understand the business and know how to compete and deliver quality services or products at a competitive cost.
How important will Angola be for ExxonMobil in the coming years?
We continue to focus on maximising value for Angola and our investors through our operations in Block 15. We are also investors in blocks 17 and 32. Across these three blocks, ExxonMobil invests in three concessions that contribute around 60% of Angola’s total gross oil production today. Looking into the future, we are excited about our three Namibe blocks, which represent an important asset in our global exploration portfolio. We are the operator and Sonangol is our partner. Namibe is on a longer-term horizon but very exciting for our employees as we look into the future.
In February 2021, ExxonMobil appointed Melissa Bond as the new lead country manager for ExxonMobil in Angola, to be based in Luanda. Bond was previously the development manager for the company’s Delaware Basin in the Permian. She began her career with ExxonMobil in 2001 as a subsurface engineer based in Halifax, Nova Scotia, Canada. She has held a variety of technical and supervisory roles in strategic planning, drilling and development planning across Canada, Papua New Guinea and the USA.