A new, local operator in Angola’s upstream

Angola

Carlos Amaral, then-CEO of Acrep, talks to The Energy Year about the significance of the company’s move into operatorship with the Cabinda South block, the importance of its plans to create power-sector synergies in the block and the potential for gas discoveries in the Block 1/14. Acrep is an Angolan upstream company.

How significant is Acrep’s leap into operatorship with the onshore Cabinda South block?
Becoming an operator was one of the major targets of Acrep. However, instead of starting from scratch by participating in the licensing rounds for blocks, we decided that we should buy an already existing operation.
Since Pluspetrol is a relatively small company and they were thinking of divesting, we decided to acquire this company. We have acquired not only 55% of the rights of the block but also the operations. As of August 2023, it produces 300 bopd, but it is our target to stabilise at 500 bopd in the short run.
Additionally, we are in discussions with Azule Energy to acquire its stake and operator role in the Cabinda North block. That would create a level of scale between the North and South Cabinda blocks, and this is aligned with our strategy of concentrating on onshore Cabinda as operators. We have acquired an onshore drilling rig, which can also be used for further onshore exploration in any basin within Angola.

How important are your plans to create power-sector synergies in the Cabinda South block?
The most interesting thing about the Cabinda South block is its gas-production potential. We want to focus on that, and on the back of this, we want to create Cabinda’s first independent power producer to convert gas into power using a 25-MW thermal power plant, which we hope can be operational by 2025.
This would require an investment of over USD 20 million. The plan is to supply power to the people rather than the local power sector. Angola has a very low level of power consumption, and there is a need for us to fill this gap.

What is the potential for gas discoveries in Block 1/14?
Together with our partner Azule Energy, who is the operator of offshore Block 1/14, we are planning to drill an exploration well in May 2024. We hope it’s going to be a success. We have conducted seismic surveying across the block, and the data shows promising signs in terms of gas reservoirs. The first well we will drill is located 16 kilometres away from the New Gas Consortium assets.
Being able to develop this asset with Azule Energy, a large and experienced company, makes the process much faster and more efficient. We are very excited about Block 1/14.
Gas is the future. We at Acrep understand its link to power production and do not see it as only a commodity to export to international markets. In any case, as more gas discoveries are made and gas production increases, Angola could be looking at a second LNG facility. Regional competition is strong, however. Angola has to compete with existing producers as well as new upcoming ones in, for example, Namibia. It is important to be bold in terms of decisions and investments.

What have been the key pillars of success for Acrep over its 20 years of existence?
I think resilience is the most important factor. Our journey from working in so many blocks and partnering with international oil companies to now becoming an onshore operator is not something that can be properly built in a couple of years. It demands a lot of work, experience and resilience.
Our key milestone has been to transform the market’s idea of Acrep into that of an onshore operator. From here, our gas-to-power ambitions and the opportunities that our onshore rigging operations can support the exploration of other basins represent Acrep’s future.
As a matter of fact, we can say that the Angolan onshore oil and gas industry barely exists. We want to be at the helm of it and assist the country in this new adventure. It is our responsibility as a local company to invest in Angola’s onshore industry. Following our strategy, we look to produce 10,000 bopd by 2028.

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