Angolan offshore forward

Were you disappointed by the cancellation of the onshore blocks?
We are disappointed, but nothing is lost, it is more of a delay. They will re-tender it surely and award the blocks to existing or new contenders; at some point those blocks will come back on line for exploration, drilling and production. Weatherford worldwide is renowned for onshore work, and we are more than happy to bring the technology we use overseas to Angola.
The framework legislation for onshore blocks has to be well defined. The blocks were awarded, but in terms of infrastructure, there is a need for the government to provide some for the operators to have access and work on those land blocks. It will come and sooner than we expect. Weatherford has enough technology for exploration, drilling and production to help in that field. We are operating globally and ready to mobilise wherever we are needed.

Do you feel optimistic that the new leadership at Sonangol will be more receptive and willing to make the necessary investments to help both operators and oilfield services companies to increase production?
I believe a lot. The new leadership is new in this role but veterans of Sonangol and the industry. They have been there for a long time and know both the market and industry; the new leadership knows what needs to be done. We are therefore confident that they will introduce the right guidance and implement the right directives to bolster the industry.
One thing to highlight is the presidential committee that worked on policies with all the IOCs to improve the oil industry. Any of the five key subjects that the committee is working on, if they are implemented, will improve the situation in the country and help Weatherford to provide additional added value in the country.
We are waiting to know more about the legislation around well abandonment so we can provide additional services for that. That is one of the areas that Weatherford does well in the North Sea. It is the same as deepwater Angola, so we can do well there as well.
The fiscal terms are the second point. Anything that is improved there will incentivise the IOCs more and they will provide us with more work. Faster contract approval will help as well. In 2017, we could not do as much as we would have because the operators could not approve or have the contracts approved faster. Gas and non-associated gas is another area where a decision made may help IOCs. Any of these points will help the country and will help a service company such as ours.
Faster contract approval and a remedy to the forex situation are the two areas that need to be prioritised as far as we are concerned. Right now we have problems with suppliers and our internal sister companies, who cannot continue funding equipment for us, and we cannot pay. Those issues being addressed will be very fine for us.

Is USD 65 per barrel the price at which people can operate well?
That price is good for the operators and good for the country because it brings revenue. We are interested in services. At a higher barrel price, oil operators sell more, want to drill more and call service companies more. If it is lower, then we have less work. To operate at that price, the operators need to be more efficient and control their costs. To continue in that way, operators need fewer costs of ownership and fewer in-country costs. There needs to be better cost efficiency for operators, as most remind us, and the impact of that for service companies is to provide more for less cost.

How do you see the oilfield services market in 2018?
There are a few different ways to look at 2018. When we started budgeting for it, we looked at the trend of what the international companies say they will spend in Angola. For 2018, the numbers were really inferior until October. In other words, IOCs’ spend trend showed they would spend less in Angola than in 2017.
The second thing is that now that we have these presidential decrees and other measures that will be implemented, this trend may differ in 2018. Better news is being sent in the market and new contracting prospects. For example Eni have signed up for new projects such as Cabinda North; there are planned additional work and exploration opportunities with Total. We do not know what is around the corner, yet we want to remain positive for 2018.

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