CABGOC’s upstream achievementsMay 16, 2019
Derek Magness, managing director of Cabinda Gulf Oil Company (CABGOC), talks to TOGY about its upstream development progress, the impact natural gas could have in the country and how recent reforms will help the industry. A subsidiary of Chevron, CABGOC operates the 36-field Block 0 with a 39.2% interest, Block 14 with a 31% interest and Angola LNG with a 36% interest.
How has CABGOC’s footprint in Angola evolved over time?
[Chevron’s] presence in Angola since the 1950s, through our subsidiary Cabinda Gulf Oil Company, demonstrates our strong, long-term commitment to Angola. Southern Africa continues to feature prominently in Chevron’s global strategic plans in both the oil and gas sectors, and demonstrated progress in Angola will further cement its role in the region.
We are proud to be Angola’s largest international energy company employer. Through blocks 0 and 14, which we operate, and our participation in the Angola LNG plant, we continue to have a world-class business operation in Angola that holds significant potential for additional growth and development.
How is the development of Block 0 and the Lianzi Unitisation Zone coming along?
Chevron is supporting base business in Block 0 and continuing to work on the redevelopment of certain fields. We are increasing reservoir management activities, as we believe there is an opportunity for growth in gas in the long term in Angola. Our priority is to deliver low-cost, short-cycle developments to accelerate first oil and increase production.
Chevron is interested in extending the life of the assets in Block 14. Our strategy for Block 14 includes, among other things, a strong BBLT [Benguela, Belize, Lobito and Tomboco fields] queue, the development of an economic opportunity in the north of the DA [development area], as well as drilling new areas.
Chevron is very proud of the Lianzi development. This is the first cross-border development of its kind in Southern Africa. The collaboration and partnership that exists between the government of the Republic of Angola and the government of the Republic of Congo [RoC] allowed Chevron and its partners in both Angola and the RoC to develop a production-sharing mechanism that not only displays the viability of cross-border projects, but is also a demonstration of our partners’ confidence in Chevron’s ability to successfully execute complex projects, all the while creating value for all stakeholders. The Lianzi development should be regarded as a model to be replicated across the Southern African region.
What is the potential for gas development to reshape the E&P value chain in Angola?
Chevron is committed to supporting Angola in its overall strategy for the exploration, development and monetisation of gas in Angola. The newly published gas law provides a framework that should result in increased activity as pertains to gas in Angola. Chevron, together with our ALNG partners, are progressing the non-associated gas development project to maximise gas supply and plant utilisation. Discussions on the formation of a new gas consortium are well advanced.
Additionally, CABGOC is looking at all possible base business gas supply opportunities in our blocks to maximise associated gas supply to the ALNG plant.
As the above activities progress, opportunities will arise to finetune the general definition and understanding of Angola’s E&P value chain as it exists today.
How have key upstream sector reforms impacted the Angolan oil and gas industry?
The creation of the six presidential task forces in 2018 to address poignant industry issues was an experience for us. The government’s openness to dialogue with key industry players resulted in not only agreement on matters such as simplification of procedures that are designed to expedite approvals within the business process, but also resulted in the publication of new legislation, specifically as relates to the exploration and development of gas.
The presidential task forces are a testament to the strong relationship enjoyed between the government and the industry, a joint understanding of the state of the local industry and a common desire to ensure incentives exist that will draw additional investment into the sector. Much has been achieved and it is our understanding that the door of dialogue and collaboration remains open to address future challenges that arise as the industry evolves.
What are the implications of Sonangol’s Regeneration Programme for the future of the oil and gas industry in Angola?
We understand the goals of the overall industry restructuring programme to be a more transparent, efficient and sustainable oil and gas sector for Angola. Sonangol is a critical component of this strategy. Successful implementation of the Sonangol Regeneration Programme should result in a Sonangol that is more focused on its core business, transformed into a more profitable, efficient and agile company of reference on the African continent. We expect Sonangol to emerge a stronger partner for companies looking to do business in Angola and believe Sonangol will continue to be the heartbeat of the Angolan oil and gas sector.
What is your vision for CABGOC’s future?
The future of Cabinda Gulf Oil Company is intrinsically tied to the history of the people of Angola. For over 60 years, and throughout the different phases of Angola’s history, Chevron has maintained world-class operations in the country, bringing value to all our shareholders.
We believe there is still a significant amount of remaining resources in Chevron-operated blocks 0 and 14, and are working diligently with our partners to enable the economic development of this potential. A combination of the maturity of our assets and the structure of our existing contracts requires an innovative approach to the economic development of identified assets.
To effectively pursue these opportunities, Chevron has developed a stacked template structure concept design for MCPs [major capital projects] in Angola. This development concept results in lower cost and shorter cycle time, increasing opportunity, especially for Block 0 fields. Chevron’s top priority is to deliver low-cost, short-cycle developments to accelerate first oil and increase production.
All actors in the Angolan oil and gas sector have an important role to play in ensuring Angola maintains a business environment that remains competitive and continues to attract additional investment. With the support of our partners, we believe that our future, like that of the people of Angola, is bright.
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