Prospects in Angola’s onshoreJune 1, 2021
Tchitalene de Almeida, executive director of Poliedro Oil Corporation, talks to The Energy Year about the latest developments and future prospects at Block 2/05 and the company’s approach to new onshore acquisitions. Poliedro is an oil and gas company with a presence in Angola’s E&P, mining and fuel retail sectors.
How has Poliedro developed Block 2/05 over the past 12 months?
Edson Rodrigues Dos Santos, the new CEO of block operator Somoil, has brought some new oxygen into the Block 2/05 operations and has started doing a major restructuring – cutting costs and overpriced contracts. He presented a plan for 2021 with a reduced cost for production. We have definitely benefited from this.
Now, part of the fruits of his strategy is that we have achieved a joint venture to develop the Espadarte field. We hope that from next year we will manage to start developing Espadarte. Somoil also plans to develop some other fields in the block. Basically, 2020 has been a standby year. However, I believe next year is going to be positive for Block 2/05.
The block is quite old and the biggest struggle is to process what we are producing today because of the age of the infrastructure. Now we are dealing with Espadarte and the big game will be to bring in new technology, in the form of a new FPSO, to take care of all of the production from the block.
What are your aims for 2021 in terms of production from the block?
We recently had two exportations of 50,000 barrels each. One was in June 2019 and the other occurred around the end of December-beginning of January 2020. For 2021, we expect to see volumes go up. We hope to reach an exportation of 70,000 for the year. We can likely achieve more than this, but we’re setting the goal on the safe side.
How optimistic are you about Angola’s ongoing bid round and its Hydrocarbon Exploration Strategy 2020-2025?
Regarding the offshore blocks, as a small company we see these as being more the target of the big players due to the costs involved. We are looking at the onshore blocks because we think there could be an opportunity for us to expand the business. However, we know that we cannot do that alone and to have the opportunity to bid on those blocks we need to have a partner – foreign or internal.
This should be both a financial and technical partnership. We understand that there are some companies that want to come into the Angolan market. However, due to all the setbacks from Covid-19, it hasn’t been possible this year to make any connections.
How difficult do you find attracting capital and establishing international partnerships in Angola?
In 2020, it has definitely been difficult. The message is very clear from the government: It is making an effort to attract foreign companies to invest in the country. However, this effort has been stymied by the Covid-19 situation. Also, with the drawback of oil prices, it hasn’t been easy to attract international funding. This year has been very, very difficult in multiple aspects.
What would an ideal partner look like for Poliedro?
As mentioned, they would have to be both a financial and a technological partner. We have been participating in Block 2/05 as partners but not as operators so we really need the technical side in place in order to take our first steps towards the operations of any block.
Onshore is more technically simple, so it would be a good starting point with which to establish ourselves, after which we can take on bigger projects. I believe it would be in line with government strategy to have a small Angolan company gaining a foothold in those onshore fields and getting more experience. The Angolanisation process starts with the companies, and then the companies can employ local youth to boost the economy.
How is Poliedro enhancing its presence in the country’s downstream sector?
In the downstream, we continue to operate our pump station in the Zango area and we are in the process of opening another small one in the same area. Our new strategic plan for the downstream is to try to open two new pump stations every year.
How do you think the new local content law can offer more opportunities for Angolan companies?
This law is something we needed as a local company, and we definitely want to benefit from it. We feel local companies are being empowered and the government is trying to create the conditions for them to strive and succeed.
However, it’s not good enough to just pass a law. We need to follow up. Now that this law has been implemented, there are institutions in place that need to inspect and check whether the law is being implemented by companies. In the past, a lack of such implementation was the reason why these laws didn’t succeed.
I believe now if they do follow through and do inspections, the local content law has everything it needs to succeed. We have a very strong pool of youngsters coming up who need to get new jobs and with this law, we will be able to fulfil some of those obligations.
What is your vision for the next five years?
For Poliedro, our strategic plan is clear. For the next five years, we are planning to close two acquisitions in the downstream sector.
Regarding upstream and the expansion of Block 2/05, we are putting all of our hopes on the Espadarte field.
We are also diversifying away from oil with a diamond mining project in Melange, where we expect to start operating in January . We’re trying to be a bit more independent from oil, although it will remain our core business.