ENI FIND ANGOLA'S OIL

PLATTS - Italy's Eni upped its resource estimate at its Angolan offshore field Agogo by over 40% after the drilling of a new well, paving the way for a full field development with a third production hub in Block 15/06.

The Agogo field now has 1 billion barrels of oil in place after the successful drilling of Agogo-3, which "indicates a production capacity in excess of 15,000 b/d", Eni also said Thursday.

Production at Agogo started up in mid-January, just nine months after making the initial discovery. The field was pumping close to 20,000 b/d, Eni said.

Eni and its partners have already started the studies to exploit the full potential of the field through a third production hub, targeting an FID in 2021.

The Italian oil major drilled Agogo-3, the second appraisal well of Agogo discovery in Block 15/06, where it encountered up to 120 meters of net pay of light oil, with a API of 31 degrees.

Prolific block

For now production from Agogo is being shipped via the Ngoma floating production, storage and offloading vessel, or West Hub project, which has a 100,000 b/d processing capacity.

The Agogo crude was supplementing the existing volumes of crude shipped via the FPSO and marketed as Sangos crude. Sangos loadings totaled around 65,000 b/d in 2019, according to S&P Global Platts estimates.

Agogo is just one of several Angolan recent discoveries by Eni which has made five oil discoveries in Block 15/06 in the past year and a half: Afoxe, Agidigbo, Agogo, Kalimba and Ndungu.

Preliminary estimates suggested those finds total more than 2 billion barrels of oil in place, double the volume of previous discoveries in the West Hub and East Hub installations in Block 15.

Eni operates Block 15/06 with a 36.84% stake, alongside state-owned Sonangol (36.84%) and SSI Fifteen (26.32%). The Italian major's net production in Angola is around 145,000 b/d.

Output decline

Angola' Africa's second-largest oil producer, is facing an uphill battle to reverse its crude output decline.

Crude output has fallen from a peak of 1.9 million b/d in 2010 to 1.4 million b/d as production from flagship fields, such as Girassol and Pazflor, has started to flag. Currently, producing fields have an average annual decline rate of 10%-15%, according to Angolan oil ministry officials.

Output has been falling due to technical and operational problems at some fields, aggravated by a lack of upstream investment and incentives.

But interest in Angola's upstream has been growing after Sonangol sweetened the fiscal terms of its contracts in order to revive the country's oil industry, giving international oil companies improved returns.

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