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Angola bets on gas as oil dips

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Daily gas production seen rising above 20% by 2030

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Azule Energy eyes second gas-specific well

By Wendell Roelf

CAPE TOWN, August 14 (Reuters) - Optimistic over

Angola's untapped gas potential, Azule Energy is considering

another gas exploration well after leading the country's first

drilling campaign targeting gas and hitting success last month,

the CEO told Reuters.

Angola expects gas production to rise more than 20% in the next

five years as it targets higher exports to Europe and Asia and

to meet growing domestic demand, while its oil output stagnates

despite the country exiting OPEC.

Sub-Saharan Africa's second-largest crude producer after

Nigeria, Angola is pivoting towards natural gas to help drive an

industrialisation programme based on favourable investment

terms.

"Given that Angola has a couple of prolific basins, I can

imagine that we will be able to find much more reserves of gas,"

said Adriano Mongini, chief executive of Azule Energy, a joint

venture between BP and Eni.

Responding to emailed questions, he said a second well could

be drilled within two years and existing infrastructure close to

the first gas discovery, Gajajeira-01, may aid its development.

Initial estimates show Gajajeira-01 exceeding one trillion

cubic feet (tcf) of gas and having up to 100 million barrels of

condensate, a press statement said.

The latest government data showed natural gas exports

totalled 1.35 million metric tons in the second quarter, up

19.1% from the first quarter. Liquefied natural gas accounted

for most exports, with India and Spain the top two markets.

Gas revenues, however, are a fraction of Angola's crude oil

sales of $5.6 billion over the same period, as the oil

export-reliant country also faces discontent over efforts to

reduce domestic fuel subsidies.

Angola's gas output was seen rising to 3,659 million

standard cubic feet a day (MMSCFD) by 2030 from 2,973 MMSCFD

this year, national oil and gas agency ANPG forecast, although

the average this year might fall short, said some analysts.

Chevron's ( CVX ) Sanha Lean gas project and the Azule-led New Gas

Consortium (NGC) will help lead higher output efforts, the

government said.

"Development of (NGC's) Quiluma and Maboqueiro fields, due

to launch around end-2025, is the real litmus test for gas

monetisation in Angola," said Jimmy Boulter, an Enverus analyst.

Unlike gas, oil output will decline to just above 1 million

barrels a day by 2027 from around 1.1 million bpd now, ANPG

officials told Reuters, adding the reduced level could be held

if investment and development plans are maintained.

Angola anticipates $60 billion in oil and gas investments

over the next five years, with 23 exploration wells expected to

be drilled, 11 of them offshore.

Recent projects, including Azule's 120,000 bpd Agogo FPSO that

started producing oil in July and TotalEnergies' 60,000 bpd bump

have temporarily boosted Angola's oil profile.

"We expect post-2030 oil production to decline

significantly," David Thomson, a Welligence analyst, said.