bp and Eni JV Azule Energy Starts Angola Operations

bp and Eni JV Azule Energy Starts Angola Operations

/ Oil & Gas / Wednesday, 03 August 2022 10:08

Azule Energy – the new 50/50 independent joint venture of bp and Eni, combining the two companies’ Angolan businesses – has begun operations, the companies have announced.

Azule Energy is now Angola’s largest independent equity producer of oil and gas, holding 2 billion barrels equivalent of net resources and set to grow to approximately 250,000 barrels equivalent per day (boe/d) of equity oil and gas production over the next 5 years. It holds stakes in 16 licenses (of which 6 are exploration blocks) and a participation in Angola LNG JV. Azule Energy will also take over Eni’s share in Solenova, a solar company jointly held with Sonangol, as well as the collaboration in the Luanda Refinery.

In 2021 bp’s total production in Angola was approximately 100,000 boe/d and  Eni’s total production there was approximately 100,000 boe/d. Both bp and Eni’s equity share of Azule Energy’s production is expected to be approximately 100,000 boe/d.

Azule Energy boasts a strong pipeline of new projects that will come on stream over the next few years, growing organically from exploration discoveries. These include the Agogo Full Field and PAJ oil projects in Blocks 15/06 and 31 respectively, and the New Gas Consortium (NGC), the first non-associated gas project in the country, which hopes to support the energy needs of Angola’s growing economy and strengthen its role as a global LNG exporter.

The JV also holds significant exploration acreage in excess of 30,000 square kilometers in Angola’s most prolific basins, allowing it to leverage proximity with existing infrastructure.

Eni and bp share common goals for Azule Energy in achieving environmental and sustainability ambitions. The main assets transferred to Azule Energy are: 

  • From bp: operated Blocks 18 and 31 offshore Angola, and non-operated stakes in blocks 15, 17, 18/15, 29 and NGC, and a participation in Angola LNG JV.
  • From Eni: operated Blocks 15/06, Cabinda North, Cabinda Centro, 1/14, 28 and soon NGC. In addition, stakes in non-operated blocks 0 (Cabinda), 3/05, 3/05A, 14, 14 K/A-IMI, 15 and participations in Angola LNG and, prospectively, Solenova JVs.

“A new, strong entity is born, which combines our experience, skills and technologies with those of our partner bp, putting them at the service of the development of Angolan energy resources, with a priority commitment to environmental protection and the growth of local economy,” said Claudio Descalzi, CEO of Eni.

The JV incorporation takes place after the pending conditions were met, among them having secured a third-party financing of $2.5 billion in the form of Pre-Export Financing, and after receiving regulatory approvals.

Bernard Looney, bp’s chief executive, said, “The formation of Azule Energy is an important step for bp, Eni and Angola. Combining our Angolan businesses and drawing on both bp’s and Eni’s expertise, it will continue to safely and efficiently develop Angola’s resilient hydrocarbon resources and pursue new opportunities in oil and gas and other energies. Azule Energy continues our commitment to Angola and will create real value for both the companies and the country.”

Adriano Mongini, CEO of Azule Energy, added, “I feel honoured to be the first CEO of the company. Together with a highly competent and motivated leadership team we are committed to develop the full potential of the company portfolio of development and exploration opportunities. With finance discipline and focus on HSE, Azule Energy will maximize the value of the assets for the benefit of Angola and (...) the shareholders.”

After announcing the intent to form the joint venture in May 2021, bp and Eni worked closely with the Angolan government, and Azule Energy’s formation was subject to all customary governmental and other approvals.  bp and Eni will each retain 50% of Azule Energy in accordance with the shareholder arrangement. Azule Energy will be equity accounted by bp and Eni. Hydrocarbon production and GHG emissions will be reported on an equity share basis.

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