Red Sky is also eyeing production from the Cegonha oil discovery. (Image source: Adobe Stock)
Australia-based production and exploration company Red Sky Energy turns to Angola to advance expansion and diversify asset portfolio as it closes a risk service contract (RSC) with the Angolan National Agency for Oil, Gas and Biofuels (ANPG) to acquire interests in offshore Block 6/24 alongside ACREP Exploracao Petrolífera SA and Sonangol Exploracao e Producao SA
Sonangol E&P is the operator of the Block 6/24 with a 50% participating interest. Red Sky Energy will hold a 35% participating interest, and ACREP will hold the remaining 15% participating interest. Block 6/24 is located 12 kilometres offshore Angola in the Kwanza Basin, in water depths ranging from 70 to 80 metres. The Block is covered by 1,531 sq km of 2D seismic and 1,465 sq km of 3D seismic.
"Over the past few years, Red Sky has been evaluating opportunities to acquire producing or near-production assets. The company is actively pursuing prospects created by major energy companies' global shift away from fossil fuels. The signing of the RSC Block 6/24 marks our first entry into Angola and is a transformational milestone for Red Sky. Block 6/24 contains a potential commercial oil discovery that the JV partners plan to evaluate for early production and cash flow generation. The Block also has substantial resource potential based on the existing 2D and 3D seismic data. The JV partners plan to prove up these resources, further improving the economics of the Block. Several parties have expressed interest in providing 100% project finance for the development. This transaction enhances our asset base with a high prospectivity offshore block and provides substantial diversification benefits, complementing our Innamincka gas and Killanoola oil projects in South Australia. This strategic move positions Red Sky for sustained growth and stability by balancing our investment portfolio across different geographical regions and resource types,” said Red Sky managing director, Andrew Knox.
Angola's exploration and production industry continues to see global interests with Sequa Petroleum being one of the latests to acquire stakes in the region last October.
Cegonha discovery
Red Sky is also eyeing production from the Cegonha oil discovery within the block, which can bring in substantial promise for the company.
Once the RSC gets approval from the Angolan Parliament, a Joint Venture Operating Agreement (JVOA) will become applicable to designate roles, responsibilities and operational framework. The first three years will be devoted to seismic reprocessing and detailed subsurface evalutaion. The contract also includes scope for an optional well decision which will come into effect on the fourth year based on the studies conducted.
The RSC is valid for a six-year exploration and appraisal period which extends to another 30 years only if comercial discovery is feasible.
ANGP is inviting tenders for as many as 10 offshore blocks this year.
