The RSCs lay the foundation for the development of Block 49 and Block 50. (Image source: African Energy Chamber)

A kick-off for the exploration phase, Chevron-subsidiary Cabinda Gulf Oil Company Limited has signed two risk service contracts (RSC) for Block 49 and Block 50 in the ultra-deep waters of Angola’s Lower Congo Basin

Initially awarded the concessions by way of Presidential Decree in January, the RSCs lay the foundation for the development of the blocks. 

Angola remains a coveted destination for oil majors with the latest instance being TotalEnergies' final investment decision (FID) on the Kaminho deepwater project.

While Chevron has been in Angola for 70 years, Block 49 and 50 represents the company’s first operated assets outside of the existing Cabinda concessions. 

Earlier this year, the company signed an agreement with Angola’s national concessionaire – the National Oil, Gas & Biofuels Agency – to conduct seismic surveys in Blocks 49 and 50. 

With interests in Block 0 and 14, which produce an average of 70,000 barrels of liquids per day and 259 million cubic feet of natural gas per day, Chevron enjoys a 26% market share in Angola. 

Block 0, whose concession has been extended to 2050, is comprised of 21 fields, while Block 14 contains nine fields.

By an agreement signed with the government in 2020, Chevron not only received the go-ahead to develop Block 14 with improved fiscal terms, but also a production sharing contract extension to 2028.

Multiple projects

Additionally, in 2023, Chevron signed a production sharing agreement to manage operations within the Block 14/23 concession area.

The concession is situated in the Zone of Common Interest shared by Angola and the Democratic Republic of the Congo, with the agreement seeing Chevron act as operator with a 31% stake in the block.

Chevron holds non-operating interests in the Angola LNG plant as well, which processes gas from offshore concessions, thus generating critical revenue for the country through LNG exports. 

Specifically, the Chevron-operated US$300mn Sanha Lean Gas Connection Project is a strategic initiative that aims to address a supply gap at Angola LNG. The project involves the development of a platform that ties into the existing Sanha Condensate complex and features pipelines connecting Block 0 and 14 to the Angola LNG facility.

During EGYPS 2022, Chevron was recognised for its achievements in equality, inclusion and diversity in the oil and gas industry.

Chevron has also introduced low-carbon solutions across Angola’s oil and gas industry.

The multinational signed an agreement with the government in October 2023 to utilise nature-based and technological carbon offsets and lower-carbon intensity fuels such as hydrogen for enhanced production. 

Strong demand is still expected from the booming petrochemicals sector. (Image source: Adobe Stock)

Oil 2024, the latest edition of the IEA’s annual medium-term market report, forecasts that growth in global demand for oil will slow in the coming years as energy transitions advance, with a major supply surplus emerging this decade

The report forecasts that global oil demand, which including biofuels averaged just over 102mn bpd in 2023, will level off near 106mn bpd per day towards the end of this decade, with growth in demand peaking before 2030.

Speaking at a press briefing, Dr Fatih Birol, IEA executive director, highlighted three major drivers of the slowdown:

1. – Transportation – The increasing penetration of electrical vehicles (EV)s. in China, Europe, USA and increasingly the emerging markets, currently accounting for more than one in five car sales. Dr Birol noted the increasing cost competitiveness of electrical cars in China, the driver of EV car penetration. Ongoing fuel efficiency improvements are also a factor;
2. – Electricity generation – Many of the oil producers in the Middle East and North Africa, who currently use a significant proportion of oil to generate electricity, are shifting to renewables or natural gas for electricity generation;
3. – China – Most importantly, the expected slowdown in China’s economic growth to around 4% from just over 6% a year, given the country has accounted for around 60% of demand growth in the last 10 years.

While strong demand growth is expected from fast-growing economies in Asia, as well as from the aviation and booming petrochemicals sectors, this will not be enough to offset the above factors.

Surge in production capacity

At the same time, a surge in non-OPEC global oil production capacity, led by the USA and other producers in the Americas, such as Argentina, Brazil, Canada and Guyana, is expected to outstrip demand growth between now and 2030, with non-OPEC producers expected to account for three quarters of the expected increase to 2030, or 4.6mn bpd. Saudi Arabia, the United Arab Emirates (UAE) and Iraq are expected to lead a 1.4 mn bpd rise in OPEC+ oil capacity.

Total supply capacity is forecast to rise by 6mn bpd to nearly 114mn bpd by 2030 – a staggering 8mn bpd above projected global demand, the report finds. There is also the prospect of OPEC+ rewinding production cuts from later this year. This would result in unprecedented levels of spare capacity over the forecast period, with major implications for oil markets – including for producer economies in OPEC and beyond, as well as for the US shale industry.

“Some producers are already making adjustments, with Saudi Arabia putting on hold planned oil capacity expansion to focus on gas, which is where we see the main demand this coming decade,” commented Toril Bosoni, the head of the IEA’s Oil Industry and Markets Division. at the press briefing.

“This report’s projections, based on the latest data, show a major supply surplus emerging this decade,” said Dr Birol, noting the consequences of an oversupply would be downward pressure on prices, with implications both for producers and consumers. “Oil companies may want to look at these supply and demand trends and make sure their business strategies and plans are in line with market realities,” he added.

According to the report, global refining capacity is on track to expand by 3.3mn bpd between 2023 and 2030, well below historical trends. However, this should be sufficient to meet demand for refined oil products during this period, given a concurrent surge in the supply of non-refined fuels such as biofuels and natural gas liquids (NGLs). This raises the prospect of refinery closures towards the end of the outlook period, as well as a slowdown in capacity growth in Asia after 2027.

The new engine power plant can run on natural gas and 25 vol% hydrogen blends. (Image source: Wartsila)

Addressing the just transition ideology of Africa, technology group Wärtsilä has introduced a purely hydrogen-ready engine power plant

Guided by the IEA World Energy Outlook 2023 that predicts hydrogen consumption to reach 51 mt by 2050, Wärtsilä's launch establishes the importance of an energy mix. Sustainable fuels like hydrogen and natural gas are significant to balance the fluctuating renewable energy sources. 

Wartsila has been working towards ensuring energy mix since the last few years, when it announced the conversion of the heavy fuel-operated Bel-Air power plant in Dakar to LNG. 

The new engine power plant can run on natural gas and 25 vol% hydrogen blends.

Addressing energy security

Anders Lindberg, president, Wärtsilä Energy, said, “We will not meet global climate goals or fully decarbonise our power systems without flexible, zero-carbon power generation, which can quickly ramp up and down to support intermittent wind and solar.

“We must be realistic that natural gas will play a part in our power systems for years to come. Our fuel flexible engines can use natural gas today to provide flexibility and balancing, enabling renewable power to thrive. They can then be converted to run on hydrogen when it becomes readily available: future-proofing the journey to net zero.

“This is a major milestone for us as a company, and the energy transition more generally, as our hydrogen-ready engines will enable the 100% renewable power systems of tomorrow.”

The Wärtsilä 31 engine platform that is the driving force behind the hydrogen-ready power plant is designed for instant operation, synchronising with the grid within 30 seconds from start command.

Having completed more than 1 million running hours, with over 1,000 MW installed capacity globally, the platform offers unparalleled load following capabilities and high part load efficiency. Its fuel flexibility is hence capable of meeting present challenges of energy security. 

With hydrogen catching up at a rapid pace in Africa, the Wärtsilä 31 engine is all set to hit the markets next year, followed by delivery services from 2026. 

Preliminary evaluation indicated rise in Hibiscus gross recoverable reserves. (Image source: Adobe Stock)

BW Energy announced a substantial oil discovery on the northern flank of the Hibiscus field, post conclusion of the drilling and logging of the DHIBM-7P pilot well

The oil is with good reservoir quality and a material uplift to the Hibiscus area. 

Preliminary evaluation indicated rise in Hibiscus gross recoverable reserves (mid-case) of approximately 8-12 mn bopd. Gross production from the Dussafu licence is approximately 23,200 barrels of oil per day, amounting to a total gross production of approximately 2.14 mn barrels of oil. 

The well will be completed as a development well later in 2024.

First Gamba-Dentale accumulation in Hibiscus 

The DHIBM-7P development adds to BW Energy's previous find in DHBSM-2P pilot well which too revealed good prospects. 

The DHIBM-7P pilot was drilled from the MaBoMo production platform to a total depth of 3,941 metres.

Drilled by the Borr Norve jack-up rig the target area is located approximately 1.5 kms north-northwest of the MaBoMo. 

Notably, the hydrocarbon column extends across the boundary between the Gamba and the underlying Dentale formation.

This is the first example of a common Gamba-Dentale hydrocarbon accumulation in Hibiscus Field.

The current operation in Dussafu is to complete the development well (DHBSM-2H) in the northern flank of the Hibiscus South field that was recently successfully appraised.