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Angola Oil Round on Hold for at Least 12 Months

Source: Reuters 12/22/2009, Location: Africa

Angola will not hold a bidding round for new oil concessions for at least another year, the head of state-owned oil company Sonangol said. Despite growing interest from foreign oil firms in one of Africa's top oil producers, Manuel Vicente said that Sonangol would first study its deepwater basins. The last oil bidding round was suspended before 2008 parliamentary elections.

"It won't be in the next 12 months," Vicente told reporters on the sidelines of an OPEC meeting in Luanda.

"We are still studying the basins," he added. "When the studies are concluded we are going to call for the round. Until then, no. There is no reason for rush."

Angola's Oil Minister Jose Botelho de Vasconcelos had said a new bidding round would take place soon.

Chevron Corp, Total and Exxon Mobil, which together account for around two thirds of Angola's oil output, have all said they were interested in bidding for new oil blocks.

Domestic oil output is expected to remain steady over the next year at around 1.9 million barrels per day but Sonangol will continue to expand abroad in 2010 with a war chest of nearly $1 billion.

The company won deals to develop two oilfields in Iraq earlier this month, has a growing presence in Brazil and is looking to start exploring for oil in the tiny African island state of Sao Tome e Principe.

Sao Tome will call its first oil licensing tender in the first quarter of 2010.

"We are already in Brazil, we are trying to be in Ecuador. Sao Tome, yes, we are there. There is a very good cooperation with the government and we will keep developing our activities there," he said.

Sonangol also plans to list one or more of its subsidiaries on the stock markets of Luanda, Johannesburg and New York but it will first need to audit its accounts, said Vicente.

"We are preparing the company for the stock exchange," he said. Asked when the listing would take place, Vicente replied: "We have to put our accounts on international standards and after that we will go. I think it's 2012." Vicente denied there was friction between Angola and China after Sonangol blocked a deal Marathon Oil Corp had struck in July to sell a 20 percent stake in an offshore oil block in Angola to two Chinese companies.

Sonangol later bought the stake itself for the same price, $1.3 billion.

"There is no problem with the Chinese company, we are still in a joint-venture with the Chinese company," Vicente said. "What we try to amend was only procedure.

"The reserves belong to Angola, it doesn't belong to Marathon. If Marathon wants to give up it has to give back to the Angolan government and it's the Angolan government that has to decide who will come after," he said.

Sonangol, which is already a partner in the Angola Block 32, exercised its right of first refusal, effectively blocking China's CNOOC International Ltd. and Sinopec International Petroleum Exploration and Production Corp from buying the stake.

The move doubled Sonangol's stake in the high quality oil-bearing reservoirs to 40 percent from 20 percent.

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