Italy’s oil and gas major Eni said on Wednesday that it had made a major oil discovery in Angola’s deepwater in a find that could help the African OPEC producer to reverse the recent decline in oil production.
Eni struck oil in Block 15/06 in the Agogo exploration prospect and estimates that the discovery contains 450-650 million barrels of light oil in place with further upside.
The data acquired from the well indicates a production capacity of more than 20,000 bpd, Eni said, noting that this was the third commercial discovery in Block 15/06. Now Eni and its joint venture partners in the block, Sonangol P&P and SSI Fifteen Limited, will work to appraise the discovery and begin studies to fast track its development.
Eni, a key player in Africa and in Angola, currently produces around 155,000 barrels of oil equivalent per day in Angola.
The African country, however, has been struggling in recent years to offset a decline in production as many fields mature.
After the oil price crash of 2014, Angola’s economy had suffered from the low oil prices and the country had also been struggling to attract international investments in its deepwater higher-breakeven oil resources.
Last year, Angola introduced several new measures to try to boost its oil production and its attractiveness for international investment. President Joao Lourenco signed in the summer of 2018 a decree to create an agency that would sell and manage oil blocks instead of state oil firm Sonangol.
Earlier in 2018, Angola halved the tax rates on the development of oil discoveries with fewer than 300 million barrels of reserves. Angola cut the petroleum production tax on so-called marginal fields—those with below 300 million barrels of reserves—to 10 percent from the typical 20 percent tax. The tax reforms also halved the petroleum income tax on marginal fields to 25 percent from 50 percent.
According to OPEC’s figures, Angola’s crude oil production in January 2019 averaged 1.416 million bpd, down by 75,000 bpd compared to December 2018, despite the fact that under the new OPEC+ deal, Angola’s cap is at 1.481 million bpd—higher than its production in January.