The prospecting and researching of hydrocarbons in Angola began in 1910 when the company Canha & Formigal was granted the oil lease of an area of 114,000 km2 in the Congo Offshore and the Kwanza Basin. The first well was drilled in 1915.
Pema (Companhia de Pesquisas Mineiras de Angola) and U.S.A. based Sinclair were, from early on, also involved in prospecting and research activity in Angola. After a brief hiatus, activity was resumed in 1952 with a lease to Purfina in the same area. In 1955, the Continental Platform was added to its extension.
Also in 1955, oil was discovered in the onshore Kwanza Valley by Petrofina, which together with the colonial government, established the jointly-owned company Fina Petroleos de Angola (Petrangol) and constructed a refinery in Luanda to process the oil.
In 1962, the first seismic survey of Cabinda's Offshore was carried out by the Cabinda Gulf Oil Company and in September of that same year the first discovery emerged.
In 1973 oil became Angola’s principal export. By 1974 the production reached 172,000 bpd which was the maximum output for the colonial period.
In 1976, total production was around 100,000 bpd from three areas: Cabinda's Offshore, Kwanza's Onshore and Congo's Onshore.
Between 1952 and 1976, 30,500 km of seismic surveys were carried out, 368 wells were drilled for prospecting and research and 302 wells were drilled for oil production. During this period a total of 23 sites were discovered, three of which were offshore.
Exploration in deep water began in 1991 with the leasing of Block 16, followed by leases of Blocks 14,15,17,18 and 20.
Over 200 exploration and appraisal wells have been drilled in Angola since 1990. At the beginning of 2000, there were 29 offshore and onshore blocks under licence to 30 companies and of these 14 were operators.
The first FPSO (Floating Production, Storage & Offloading) rig in Angola's offshore came on stream on December 1999, and was used for project Kuito on Block 14. Since August 2003, the world's largest FPSO came on stream on project Kizomba A on Block 15. Projects in Blocks 17 and 18 also required the use of an FPSO.
To bring an end to the wasteful flaring of gas and to also enable the local production of industrial chemicals, a gas condensate facility to produce liquefied petroleum gas (LPG) is scheduled to come online in 2008.
Numerous discoveries in the Angolan offshore have ensured that Angola will play a major role in Africa’s oil industry for the next few decades and will be a world pioneer in the oil industry.
Angola kept up total oil production in 2007, producing an estimated 1.7 million bpd and is on course for hitting its OPEC quota of 1.9 bpd in 2008. Angola joined the Organization of the Petroleum Exporting Countries last year and was initially exempt from quotas but this changed this year.
Oil continues to dominate the Angolan economy, contributing 90 per cent of the country’s exports and 50 per cent of GDP, which represents 80 per cent of national receipts. And more money is flowing in every year. According to Sonangol chairman and chief executive Manuel Vicente, investment in oil research, exploration and development in Angola could reach $66 billion between 2008and 2011. Much of this money will be used in the development of deep and ultra-deep water concessions awarded in 2005 and 2006.
The value of investment has been steadily increasing since deepwater drilling began almost two decades ago. In the 1990s, the total value of investment in oil was $15.5 billion. So far, $48.3 billion has already been invested this decade.
Angola has 9 types of crude graded internationally as per the following characteristics:
Intermediate crude
- Cabinda Blend: medium viscosity and low sulphur content (32.0o API and 0.12% sulphur), the majority of its production is exported to China.
- Dalia: crude of medium viscosity, sweet (23.65º API and 0.49% sulphur) and semi-acidic (1.56mg KOH/g).
- Girassol: crude of medium viscosity and low sulphur content (API 30.8º and 0.34% sulphur). This blend is made of oil from fields girassol and jasmyn.
- Hungo: medium viscosity and semi-sweet crude (28.5º API and 0.71% sulphur). This crude is made of production from oil fields Hungo and Chocalho on Block 15.
- Kissanje Blend: crude of medium viscosity and medium sulphur content (28.2º API and 0.44% sulphur).
Heavy crude
- Kuito: crude of high viscosity and with medium content of sulphur (19º API and 0.68% sulphur), very acidic (2.1 mg KOH/g). This crude is produced on Block 14.
Light Crude
- Nemba: crude with low viscosity and low sulphur content (38.7º API and 0.19% sulphur), produced on Block 0 which is located in Malango, Cabinda.
- Palanca blend: crude with low density and low sulphur content (37.2º API and 0.18% sulphur), this blend is made of 5 oil fields.
- Xicomba: crude with low viscosity and medium sulphur content (34.8º API and 0.39% sulphur). It's produced on Block 15 and it is exported to the USA.
Cabinda Blend is the standard type for evaluation of crude produced in Angola, it is used for international reference.
Benchmarking Oil Grades
According to the destination of the crude to the various markets worldwide, the price of the oil barrell for a given market is fixed according to energy price quotes for the benchmarking grades.
- Brent Blend (crude from the North Sea) it is the reference in the European oil market for most of the light and sweet crude produced in África, part of the Middle East, North Sean, Mediterranean Sea, Caspian Sea and Russia.
- WTI (West Texas Intermediate) is the reference for the United States market for medium viscosity and relatively low sulphur content oil produced in the USA, South America, part of West Africa, North Sea and Far and Middle East.
- ANS (Alaskan North Slope) the reference for the US market for intermediate and sour crude produced in the USA, South America e part of the Middle East.
- DUBAI and DUBAI/OMAN is the price reference for sales in the Asia-Pacific market for the heavy crude produced in the Far East and for lighter and sweeter crude produced in the Middle East.
- TAPIS is the price reference for the Asia-Pacific market for oil with low sulphur content that is produced in the Far East.
