"We have a well-defined ambition in Angola. We want to be operator, it is as simple as that," says Bjørn Rasmussen, StatoilHydro boss in the West African country that has grown into one of the world's largest oil producing states.
And why not - we all know that the future to a large extent lies in the deep water, and the Norwegian company claims to be in the forefront of deep-water exploration and production technology. With deep-water assets offshore Norway, Brazil, Nigeria and in the Gulf of Mexico, it has the necessary experience and the right people to be successful.
"We can see a lot of benefits of turning the company in Angola into an operator," Bjørn continues. "First and foremost we will be in a position to build a highly competent organization. Also, with more responsibility, we will learn more, thereby enabling us to make better decisions for the benefit of both ourselves, our partners, and - above all - for the Angolans."
"Our success on the Norwegian shelf has a lot to do with being an operator. I consider operatorship a prerequisite to continuing our growth and making a better contribution in this country," Rasmussen says.
Plenty of resources - on and offshore
Only six years have passed since the civil war came to an end in Angola. Before that, the country was ridden by unrest and setbacks for 27 years, ever since independence from Portugal in 1975. The result was devastating, and much of the country's infrastructure outside the oil sector was destroyed. The human and social consequences were also enormous, hundreds of thousands of people were killed, tens of thousands were disabled, and several millions were internally displaced. Today, about 70% of Angolans are still living in poverty, only about 30% have regular access to public health and clean water, and infant mortality is among the highest in the world.
The job of getting the country back on track is nothing but overwhelming. Driving in Luanda, the capital, you get the impression that they are trying - hard. The traffic itself is horrendous, but there is a lot of activity going on, and the ever-present construction work proves that there will be a change for the better. It is also encouraging to observe that people are engaged in cleaning the city and making it a better place to live.
Angola is a huge country. It covers 1.25 million km2, equal to France and Germany combined. With 16 million people, the population is, however, quite small. If managed correctly, the plentiful geological resources - offshore oil, onshore minerals (in particular diamonds), fertile soil and plenty of fresh water - mean that the future should be bright. The downside is the enormous need for both capital and expertise.
A key building block
Oil exploration started in earnest back in 1915, but the first discovery was not made until 1955. As of today, production has grown steadily to 1.7 MMbopd (270,000 m3/d), and according to the BP Statistical Review of World Energy, reserves have climbed from 2 Bbo (300 MM m3) in 1987 to 9 Bbo (1,400 MM m3) as of last year. ExxonMobil, Total and BP are the dominant players, with StatoilHydro, following the merger between Statoil and Hydro last year, now emerging as a serious competitor to the supermajors in terms of liquid output.
StatoilHydro has been exploring in Angola since 1991, its first producing asset being Girassol in Block 17, which started producing in 2001. The other main producing asset is Dalia, also in Block 17, operated by Total. The two fields contribute more than half of StatoilHydro's total production in Angola, which is now over 200,000 barrels of equity production per day, representing more than 10% of the total daily production in Angola. StatoilHydro production is expected to continue at this level for the next ten years.
The StatoilHydro asset portfolio now includes six licenses, most of them in deep water, operated by BP, Eni, Exxon, Sonangol and Total, and the company is partner in nine producing fields. However StatoilHydro has serious plans for the future and is investing heavily in exploration. This is why the company has done its homework with respect to the next licensing round and is also looking at every opportunity for farm-ins.
"Angola turns out to be a key building block for StatoilHydro's international production growth," says Rasmussen.
The Petroleum System
"The one thing you really need in order to understand the deep-water petroleum systems and play model of offshore Angola is a world map," says Erik Holtar, Business Development Manager for StatoilHydro in Angola. "Focus on the Congo River. It runs from east to west within an area of abundant precipitation, growing bigger kilometre by kilometre. The erosion is heavy, so that lots of sand, silt and clay are being transported towards the South Atlantic Ocean and dumped on the narrow continental shelf and beyond." Sediments have been carried in this way from the huge hinterland by the massive Congo River for tens of millions of years. The river today is Africa's second largest river in terms of length and has the second largest flow in the world, only behind the Amazon.
"Turbidity currents are responsible for redistributing huge volumes of shales and sand from shallow to deep water, and as time goes by, more sand is fed into the system in channel complexes, giving rise to multiple reservoir horizons ranging in age from Oligocene to Miocene. The basin then subsides because of the extra load, and the section gets thicker, almost day by day," Holtar explains.
This is the simple setting of a passive continental margin that has been evident throughout the Late Cretaceous and the Tertiary. It all started in the Early Mesozoic with the initial splitting of the Pangea supercontinent and the opening of the South Atlantic Ocean in the Early Cretaceous.
"Before the final split when the two continents drifted apart, thick beds of salt were deposited in a narrow basin. Later, in the drift phase, the salt started moving in response to tilting of the shelf. Salt pillows and diapirs developed, thereby generating traps with all kinds of curious shapes that can barely be imagined."
The main source rock of the Angolan shelf is of Late Cretaceous age. Organic rich clays were deposited over the entire shelf in an anoxic environment prior to the main input of clastics from the Congo River, as well as rivers along the coast. The maturation history of the source rocks is closely related to the amount of sediment derived from the rivers.
Further subsidence and increased temperatures during the Tertiary have matured these sources and facilitated migration into the reservoir rock, trapping the hydrocarbons in complicated salt-induced structures.
Building a master plan
Bjørn Rasmussen, long time explorationist with Hydro, now resides in Luanda and is responsible for the entire StatoilHydro portfolio offshore Angola. In the next office sits Erik Holtar, Business Development Manager, also a geoscientist with a proven record as New Venture Manager worldwide with Hydro before the merger. Colleagues both in Angola and in Norway have together designed a master plan for how to turn the company from being an active partner to an innovative operator.
"First of all, we are spending lots of time and energy getting acquainted with the local culture. Here, in this country, we are guests and have to behave in a decent way. Humbleness is extremely important to us", Bjørn says.
"It is also important to understand the country's situation, with a civil war just 6 years back in time. This is why we look upon our role as technical assistant during the development of the Gimboa field in Block 4 as very important. I know the importance of knowledge transfer as I was myself an employee of Statoil when we were assisted by ExxonMobil during the development of the giant Gullfaks field in the 1980's," says Bjørn.
Observing the enthusiasm and dedication of the StatoilHydro team in Luanda, we are in no doubt they will succeed and will achieve their goals.
"We realise that it is a lot more interesting to work for an operator. We should be able to attract the best people that way, something that is very important when qualified people are in demand," Bjørn Rasmussen says.