Legacy Deepwater Discoveries in Angola Await Development

The recent sanctioning of Azule Energy's Greater PAJ project offshore Angola demonstrates how President Joao Lourenco's administration has revitalized the upstream sector, striving to maintain production above 1 million barrels per day. The PAJ project will exploit five discoveries that remained untouched for nearly two decades, representing just a fraction of the many dormant deepwater finds in Angolan waters that have been hindered by the lack of suitable development conditions.

Key Factors Enabling PAJ's Progress

The PAJ project's advancement after a long hiatus offers a real-world lesson in what can be achieved when governments and explorers show flexibility to reach mutually-beneficial outcomes. Originally operated by BP and stalled for years, the project became commercial under BP's Azule Energy joint venture with Eni. Crucial to this decision was the introduction of fiscal incentives by the Lourenco administration, which were generous enough to boost viability yet restrained enough to ensure benefits for Angola. For Azule, these measures encouraged the development team to reduce unit development costs and improve margins.

Expansion and Future Potential

Originally designed to exploit the Palas, Astraea, and Juno discoveries in Block 31, Azule revised the plan to include two additional finds—Urano and Dion—to enhance resources and project economics. The creation of a commercially viable project at PAJ offers hope that a long list of discoveries in blocks 31, 32, and 16, dormant for at least 15 years, could still be developed. In northern Block 31, the PSVM FPSO already exploits the Plutao, Saturno, Venus, and Marte discoveries, with PAJ's five finds expected to begin production in 2029. However, many legacy discoveries remain undeveloped, including Hebe, Tebe, Ceres, and Oberon near PAJ, as well as Miranda, Cordelia, Titania, Portia, Terra, and Leda near the PSVM vessel.

Similar Situation in Adjacent Blocks

In the adjacent, TotalEnergies-operated Block 32, six fields (Gengibre, Gindungo, Caril, Canela, Mostarda, and Louro) are flowing oil and gas to the Kaombo South and North FPSOs, but a slew of legacy finds—including Cominhos, Colorau, Manjericao, Cola, Salsa, and Alho—remain unexploited. With TotalEnergies granted an extension to 2043 for this block, it may develop these resources, possibly in combination with three other discoveries (Chissonga, Cubal, and Zenza) in Block 16, which it also operates. Additionally, sub-surface data from Angola's upstream regulator has identified multiple undrilled prospects in Block 32 that could be targeted, with successful exploration potentially triggering a new project.

Fiscal Foundations and Next Steps

Angola's government has laid fiscal foundations through its Incremental Production Law, designed to encourage investments in such assets. The next step requires Azule and TotalEnergies to revisit their original feasibility studies for these legacy finds and pursue new subsea or standalone projects.