Shell has increased its presence in Angola's frontier deepwater areas by acquiring stakes in two Chevron-operated blocks in the Lower Congo basin. This move aligns with renewed industry interest in the country's deep and ultra-deepwater plays.

Recent Strategic Agreements

In November, Shell, alongside Equinor and Sonangol, signed an agreement for risk service contracts on deepwater blocks in the Kwanza basin. That deal included an option to control a vast 50,000 square-kilometre area known as Ultra Deepwater West (UDDW) in the Lower Congo and Kwanza basins.

Latest Farm-In Details

The latest transaction involves Shell farming in to Blocks 49 and 50 in the Lower Congo basin. Following Angolan government approval on Christmas Eve, Chevron will assign a 35% interest in each block to Shell. The post-transfer ownership will be Chevron (45% and operator), Shell (35%), and Sonangol (20%).

Block Characteristics

Block 49: This undrilled 4,340 square-kilometre block flanks the eastern boundary of UDDW and lies south of the relinquished Block 48. It is located west of producing fields in Block 32. Parts of its northern and eastern areas have 3D seismic coverage, with water depths ranging from 2,100 to over 3,850 metres.

Block 50: This 5,220 square-kilometre block, located south of Block 49, borders Block 33 to the east. It has no 3D seismic data, and water depths range from 2,400 metres to over 4,000 metres.

Company Statements and Rationale

A Shell spokesperson confirmed the government-approved farm-in, stating it aligns with the company's capital investment plans of $12-$14 billion annually in its integrated gas and upstream business to grow production. The spokesperson emphasized disciplined investment in new exploration, such as in Angola, is crucial for sustaining production into the 2030s. A Chevron spokesperson also confirmed the agreement, noting it is subject to regulatory approval.

Additional Context

Separately, last month Angola approved a production sharing contract for onshore Kwanza basin block KON 14 to Nigeria's Ace Energy & Power Consultants.