Le cas de l’Angola, Syanga Abilio, SONANGOL

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Information about Le cas de l’Angola, Syanga Abilio, SONANGOL

Published on July 17, 2008

Author: EPetrilli

Source: slideshare.net

Description

International Oil and Gas Resource Management Seminar, April 27-30, 2008; held in Libreville, Gabon

ANGOLA: BIDDING PROCESS ON NEW BLOCKS Sonangol, E.P. April/08

AGENDA Angola Overview Angolan Petroleum Industry SONANGOL – the Angolan National Oil Company Current Petroleum Activity Petroleum Legislation License Terms The New Momentum – Transparency Bidding Process

Angola Overview

Angolan Petroleum Industry

SONANGOL – the Angolan National Oil Company

Current Petroleum Activity

Petroleum Legislation

License Terms

The New Momentum – Transparency

Bidding Process

Angola Overview Republic: multiparty democracy Chief of State: President Jose Eduardo Dos Santos Population: 14,000,000 Area: 1,246,700 km 2 Coastline: 1,600 km Legal system: based on the European Continental law

Republic: multiparty democracy

Chief of State: President Jose Eduardo Dos Santos

Population: 14,000,000

Area: 1,246,700 km 2

Coastline: 1,600 km

Legal system: based on the European Continental law

Angolan Petroleum Industry Angola is sub-Saharan Africa’s second largest oil producer; Petroleum History: The prospecting and search for hydrocarbons in Angola began in 1910; 1st Exploratory Well: 1953; 1st Discovery: 1955; 1st Production: 1956; Current Production & Reserves/Resources: >1.900.000 BOPD (Production) 13,8 MMBO, 11.5 TCF for the Angola LNG project alone (Reserves)

Angola is sub-Saharan Africa’s second largest oil producer;

Petroleum History:

The prospecting and search for hydrocarbons in Angola began in 1910;

1st Exploratory Well: 1953;

1st Discovery: 1955;

1st Production: 1956;

Current Production & Reserves/Resources:

>1.900.000 BOPD (Production)

13,8 MMBO, 11.5 TCF for the Angola LNG project alone (Reserves)

SONANGOL SONANGOL is Angola’s National Oil Company; It was established in 1976 and made the sole concessionaire for exploration and production since 1978; SONANGOL’s prime objective is the prospecting, appraisal, development, production, transportation, commercialization of liquid and gaseous hydrocarbons and their derivatives, including petrochemicals; In E&P, SONANGOL works with foreign companies through both unincorporated joint ventures (JVs) and production sharing agreements (PSA´s); SONANGOL’s goal is to boost production up to 2 million BOPD by 2008.

SONANGOL is Angola’s National Oil Company;

It was established in 1976 and made the sole concessionaire for exploration and production since 1978;

SONANGOL’s prime objective is the prospecting, appraisal, development, production, transportation, commercialization of liquid and gaseous hydrocarbons and their derivatives, including petrochemicals;

In E&P, SONANGOL works with foreign companies through both unincorporated joint ventures (JVs) and production sharing agreements (PSA´s);

SONANGOL’s goal is to boost production up to 2 million BOPD by 2008.

Current Petroleum Activity SONANGOL governs its core business operations based on the full integration of the following segments: Oil Concessions – includes negotiation of offshore and onshore oil concessions and the post-contract supervision of related economic and technical issues; Exploration & Production – includes all activities related to oil and gas exploration and production; Refining, Marketing and Shipping – these include the refining, marketing, shipping and distribution of crude and its derivatives.

SONANGOL governs its core business operations based on the full integration of the following segments:

Oil Concessions – includes negotiation of offshore and onshore oil concessions and the post-contract supervision of related economic and technical issues;

Exploration & Production – includes all activities related to oil and gas exploration and production;

Refining, Marketing and Shipping – these include the refining, marketing, shipping and distribution of crude and its derivatives.

Petroleum Legislation Petroleum exploration and production activities are governed by The Petroleum Activities Law No. 10/04 on Petroleum Activities of 12 November 2004 (the 2004 Petroleum Law), which replaces Law No. 13/78 of 26 August 1978 (the 1978 Petroleum Law); The 2004 Petroleum Law vests ownership of hydrocarbons in the state (in accordance with the Angolan Constitution) and establishes that only the National Oil Company, SONANGOL, may hold petroleum rights; SONANGOL is authorized to enter into associations with foreign oil companies to carry out petroleum operations in relation to defined concession areas;

Petroleum exploration and production activities are governed by The Petroleum Activities Law No. 10/04 on Petroleum Activities of 12 November 2004 (the 2004 Petroleum Law), which replaces Law No. 13/78 of 26 August 1978 (the 1978 Petroleum Law);

The 2004 Petroleum Law vests ownership of hydrocarbons in the state (in accordance with the Angolan Constitution) and establishes that only the National Oil Company, SONANGOL, may hold petroleum rights;

SONANGOL is authorized to enter into associations with foreign oil companies to carry out petroleum operations in relation to defined concession areas;

Petroleum Legislation In practice, SONANGOL, in nearly all cases, enters into Production Sharing Agreements. Fiscal law; Customs Law; Decree n º 48/06 that regulates the bids for oil concessions and tenders for goods/services supply; Executive Dispatch from the Petroleum Ministry regarding the Goods and Services Contract Regime Decree 20/82 – Training Decree;

In practice, SONANGOL, in nearly all cases, enters into Production Sharing Agreements.

Fiscal law;

Customs Law;

Decree n º 48/06 that regulates the bids for oil concessions and tenders for goods/services supply;

Executive Dispatch from the Petroleum Ministry regarding the Goods and Services Contract Regime

Decree 20/82 – Training Decree;

License Terms Area: Concession areas are defined by the Minister of Petroleum, by executive decree; Duration: The exploration and production periods are established in the concession decree and normally are, respectively, 6 and 20 (shallow water) or 25 (deep and ultra deep water) years. Relinquishment: There are no relinquishment requirements during the exploration period. At the end of the exploration period all areas other than development areas or areas in which appraisal work is progressing must be relinquished; Exploration Obligations: Minimum obligations are biddable and are specified in terms of expenditure, seismic and number of exploration wells.

Area: Concession areas are defined by the Minister of Petroleum, by executive decree;

Duration: The exploration and production periods are established in the concession decree and normally are, respectively, 6 and 20 (shallow water) or 25 (deep and ultra deep water) years.

Relinquishment: There are no relinquishment requirements during the exploration period. At the end of the exploration period all areas other than development areas or areas in which appraisal work is progressing must be relinquished;

Exploration Obligations: Minimum obligations are biddable and are specified in terms of expenditure, seismic and number of exploration wells.

The New Momentum Transparency The 2004 Petroleum Law establishes that all new concessions can only be awarded through public bidding processes, i.e, direct negotiations to award new concessions are only permitted by law in limited situations; All oil companies, national and foreign, with proven financial and technical capacity can participate in the licensing rounds; The proposals are opened all at the same time, by a joint juror that integrates representatives from SONANGOL and the Angolan Petroleum and Finance Ministries; The Blocks are offered to the companies that present the best offers.

The 2004 Petroleum Law establishes that all new concessions can only be awarded through public bidding processes, i.e, direct negotiations to award new concessions are only permitted by law in limited situations;

All oil companies, national and foreign, with proven financial and technical capacity can participate in the licensing rounds;

The proposals are opened all at the same time, by a joint juror that integrates representatives from SONANGOL and the Angolan Petroleum and Finance Ministries;

The Blocks are offered to the companies that present the best offers.

The New Momentum Transparency Few Negotiable terms in the PSA, to allow: Multiple blocks to be bided at same time; Shorter negotiation periods. Promotion and integration of Angolan private oil companies e.g. local content.

Few Negotiable terms in the PSA, to allow:

Multiple blocks to be bided at same time;

Shorter negotiation periods.

Promotion and integration of Angolan private oil companies e.g. local content.

BIDDING PROCESS Partner of the National Concessionaire Public Bidding Direct Negotiation

Partner of the National Concessionaire

BIDDING PROCESS Based on Decree nº 48/06 Establish the rules and procedures of public bidding to: Attract news investments Come into competition on the open blocks Reduce the monopoly 1. PUBLIC BIDDING

Based on Decree nº 48/06

Establish the rules and procedures of public bidding to:

Attract news investments

Come into competition on the open blocks

Reduce the monopoly

BIDDING PROCESS Phase A Define objective . Whom to attract (National or International Compªs) . Increase income . Develop work programme . Develop national content . Offshore or onshore areas Select Blocks . Offshore and Onshore . Size . Complexity Define Economic and Contratual Strategy . Evaluate the blocks to identify the potencial . Estimating the reserves and geological risks . Creating tecnhical cenarios . Estimate the exploration, development and operational costs . Fiscal analysis PREPARATION OF BIDDING PROCESS

Phase A

Define objective

. Whom to attract

(National or International Compªs)

. Increase income

. Develop work programme

. Develop national content

. Offshore or onshore areas

Select Blocks

. Offshore and Onshore

. Size

. Complexity

Define Economic and Contratual Strategy

. Evaluate the blocks to identify the

potencial

. Estimating the reserves and geological

risks

. Creating tecnhical cenarios

. Estimate the exploration, development

and operational costs

. Fiscal analysis

BIDDING PROCESS Data Package Technical information of E&P data from Angola´s blocks and sedimentary basins is provided. Pré-Qualification . Announcement of requi- rements for Pre-Qualifica- tions and limite date to present the information. . Informations´ analysis . Publication of Pre-Qualifi- cations results. MANAGEMENT OF BIDDING PROCESS Bidding Promotion . Nacional newspaper . Sonangol website . International magazines . Roadshows Terms of Reference . Define contractual terms to bid . Announcement of the Terms of Reference Phase B

Data Package

Technical information of

E&P data from Angola´s

blocks and sedimentary

basins is provided.

Pré-Qualification

. Announcement of requi-

rements for Pre-Qualifica-

tions and limite date to

present the information.

. Informations´ analysis

. Publication of Pre-Qualifi-

cations results.

Bidding Promotion

. Nacional newspaper

. Sonangol website

. International magazines

. Roadshows

Terms of Reference

. Define contractual terms

to bid

. Announcement of the

Terms of Reference

BIDDING PROCESS Proposals . Receptions of proposals . Public open bids Analysis . Technical bid evaluation . Economic bid evaluation . Final analysis and bid ranking Results . Winners selected . Winners approved . Approval of Contractor Group (by Government) . Public announcement EVALUATION OF PROPOSALS Phase C

Proposals

. Receptions of proposals

. Public open bids

Analysis

. Technical bid evaluation

. Economic bid evaluation

. Final analysis and bid ranking

Results

. Winners selected

. Winners approved

. Approval of Contractor Group

(by Government)

. Public announcement

BIDDING PROCESS Preparation for Negotiation . Create Negotiation Team . Consider Government and Comp anies perspectives . Create negotiaton targets . Plan negotiation strategy NEGOTIATION Negotiation of PSA . Open Negotiation Explain Sonangol´s position . Identify areas of agreement and difference . Seek solutions . Feedback progress to management . Report to Council of Ministers for approval . Publication of decrees . Sign PSA Phase D

Preparation for Negotiation

. Create Negotiation Team

. Consider Government and Comp anies

perspectives

. Create negotiaton targets

. Plan negotiation strategy

Negotiation of PSA

. Open Negotiation

Explain Sonangol´s position

. Identify areas of agreement and difference

. Seek solutions

. Feedback progress to management

. Report to Council of Ministers for approval

. Publication of decrees

. Sign PSA

BIDDING PROCESS 2. DIRECT NEGOTIATION Just can occur: Immediatly after the public bid where there was no proposals Immediatly after the public bid where the proposals differ from previously defined terms If the Concessionaire receives just one proposal for a given block

Just can occur:

Immediatly after the public bid where there was no proposals

Immediatly after the public bid where the proposals differ from previously defined terms

If the Concessionaire receives just one proposal for a given block

THANKS FOR YOUR ATTENTION

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