Angola wants to cash in on the roughly 3 billion cubic feet per day (Bcf/d) of associated natural gas it produces, most of which is now flared, the petroleum minister said on Oct. 9.
The announcement of efforts to generate more revenues by reducing gas flaring comes as Africa’s second largest crude producer faces a fall in output from its mature oil fields.
“Over the years, Angola has somewhat neglected to capitalize on the natural resources that it has to offer,” Mineral Resources and Petroleum Minister Diamantino Azevedo said in a brochure released at an African energy conference in Cape Town.
He said Angola produced about 3 Bcf/d of associated natural gas, or gas found in association with oil in a reservoir.
“Much of this gas was burned or flared and an opportunity for financial recovery was missed, not to mention the damage that was done to the environment,” he said, without giving the precise volume that was flared.
The U.S. Energy Information Administration (EIA) in June said Angola’s total natural gas output in 2016 was 413 Bcf, of which 254 Bcf was flared, 88 Bcf was reinjected and 60 Bcf sold. The EIA cited figures from gas data firm Cedigaz.
Methane that leaks during oil production and CO2 generated when gas is flared are both greenhouse gases.
Angola is developing a $12 billion offshore project to produce 5.2 million tonnes of LNG a year for export. Angola LNG is a partnership of state-owned Sonangol, Chevron, BP, Eni and Total.
“We are in the process of leveraging other industrial projects for gas monetization, such as fertilizer factories,” the minister said.
Angola’s oil ministry said last year crude output could fall to 1 million barrels per day (MMbbl/d) by 2023 from 1.9 MMbbl/d in 2008, unless there was fresh investment.
Under a deal on supply restraint agreed by OPEC, Angola said it was committed not to produce more than 1.6 MMbbl/d of crude.
“The decline in production is the result of the natural process of field maturation and a lack of investment in resource research and preventative maintenance of equipment,” Azevedo said.
To help address this, he said the government was offering onshore and offshore exploration blocks, including the “highly promising yet largely unexplored” interior basins.
The U.S. drilling industry flared or vented more natural gas in 2019 for the third year in a row, as soaring production in Texas, New Mexico and North Dakota overwhelmed regulatory efforts.
U.S. oil production from seven major shale formations is expected to rise about 22,000 barrels per day next month, which would be the smallest monthly increase since shale output declined in February 2019.
Egypt expects investments of at least $750 million to $800 million in the first stage of exploration in the 12 concessions, Petroleum Minister Tarek El Molla said during a press conference.