Two state-run oil companies, Pertamina of Indonesia and CNOOC of China, have decided to end an agreement to bid for stock in Exxon Mobil Corp. The companies had planned to bid on $3.5 billion worth of stock in an Angolan petroleum project.
Once Pertamina revealed plans to buy 80% worth of the venture, leaving CNOOC only 10%. This caused CNOOC to back out, as it had planned to acquire 25% of the stock.
Exxon Mobil is eager to give up its stock in the Angolan petroleum project since the company is no longer in partnership with BP in the deal. Other companies have parts in the Angolan petroleum project, including Sonangol, which has 20%, and BP, which owns another 26%.
Most of the drilling in Angola takes place in offshore Cabinda. Pertamina indicated that it didn't have the technology to drill in the deep sea where the oil is located. Since the CNOOC agreement with Pertamina dissolved, the company seeks another partner to obtain the additional funds needed to allow it to acquire technology for the Angolan project.
BP, meanwhile, already operates a block in the area, which is from 1,500 to 2,500 meters underwater, reports Upstream Online.
Prior to CNOOC's announcement, Pertamina's bid exceeded that of China’s Sinopec Group and the Oil and Natural Gas Corp. of India, according to Upstream Online.
Africa’s Runner Up for Oil
Angola is second after Nigeria, who leads oil production in Africa. It seeks to use petroleum for economic stability; oil makes up about 91% of the country’s exports and about 40% of GDP. Last month, Angola pumped 1.6 million barrels of oil a day.
Angola exports oil to several different countries, including the United States and China. The country ships more oil to China than Saudi Arabia, with 2 million tons being exported to China and 1.9 million tons shipped to Saudi Arabia, according to Source Watch.
Although oil was discovered in Angola in the 1950s, production rose ten years later when oil was found in Cabinda.
Key Statistics – Oil in Angola (Source: Business Monitor)
- Angola is expected to make up almost 5% of the demand for African oil by 2015.
- Angola exported an average of 4mm b/d in 2001, but that number rose to 6mm b/d in 2010.
- The growth of oil production in Angola has the most potential; Nigeria will also see a rise in exports if the political climate stabilizes.
- Oil consumption in Angola is predicted to increase about 342% from 2010 to 2020. Near the end of 2020 the growth is predicted to slow to about 15%.
- Sonangol is a state oil company that partners with global companies but it is responsible for less than 40% of the oil produced in the country.