Legacy Deepwater Discoveries in Angola Await Development

The recent sanctioning of Azule Energy's Greater PAJ project offshore Angola highlights how President Joao Lourenco's administration has revitalized the upstream sector, aiming to sustain production above 1 million barrels per day. The PAJ project will develop five discoveries that remained untouched for nearly two decades, representing just a fraction of the many dormant deepwater finds in Angolan waters. These discoveries were previously stalled due to the lack of suitable conditions to support their development.

Key Factors Enabling PAJ's Progress

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

Expansion of the Development Plan

Originally, PAJ was designed to exploit the Palas, Astraea, and Juno discoveries in Block 31. However, Azule revised the plan to include two additional finds—Urano and Dion—to enhance resources and improve 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, which have lain dormant for at least 15 years, could still be developed.

Remaining Undeveloped Discoveries

In Block 31, the PSVM floating production, storage, and offloading vessel already exploits the Plutao, Saturno, Venus, and Marte discoveries, and will be joined by the PAJ five finds 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. Similarly, in the adjacent TotalEnergies-operated Block 32, six fields flow oil and gas to the Kaombo South and North FPSOs, but legacy finds like Cominhos, Colorau, Manjericao, Cola, Salsa, and Alho remain unexploited. TotalEnergies recently received an extension to 2043 for this block, which may encourage development of these resources, possibly in combination with three other discoveries—Chissonga, Cubal, and Zenza—in Block 16, which it also operates.

Future Potential and Fiscal Foundations

Sub-surface data from Angola's upstream regulator has identified multiple undrilled prospects in Block 32 that TotalEnergies could target. Successful exploration could be the final trigger needed to advance a project. Angola's government has laid fiscal foundations through its Incremental Production Law, designed to encourage investments in such assets. The next step is for Azule and TotalEnergies to revisit their original feasibility studies for these legacy finds and pursue new subsea or standalone projects.