awarded extension to Block 0 Concession in Angola
Posted: 14 May 2004
Concession Extended to 2030
ChevronTexaco confirmed the Angola Block 0 concession held by its
wholly owned subsidiary Cabinda Gulf Oil Company Ltd. (CABGOC) has
been extended beyond 2010 to 2030 by the government of Angola and
national oil company, Sonangol.
Comprising 36 major fields including Takula and Malongo, the 2,155-square-mile
concession lies off the coast of Cabinda Province. CABGOC, with
a 39.2 percent interest, is operator on behalf of its association
partners, Sonangol (41 percent), Total (10 percent) and ENI (9.8
percent). Current average production from Block 0 is approximately
400,000 barrels of oil per day.
Speaking today at a signing ceremony in Washington, D.C., ChevronTexaco's
chairman and chief executive officer, Dave O'Reilly, said: "ChevronTexaco
would like to express its thanks to the government of Angola, Sonangol
and our Block 0 Association partners for the constructive approach
they have taken in helping to reach this milestone.
"This agreement is the latest highlight in ChevronTexaco's
long-term partnership with Angola and underscores our commitment
to a country where we have had a presence since the 1930s. It also
sends a strong message to the international business community --
that we have found Angola to be a good place to invest. The extension
enables the Block 0 Association partners to optimize the further
development of Block 0 to the benefit of the Angolan people and
the association," O'Reilly said.
In a move welcomed by international observers, Sonangol made public
the $210 million "signing bonus" and an additional $80
million "social bonus," part of which will be targeted
specifically at Cabinda Province, paid by the association partners
under terms of the extension agreement. Referring to the disclosure
as "an important step" in the ongoing reconstruction of
post-war Angola, Manuel Vicente, chairman and chief executive officer
of Sonangol, said: "The government of Angola understands that
good governance is a cornerstone of good business and that it is
in our own interest to make progress in this important area. Economic
growth and stability are critical factors in the reconstruction
of Angola and that is why we are working diligently to put in place
the financial management systems necessary to facilitate the resumption
of normal economic life for Angola's people, to foster international
trade and to encourage foreign direct investment in our country."
Adding his comments on the disclosure by Sonangol, Dave O'Reilly
said: "ChevronTexaco is fully supportive of the bold move to
tackle such a difficult issue as transparency and good governance.
The disclosure of the Block 0 signing bonuses is fully in line with
what we have long believed and called for: that the effort to address
the management of oil revenues should be led by affected governments,
not imposed on them by others. We are pleased that President Dos
Santos and his administration have taken this step, and we stand
by to support their transparency efforts."
Outlining the importance of the extension agreement to ChevronTexaco,
George Kirkland, president of ChevronTexaco Overseas Petroleum,
said: "Africa is extremely important to us, and our Angola
operations, in particular, are a central component of ChevronTexaco's
global exploration and production portfolio. The continuing development
of Block 0 will be integral to us successfully reaching our target
of maximizing the value of our base businesses around the world."
The extension agreement formalizes a previously concluded Heads
of Agreement governing the flow of investment monies to major Block
0 capital projects, including the Sanha gas condensate development,
which continues on pace and will cut routine flaring on the block
by half when it comes fully onstream in early 2005. In addition,
with the extension now signed, CABGOC will be able to redouble its
efforts around other strategic business aims.
"Today's announcement is not only good news in terms of our
ongoing operations and capital investment program in Angola, it
also means we can continue to build on the solid progress we have
made in other areas, including the steady 'Angolanization' of our
work force," said James R. Blackwell, managing director of
ChevronTexaco's Southern Africa strategic business unit. "Already,
about 63 percent of CABGOC's technical staff and management are
Angolan, along with more than 87 percent of the total work force.
Under the terms of the extension agreement, we are committed to
expanding those numbers so that by 2010 90 percent of those within
our technical and managerial ranks will be Angolan.
"We are also keenly aware of the changes currently taking
place in Angola," added Blackwell. "The signing of the
extension agreement will give further impetus to the social and
economic development programs we have put in place to help speed
the reconstruction effort throughout the country, as well as to
our well-established community and local content programs."
CABGOC also has confirmed it will be proceeding with its plan to
open an office in Cabinda City during 2005.
For more information see http://www.chevrontexaco.com/
Posted by Richard Price,
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