Sources suggest that in June 2018, Sonangol announced to oil companies working in Angola that it would sell part of its interests in almost every offshore block in which it participates. The list of possible farm outs includes blocks that are already in production, blocks where discoveries have been made but are not in production yet and blocks in which discoveries have not yet been made.  The following blocks have been listed (See Figure 1):     Producing blocks include: Blocks 0, 3/05, 4/05, 14, 15/06, 31 and 32.       Blocks where discoveries have been made but are not in production yet include: 16/15, 20, 21, 23 and 24 (Block 24 is understood to have been relinquished by BP, Sonangolâs interest in the block is currently unclear).       Block 40 operated by Total, has also been listed. To date no discoveries have been made within the block.     According to local sources Sonangol aims to achieve three objectives with the farm down programme:    The fist is to reduce its interest to around 20% in each block       The second is to generate sufficient cash to allow it to cover arrears cash calls and other operational debt       The third is to move the company to a situation in which it has positive cash flow because of its decreased interest and hence reduced level of investment required soon     Sonangol may find it difficult to farm down an interest and make a profit in Block 15/06, 31 and 32. The reason being the high exploration and development costs for relatively limited recoverable resources. An example would be Block 32 recoverable resources are in the region of 600 million barrels however, sources suggest the development costs are in the region USD 18.5 billion. In addition, blocks that play host to gas discoveries like Block 24 or have limited recoverable resources like Block 4/05 are also likely to be difficult to farm down.  Figure 1: indicates the blocks in which Sonangol has and interest and the listed blocks where it intends to farm out a stake.
Angola Soc Nacional de Petroleos de Angola (Sonangol E.P) announces to oil companies working in Angola that is will sell part of its interests in a number of offshore blocks