ANGOLA: 9th Offshore Oil Discovery Increases Resource Base

Bottom Line: Italy's Eni SpA has made its 9th offshore discovery in Angola, setting up the West African country to become a regional energy hub.

Analysis: Last week, Eni announced another new discovery in its Block 15/06 at its Vandumbu-1 well offshore Angola. The well was drilled at a water depth of 976 meters, reaching a total depth of 4,107 meters. Eni found a net oil pay of 114 meters in Lower Miocene high-quality sand. Eni estimates the well has a production capacity of over 5,000 bpd. Eni is the well operator with a 60% JV interest, while Angola's state-owned Sonangol and Total SA each have a 15% stake, with other smaller partners making up the rest. Angola is hoping to produce up to 2 million barrels of oil per day by 2014. Angola has proven reserves of 9.5 billion barrels of sweet, light crude oil, making it the second-largest in the region behind Nigeria. For 2012, Angola's production averaged 1.7 million barrels per day, but that is rising fast. Angola will achieve, if not exceed, its goal.  Angola has 12 major deepwater projects onstream, exploiting 35 fields.

Recommendation: This is a great game for juniors to get in on right now, and the country is shaping up to be the next major West African hub. While 2011 saw the majors hit the scene hard in closed bidding, the next concessions will be offered up in an open auction.