The Azule Energy joint venture between BP and Eni has started operations in Angola, establishing itself as the country’s largest independent hydrocarbon producer based on net resources of 2 billion barrels of oil equivalent.
Azule — a 50:50 joint venture that was unveiled in May 2021 amid reports that BP was considering its future in Angola — expects its production to grow from 200,000 barrels of oil equivalent per day currently to about 250,000 boepd within five years.
As of the end of 2021, the gross assets BP contributed to Azule generated a pre-tax profit of about $1.1 billion, while the figure for Eni’s assets was some $500 million.
The value of BP’s gross assets was $6.8 billion, with Eni’s valued at $7.3 billion.
Azule holds stakes in 16 licences — six being exploration blocks — and is a partner in the Angola LNG asset.
The joint venture will also take over Eni’s share in Solenova, a solar company jointly held with state-owned Sonangol, and the collaboration in the Luanda refinery.
Eni said Azule “boasts a strong pipeline” of new projects set to come on stream over the next few years, growing organically from exploration discoveries.
These include the Agogo full-field and PAJ oil projects in operated blocks 15/06 and 31 respectively, and the New Gas Consortium’s Maboqueiro and Quiluma gas project.
Azule holds in excess of 30,000 square kilometres of exploration acreage in Angola’s most prolific basins, said Eni, “allowing it to leverage proximity with existing infrastructures".
The joint venture’s leadership team will report to a six-person board, split equally between BP and Eni, with all the companies’ Angola staff having joined Azule.
Adriano Mongini, most recently Eni’s managing director in Angola, has been appointed Azule’s chief executive.
The partners anticipate Azule’s operating model will unlock significant cost savings, mainly from operational synergies in logistics and technology.
The joint venture has secured third-party funding of $2.5 billion in the form of pre-export financing.
BP chief executive Bernard Looney said Azule “will continue to safely and efficiently develop Angola’s resilient hydrocarbon resources and pursue new opportunities in oil and gas and other energies".
Claudio Descalzi, Eni’s chief executive, said: "A new, strong entity is born, which combines our experience, skills and technologies with those of BP, putting them at the service of the development of Angolan energy resources, with a priority commitment to environmental protection and the growth of local economy."
Mognini added that Azule is “committed to develop the full potential of the company’s portfolio of development and exploration opportunities".