Chile and Angola Join Forces, Ink E&P Agreement
Angola is a country rich in oil and gas reserves and, according to the International Energy Agency, this African country has proven oil reserves of 9 billion barrels and around 9.5 TCF of proven gas reserves as of January 2008. It is also developing a LNG project that will start operating in 2012, together with other initiatives that could be an excellent alternative for meeting the additional demand for gas in Chile, through ENAP.
In this context, the coming together of Chile and Angola is relevant as, in the oil business, this African nation is one of the largest suppliers of ENAP, with imports representing approximately 20%. An economic and petroleum agreement was therefore signed between the governments of Chile and Angola that could directly benefit ENAP, with a reduction in customs duties that could even lead to reaching 40% of ENAP'S crude imports, plus other business.
The agreement was signed in the presence of the minister of foreign affairs, Alejandro Foxley, the Angola Foreign Affairs Minister, Joao Bernardo de Miranda, the minister of mining, Santiago Gonzalez, the Chief Executive of ENAP, Enrique Davila, and representatives of the country’s economic, political and diplomatic groups. Also present on behalf of the Company were ENAP's manager of planning and performance, Guillermo Del Valle and the integrated projects director, Claudio Aldana.
The interests of Chile and ENAP in reaching concrete agreements with Angola are various. Between 2005 and 2006, there was a sharp fall in the availability of Argentine crude. This led to the need to replace that crude with others from Latin America, Africa and Asia and, if import duties could be eliminated on imports from Angola, the Company’s refinery operations would be optimized because they would have a larger volume of crude of an even quality which would generate an improved refining margin and thus better results.
In another area, there is an LNG project in Angola called Angola LNG with an initial capacity of 5 million tons a year which will start operating in 2012, with LNG that will be transported to a terminal in the United States Gulf.
In an initial phase, the agreement seeks to promote cooperation in the oil industry in Chile and Angola, interchanging experiences in oil and gas exploration and production, and in oil policy experience and knowledge.
The initiative was proposed by the African country and establishes a framework of understanding for closer relations between both counmtries in the area of energy, a fundamental basis for discussing concrete initiatives and setting up work teams.