Red Sky Energy Secures 35% Stake in Block 6/24, Eyes New Deals in Angola – Africa.com
Australian exploration and production company Red Sky Energy has made its first foray into the African oil and gas market, acquiring a 35% stake in Block 6/24 offshore Angola. Exclusive interview with Energy Capital & Power (www.EnergyCapitalPower.com), the company’s chief executive, Andrew Knox, said the Angolan Oil and Gas (AOG) meeting was key to brokering the deal. Knox participated in a panel discussion during AOG 2024 and the company’s acquisition of Block 6/24 highlights the impact the event has as a platform for engaging with industry and securing deals.
What specific factors make Angola an attractive destination for Red Sky Energy’s first international venture?
Red Sky Energy has been looking at certain opportunities (across the continent) for the past three years and has identified significant opportunities in Angola. The agreement we signed is our first foray into the African continent and is very exciting for us. Angola’s production is approximately 1.1 million barrels per day, making it a mature market. We focus on proven resources or developed assets, and those with discovered resources that we can use our expertise to develop and bring to market. In Angola we see many opportunities to do this. There are many smaller oil fields located near existing infrastructure.
Currently, for our first entry, we are not planning to operate. We want to adapt to the market and engage with all players first. However, we are not open to the idea of non-operators. We will also monitor future operating conditions. Angola has lots of oil, good opportunities and a very supportive government. What the country has done in recent years – changing its structure, establishing the National Oil, Gas and Biofuels Agency and improving fiscal conditions – attracted us to the market.
Please elaborate on the potential of Block 6/24, particularly the significance of the Cegonha oil discovery?
We obtained this right through direct negotiations with the government. Block 6/24 is about 12 kilometers from Luanda and the refinery, which is very convenient for us. It also has an existing oil well and the Segonia oil discovery, making it an excellent opportunity to enter the country for the first time. This crude oil is heavy crude oil with an API of approximately 20. However, nearby oil fields also produce such crude oil, so production is not a problem for us and we may sign an offtake agreement and ship the crude oil to the United States. Luanda Refinery.
How do you see the partnership with Sonangol and ACREP contributing to the development of Block 6/24?
We work with the national oil company Sonangol and ACREP. We own 35%, Sonangol will own 50% and ACREP will own 15%. First, Sonangol understands the market. They have a strong local presence, so there was no challenge for us in bringing a foreign operator into the country for the first time. Sonangol is already well established and well connected in the country. Secondly, ACREP is also a national company. They are smaller but quite flexible and we have been impressed with their solutions in terms of how we develop the field.
The agreement outlines extensive geological and geophysical studies over three years and potential drilling decisions in a fourth year. What key milestones does Red Sky Energy hope to achieve within this timeline?
We are studying and possibly reprocessing existing seismic data. There is approximately 3,000 square kilometers of seismic area on the license and we will consider re-treating some of that area and assess how to develop it. Regarding the path forward: Do we want to re-enter existing wells? Will we do a fork in the road or a new assessment? This is what we are currently analyzing. We won’t wait three years to build a well; This is just the time frame we need to make drilling decisions. Obviously, we want to see if we can bring that timeline forward.
Beyond Block 6/24, what are Red Sky Energy’s long-term goals in Angola?
We are looking for many opportunities in Angola. We want to create a major profit center for the company domestically. But our focus is on existing discoveries or discoveries that are in production – we are not looking directly at exploration at this time.
What role did Angola Oil and Gas 2024 play in facilitating the deal?
Angolan oil and gas company helps us in many ways. This was our first conference and we were able to meet everyone. Everyone in the industry attended the event, which was very helpful to us. We were very pleased with how the session went and learned a lot from it. It was a well organized and well run conference. We will definitely participate again in 2025. All in all, we’re delighted to be involved now and we’re looking at other opportunities, it’s a great place to do business in the oil and gas sector. We will definitely pursue other prospects in Angola – keep an eye on this area.
Distributed by APO Group on behalf of Energy Capital&Power.
