Angola: an Australian company joins Sonangol's offshore operations

Australian oil and gas company Red Sky Energy has officially entered the Angolan market by signing a risk service agreement with Angola's National Oil, Gas and Biofuels Agency (ANPG). The agreement enables Red Sky Energy to acquire a 35% interest in Block 6/24 in the Kwanza Basin, operated by Sonangol E&P.

Block 6/24 is strategically located just 12 kilometres off the coast of Angola, in shallow waters of 70 to 80 metres. It is equipped with state-of-the-art seismic coverage, including 1,531 km² of 2D seismic and 1,465 km² of 3D seismic, providing a solid base for exploration and resource evaluation.

The partnership for this project brings together Sonangol E&P, which holds a majority stake of 50%, Red Sky Energy with 35%, and ACREP with the remaining 15%. The consortium aims to fully exploit the block's resources, in particular through the appraisal and development of the existing oil discovery known as Cegonha.

During the pre-signing negotiations, Red Sky Energy gained access to a data room provided by the ANPG, which enabled it to carry out a detailed assessment of the block's potential. Following this in-depth review, the Australian company believes that Block 6/24 has significant potential for additional discoveries.

Andrew Knox, Chief Executive of Red Sky Energy, emphasised the strategic importance of the acquisition:
"The signing of the RSC 6/24 block marks our first entry into Angola and is a transformational milestone for Red Sky. The block contains a potential commercial oil discovery that the joint venture partners plan to appraise for early production and cash flow generation."

Knox also highlighted the opportunities offered by the existing seismic data to further prove the resources of the block, thereby strengthening the overall economics of the project. Several investors have expressed a keen interest in providing 100% financing for future development.

This project in Angola adds to Red Sky's portfolio of assets, which already includes gas projects at Innamincka and oil projects at Killanoola in South Australia. Block 6/24 provides the company with substantial geographical and sectoral diversification, strengthening its resilience in the face of the global energy transition.

With the ambition of transforming Block 6/24 into an early and profitable source of production, the partnership between Sonangol, Red Sky Energy and ACREP is positioned as a key player in the exploration and development of Angola's offshore resources. The planned studies and future appraisal activities should lay the foundations for a sustainable and beneficial exploitation for all stakeholders.