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Angola’s Oil & Gas Revenue: Past, Present & Future

Angola’s Oil & Gas Revenue: Past, Present & Future. Agenda. Background to Wood Mackenzie Setting the background - Angola’s upstream industry in context Historical and possible future government revenues A brief international context. Background to Wood Mackenzie.

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Angola’s Oil & Gas Revenue: Past, Present & Future

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  1. Angola’s Oil & Gas Revenue:Past, Present & Future

  2. Agenda • Background to Wood Mackenzie • Setting the background - Angola’s upstream industry in context • Historical and possible future government revenues • A brief international context Petroleum Revenue Management Workshops, Luanda, May 2006

  3. Background to Wood Mackenzie • Providing information and analysis on the upstream industry for over 30 years • Asset level information - field by field or block by block • Started West African coverage in 1990 • Research and analysis held in proprietary databases and economic models • Asset data, field profiles, contract terms etc derived from many sources • Public information • Government information • Company information • Conversations with operators, partners… • Ultimately all asset profiles and values are WM own best estimates Data here comes from Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  4. Angola has seen spectacular growth in its deepwater resource base… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  5. …resulting in ongoing upward revision of production profiles… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  6. …driven by deepwater developments Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  7. Lead times from discovery to development sanction have been increasing… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  8. …and need to be accelerated to stem decline from the first tranche of developments Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  9. Huge investment required to generate massive revenues… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  10. …which will transform the revenues received by the state… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  11. …dominated by profit share from deepwater PSCs… Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  12. …with total state revenue at least 50% of gross revenue and could be as high as 80% Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  13. UK comparison Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  14. UK comparison Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  15. Norway comparison Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  16. Norway comparison Source: Wood Mackenzie’s Global Economic Model (GEM) Petroleum Revenue Management Workshops, Luanda, May 2006

  17. Conclusions • What are the upsides? • High prices – progressive government take • Further discoveries • Spectacular bonuses for some deepwater licences • What are the downsides or risks? • Low prices • Very high cost inflation throughout industry • Very steep production decline without further discoveries • Disappointment in ultra-deep water • Small number of partners Petroleum Revenue Management Workshops, Luanda, May 2006

  18. Thank you for your attention Thank you for your attention David Morrison Chairman, Energy T: +44 207 877 0570 E: david.morrison@woodmac.com Catriona O’Rourke Senior Angola Analyst T: +44 131 243 4250 E: catriona.o’rourke@woodmac.com Wood Mackenzie Head Office Kintore House 74-77 Queens Street Edinburgh EH2 4NS Global Contact Details Europe +44 (0)131 243 4400 Americas +1 713 470 1600 Asia Pacific +65 6549 7107 Email energy@woodmac.com Global Offices Beijing - Boston - Dubai - Edinburgh - Houston - Kuala Lumpur - London - Moscow - New Jersey - New York - Singapore - Sydney - Tokyo Wood Mackenzie has been providing its unique range of consulting services and research products to the Energy and Life Sciences industries for over 30 years.Wood Mackenzie’s market proposition is based on its ability to provide forward-looking commercial insight that enables clients to make better business decisions.For more information visit: www.woodmac.com Petroleum Revenue Management Workshops, Luanda, May 2006

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