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ANGOLA - Energy & Mining

Adriano Mongini

CEO, Azule Energy

Bio

Adriano Mongini is CEO of Azule Energy.

"This is an important partnership that not only focuses on operations, but also provides us with the necessary tools to implement process optimization for production and product management."
TBY talks to Adriano Mongini, CEO of Azule Energy, about investment in Angola, partnerships, and plans for the medium term.
Azule Energy has outlined plans to invest approximately USD2 billion per year in its pipeline of projects for the next four years. How has its pipeline evolved over the past year?

We are progressing with the original plan and adding some additional activities as well. Compared to 2022, we have made adjustments to FID and the senior consulting team for the NGC gas project. Although it may not be one of the most important projects in terms of CAPEX, it is a transformational one for Angola, as it is the first non-associated gas project that could pave the way for development in the gas value chain. This project has the potential to add real value to Angola’s gas market, which has only been partially exploited so far. We have started construction on both offshore installations. Additionally, we have also started construction of the gas plant situated closer to Soyo that has been progressing smoothly ahead of schedule. Last year, we also held discussions on the Agogo Project, the largest project in Azule Energy’s pipeline and subsequently reached the final investment decision (FID) in February this year. The contracts have been signed, and the construction phase of the project has commenced. The project encompasses the development of two fields, Agogo and Ndungu, which were discovered two years ago. This project is valued at USD8.2 billion, making it the largest FID worldwide. The floating production storage and offloading (FPSO) selected for the project is not a new build but involves the conversion of a tank into an FPSO, which is a popular approach for such construction. The work has already begun at a Chinese shipyard, and we are making excellent progress. The FPSO has completed its initial activities in the dry dock and recently started floating, entering the next phase of transformation. This project will bring additional reserves and production from Block 15/06 to Ngoma, allowing for the release of the Ngoma FPSO as soon as peak production is achieved. It will also be able to significantly improve the emissions profile of Azule Energy due to new carbon capture technology. Additionally, there is the Caraculo Project, which was in the execution phase last year and was completed and finalized in March. It is currently generating electricity with zero emissions. In May, we successfully integrated the project, marking it as the first private investment in renewable energy with a capacity of 25MW. We have also initiated discussions for the second phase for another 25MW. This investment is a significant development for us. Azule Energy is also engaged in exploration activities that will shape our future. Currently, we are conducting an ongoing exploration in Block 15/06. Another important activity planned for next year is to drill in Block 1/14, which will be the first gas exploration well in Angola. This block is not part of the new gas consortium, but already holds gas reserves. Regarding the last ring of the value chain, we are currently partnering with Sonangol in the Luanda refinery and signed an MoU last July. Azule Energy, alongside ENI, is taking the lead in this project and providing technical assistance for refinery improvement. The collaboration envisions the ultimate goal of transforming the existing refinery into a green refinery, thus closing the circle of the gas value chain. Decarbonization is not the enemy of the oil industry; it is an additional aspect that can coexist and complement Angola’s production of oil and gas. The goal is not to halt oil and gas production, but rather to emphasize the importance of diversifying energy sources and incorporating cleaner alternatives.

How will the partnership with AVEVA, aimed at digitally transforming Azule Energy’s operations for optimized productivity, enable it to successfully achieve its goals and objectives?

This is an important partnership that not only focuses on operations, but also provides us with the necessary tools to implement process optimization for production and product management. This partnership with AVEVA is a powerful tool that brings us great satisfaction. It aligns perfectly with our target of achieving optimization in order to enhance production, reduce emissions, and improve overall efficiency. By employing a more efficient process, we can lower costs and achieve a lower product emission profile for our activities. AVEVA was chosen as our partner to assist us in all these aspects.

How can the oil and gas sector contribute to the diversification of the economy and stimulate the growth of other sectors?

One way to unlock the potential of the gas value chain is by leveraging the currently limited use of associated gas in Angolan energy. Although this is a fantastic asset, it represents just one aspect of the broader gas value chain. However, it is definitely one of the most significant components. Azule Energy aims to be a partner in the decarbonization efforts and recognizes that decarbonization encompasses various implementation aspects and sub-projects that can create additional business opportunities. One approach to improving our emission profile is through the compensation with carbon credits. The implementation of a forestry project, specifically the REDD+ Project, is pending, as it requires relevant legislation. This project aims to safeguard primary forests, and Angola possesses ample opportunities in this area. The protection of primary forests involves the inclusion and engagement of local communities, which in turn creates a local microeconomy. The microeconomy contributes to further development as it generates local value. Decarbonization can bring value to various sectors, including agriculture and the oil and gas industry. However, the oil and gas sector is not that labor intensive compared to agriculture. By improving techniques and utilizing fertilizers, we can enhance agronomic practices and contribute to the development of the agricultural sector. While the energy sector requires a substantial workforce during the construction phase of the projects, the number of jobs during normal operations is limited. However, collaboration with other sectors that can benefit from the gas value chain can provide additional job opportunities.

What are your plans for Azule Energy over the short to medium term?

We will continue to work on advancing our projects. In addition, we are in the process of establishing and developing Azule Energy, which is not even one year old. We plan to complete the transition and become an independent company by the end of 2023. Building and refining our organization requires significant effort. We need to establish a new governance framework that is distinct from BP and ENI, as we embark on building our own structure. This endeavor demands a substantial amount of time and dedication from our organisation.

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