London, UK | – Angola’s state oil company Sonangol has cancelled an auction of oil exploration licences for eight blocks, blaming the drop in oil prices since the bidding opened.
“The remarkable drop in the price of the oil barrel and the economic and financial situation of the country and the world, have negatively influenced the viability of the oil concessions,” Sonangol said in a statement.
The round includes five blocks in the Kwanza basin and three on the Lower Congo.
Sonangol said the new economic reality meant the terms initially proposed would not allow “profitable operations” in the near future, and that the round needed to be cancelled to ensure a transparent bidding process.
The company initially announced auctions in the blocks in 2015, when it said that U.S. oil major Chevron, commodities trader Glencore and Portugal’s Galp were prequalified to bid.
Angola is typically Africa’s second-largest oil exporter, though militant attacks in Nigeria’s Delta region meant that it was the top exporter for several months of the past year.