Angola’s oil revival depends heavily on foreign influence

Bloomberg

Total SA is positioning itself as Angola’s top foreign operator in the country’s efforts to revive oil production from the lowest level in more than a decade.
The French energy giant could one day operate about 40 percent of the nation’s production, and is considering an additional investment of as much as $10 billion, according to Chief Executive Officer Patrick Pouyanne. That gives the company a decisive role in what’s become a major issue in Angola’s domestic politics as President Joao Lourenco vows to reverse economic problems caused by the industry’s decline.
“Angola is one of the most important countries for oil and gas in the continent,” Pouyanne said at a conference in Luanda, the capital.
In 2018, Angola’s oil output sank to 1.48 million barrels a day, according to data from state-run Sonangol EP.
This is the lowest level in more than a decade and follows years of under-investment in new projects. In May, the former chairman of Sonangol, Carlos Saturnino, was ousted following fuel shortages at filling stations.
The French oil major produced an average of 275,100 barrels of oil equivalent a day in Angola in 2018, according to consultant Wood Mackenzie Ltd. That’s 14 percent more than BP Plc produced in the country. Pouyanne said Total’s output in Angola could rise to as much as 650,000 barrels a day, without giving a timeframe. In May, Total loaded the first cargo of Mostarda crude from the Kaombo Sul floating production, storage and offloading vessel. Along with another vessel, the Kaombo Norte, the ultra-deep water project has an estimated production capacity of 230,000 barrels of oil equivalent a day, according to operator Total. It’s already ramped up output to 90,000 barrels a day, Pouyanne said. The Kaombo project covers an area almost eight times the size of Paris, tapping reserves at depths of over 6,500 feet.
Totsa Total Oil Trading SA, Total’s trading unit, along with Trafigura Ltd. were awarded a 12-month contract to supply fuel to Angola, Sonangol said in a statement last month.
Other oil majors have also been in negotiations over Angolan blocks, and Eni SpA has made other recent discoveries. Angola plans to put up more blocks for sale in October.