Even as OPEC-member Angola continues to comply to bloc-wide crude production cuts, its progress on its first offshore oil project remains unhindered, according to a new report by Reuters.
Total, the French company heading the 230,000-barrel per day Kaombo project, said the first vessel that will pump and store oil in the African nation’s waters is on its way from Singapore right now.
The $16 billion project is slated to cause a 14 percent jump in oil production compared to the 2017 national average, which stood at 1.632 million barrels per day.
The floating production, storage and offloading (FPSO) unit will be able to pump 115,000 bpd, exactly half of the project’s final expected output. Another duplicate vessel is still docked in Singapore.
The Organization of Petroleum Exporting Countries (OPEC) agreed to cut output by 1.2 million barrels per day back in November 2016. The bloc’s members and a dozen other allies have reduced production by another 600,000 barrels per day to rebalance global oil supply markets.
Angola’s adherence to its quota under the deal has been high. According to February figures, the country’s compliance rate recently hit 194 percent. If Koambo comes online in the next couple of weeks, that rate could plummet quickly. Angola’s production is bound by the production cuts until December 2018, but the deal is scheduled to be “reviewed” in June.
Angola’s oil fields are maturing and are nearing depletion. Unless new investments are made in new discoveries, things will continue getting worse, the International Energy Agency warned in its Oil 2018 report this week.
There have been oil investments in recent years. In fact, three oil majors have invested in new production in Angola, Bloomberg’s Rupert Rowling notes in a recent story. These are Chevron, Eni, and Total. But their discoveries, which have added some more crude to daily production and exports, are not enough to compensate for the decline of Angola’s more mature fields.
By Zainab Calcuttawala For Oilprice.com