(EnergyAsia, July 30 2014, Wednesday) — Angola officials believe their country could soon overtake Nigeria to become Africa’s leading oil producer although analysts expect both to experience declines over the next few years.
Angola’s petroleum ministry and state energy firm Sonangol have variously been stating that the country’s oil production could exceed two million b/d between 2015 and 2017, an increase of about 15% over last year’s 1.742 million b/d.
2009 2010 2011 2012 2013 2014
Oil production (million b/d) 1.809 1.755 1.660 1.731 1.742 1.794
Oil and gas exports (US$ billion) 39.9 48.5 64.8 70.9 69.1 69.5
The International Monetary Fund (IMF) has forecast that Angola’s oil production will increase to 1.794 million b/d in 2014 as foreign investors led by Italy’s ENI, BP, Total and China’s CNOOC and Sinopec continue to develop its deepwater and offshore reserves. Angola’s oil export earnings are seen holding around US$70 billion per year, compared with US$48.5 billion in 2010.
Last month, France’s Total started production at a deepwater Block 17 field located 140 km from Luanda. The 500-million barrel CLOV field is expected to produce up to 160,000 b/d.
Angola is looking to ENI and its consortium partners to add a total of 129,000 b/d of new oil flows from the offshore Block 15-06’s fields by 2016. The block’s West Hub fields could yield 80,000 b/d when it starts up by the end of this year while the East Hub project is expected to produce 49,000 b/d from 2016.
Nigeria’s oil production, on the other hand, is expected to continue declining after peaking at more than 2.5 million b/d in 2010 and hitting new lows of 1.8 to 1.9 million b/d in recent months. Africa’s largest oil producing nation faces worsening economic prospects and political unrest brought on by ethnic conflicts, a growing Islamic terror threat, lawlessness, and widespread corruption and theft of oil.
Angola’s oil production surge, however, may not be sustainable as its new wells and finds will not be sufficient to offset the declines of existing fields that are already past their peak.
Petroleum Minister José Maria Botelho de Vasconcelos is unfazed as he believes investors will uncover new deepwater reserves to add to Angola’s estimated 12.7 billion proved oil reserves.
The West African nation is also facing at least 16 months of lost income from the enforced shutdown of its US$10 billion liquefied natural gas (LNG) export plant at Soyo on the Congo River since April.
The Chevron-led plant, which has been beset by operating problems since a delayed start-up last June, is undergoing pipeline repairs that could stretch through mid-2015. The 5.2-milliont-ton/year plant was operating at 50% of capacity when a pipeline ruptured, said Chevron, which holds 36.4% stake in the project. The other owners of Angola LNG are Sonangol EP (22.8%), France’s Total, BP Plc and ENI, each with a 13.6% stake.
The loss of LNG production could force the IMF to reduce its forecast of 5.3% for Angola’s economic growth for 2014. Thanks to rising oil production, the country’s economic growth has been accelerating over the last five years, starting with 2.4% in 2009. It reached a recent high of 5.2% in 2012.