Africa: Angola
August 2000 Vol. 221 No. 8 International Outlook AFRICA Angola The 30-year-long civil war continues unabated. Although more than 700,000 bopd is
AFRICAAngolaThe 30-year-long civil war continues unabated. Although more than 700,000 bopd is exported, most Angolans live in extreme poverty. MPLA, the ruling party, successfully held onto power for another year against UNITA, the largest of several guerilla factions. However, the UN tightened sanctions against UNITA this April, and government forces increasingly control the diamond-rich areas that UNITA uses to purchase arms.
President (more or less since 1979) Eduardo dos Santos has pledged to hold general elections in 2001, but four opposition parties oppose those plans. Elections will not likely settle anything since, historically, any party that loses a political campaign subsequently attempts a military victory. Remarkably, the oil-producing areas – located mostly offshore – are generally unaffected. In the past year, a modicum of normalcy has returned to government-controlled areas. A potentially huge impact for operators occurred when the government agreed to an IMF audit this April. For years, the government and state oil company Sonangol have engaged in practices that kept transactions off the books, such as offshore banks, trust accounts and secret oil sales. Billions of dollars have been stolen in past years, and much of the nation’s current and future oil production must service debt. Inflation is running about 250% annually. The IMF wants to quantify and put an end to the losses – not necessarily in exchange for loans. Critics say there will simply be an increase in secret oil sales. Exploration. In the past year, it has become evident that offshore West Africa, especially Angola, is one of the world’s great hydrocarbon areas. Roughly two out of three offshore exploratory wells strike pay – usually in the 100,000 million to 1 billion-bbl range. At least 18 major discoveries were made in the past five years, and more seem to be added monthly (see Africa discoveries table). Six new deepwater blocks are to be tendered next year along Angola’s central and southern coasts, including those within the near-virgin Kwanza basin.
Drilling/development. According to Upstream, 19 discoveries are planned for development in coming years. The giant Girassol field, offshore Block 17, is two-thirds complete, and startup is expected in second-half 2001 via an FPSO claimed to be the largest-ever floating structure. ExxonMobil is soliciting bids to develop its Kizomba discovery in deepwater Block 15. The project calls for more than 20 subsea injectors and a dry-tree platform comprising 34 wells, which will be tied back to a 2.2 million-bbl capacity FPSO. The company hopes to duplicate the design for use on another deepwater project, but Sonangol has not yet agreed to the "design one, build two" concept. Some 59 subsea wells are planned for TotalFinaElf’s Dalia development in Block 17. First oil is slated for 2004. The country is working on a four-year, $2.3-billion, associated-gas-gathering project with Texaco that includes an LNG processing plant and offshore terminal. As much as 1 Bcfgd is projected to be flared by 2002. State oil company Sonangol forecasts that about 200 wells will be drilled during the 2000 – 04 period. Production. Chevron plans to invest nearly $4 billion in exploration and development over the next three years to add 85,000 bopd to its existing 515,000 bpd of oil production by early 2001. Production from Chevron’s Cabinda field accounts for almost 70% of Angolan output. TotalFinaElf’s 60,000-bopd startup (January 2000) of Kuito field, Phase 1a in deepwater Block 14 should rise to 100,000 bopd by year-end. Production is via the 1.4 million-bbl-capacity FPSO Kuito. Recoverable reserves are at least 1 billion bbl. The National Petroleum Director said that the country’s oil production
should hit the 1 million-bpd mark by the end of 2001, rising to 2 million bpd by 2010.
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