Angola may miss 2015 oil-production goal, Wood Mackenzie says


Angola may miss 2015 oil-production goal, Wood Mackenzie says


MIDLOTHIAN, United Kingdom (Bloomberg) -- Angola probably won’t reach an output target of 2 MMbpd next year because new projects will be too late to boost declining flows, Wood Mackenzie said.

Sonangol said in a statement on May 5 that the target remains in place after government-run newspaper Jornal de Angola reported that the goal was deferred to 2017. The Organization of Petroleum Exporting Countries member pumped 1.54 MMbpd last month, according to data compiled by Bloomberg.

“I don’t think 2 MMbpd by next year is realistic,” David Thomson, a Wood Mackenzie analyst in Edinburgh, said in an emailed response to questions. “I am confident it will happen, but toward the end of the decade.”

Total fields in Block 17 and Eni Western Hub in Block 15/06 are expected to start in 2014 and together may add 241,000 bpd while older fields off Angola slow. Drilling this year by BP and Conocophillips among others marks the country’s most active exploration yet as it attempts to rival Nigeria, Africa’s leading producer.

“Angola’s oil production has barely managed to go above 1.8 MMbpd in the last 15 months and has been declining month on month since November,” Abhisek Deshpande, lead oil markets analyst at Natixis in London, said by email. “It looks highly uncertain if Angola will be able to meet its target.”

Chevron, at one time Angola’s leading producer, is trying several projects to stem reduced flows. Chevron plans to start pumping 110,000 bpd next year from the $5.6 bn Mafumeira Sul development in Block 0 Area A, while the $2 bn Nemba Enhanced Secondary Recovery project will add 13,000 bpd in Block 0 Area B, according to the company's website. Total is employing new pumps to increase output by 60% in 2015 at its Rosa field in Block 17.

“The decline rates at existing fields are just too high and project delays are crippling growth,” Amrita Sen, chief oil market analyst at Energy Aspects in London, said by email. “I don’t think they will get to 2 MMbpd next year.”

In 2016, Eni expects the Eastern Hub of the Cabaca Norte and Cabaca SE fields in Block 15/06 to start producing while Chevron is targeting first oil from N’Dola in Block 0 Area B. A final investment decision is due this year on the 28,000 bpd N’Dola project.

Production is expected to pick up in 2017 with the start of Cobalt's 100,000 bpd Cameia project in Block 21 and Total’s $16 bn Kaombo development. Total, the country’s largest producer, gave final approval April 14 for the 600 MMbbl Kaombo site in Block 32, which is expected to produce 200,000 bpd.

New projects will be enough to meet the 2 MMbpd target by 2015, Petroleum Minister Jose Maria de Botelho Vasconcelos said in a November interview. Ministry spokesman Jose Miguel didn’t return phone calls and emails this week.

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