Angola is racing to increase substantially its oil production and maintain its position as Africa’s second largest oil producer, more than a year after it signed production sharing agreements for acreage offered in the limited international bidding round in December 2011 for access to pre-salt acreage in the offshore Kwanza basin.

Angola’s oil sector entered 2013 with a scenario with production close to record 2008 levels due to starting new exploration and overcoming technical difficulties at others, said the Economist Intelligence Unit (EIU) in its latest report on Angola.

The country’s news agency, Angop, reported that between January and December last year Angola’s oil production averaged 1.7 million b/d (MMb/d) thanks to starting exploitation of the Satellites do Kizomba first phase project in offshore Block 15.

Angop added that the Satellites do Kizomba first phase project exploitation would boost production by 100,000 b/d.

But Jose de Vasconcelos, the Angolan oil minister was quoted by Reuters on the sidelines of the OPEC meeting in Vienna in December 2012 as saying that Angola’s oil output would reach 1.8 MMb/d to 1.85 MMb/d in 2013.

“To achieve 2 MMb/d, we need to work more and more. I don’t believe we’ll achieve this target next year (2013),” Vasconcelos said.

Twelve major and independent oil companies – Statoil, British Petroleum Angola, Eni Angola, Esso Angola, Galp Energia, Maersk Oil, Petrobras, Total Angola, China Sonangol, Chevron, Cobalt International Energy Inc., and ConocoPhillips – participated in the pre-salt bidding round. Some of these have reported progress in exploration.

For example, Cobalt International Energy Inc. was awarded operatorship of Block 20, which was the most sought-after block by industry in the round. BP was another major player in the bidding round, winning access to four more deepwater exploration and production blocks.

Statoil was awarded operatorship for Blocks 38 and 39 and partnership in Blocks 22, 25 and 40, while ENI signed a production sharing contract for the exploration of Block 35, which covers about 4,900 sq km (1,892 sq miles).

New Production Onstream

BP started production from the Plutao, Saturno, Venus, and Marte (PSVM) complex at the end of January 2013. Initial production will come from three production wells in the Platao field, which is expected to ramp up to 70,000 b/d. PSVM is expected to build towards plateau rates of 150,000 b/d over the coming year, with additional production coming from the Saturno and Venus fields in 2013 and Marte in 2014.

The oil field is located in the northeast area of Block 31 in the Angolan Sea and has a floating, production, storage, and offloading (FPSO) unit with 1.8-MM-barrel capacity.

Bob Dudley, CEO of BP, commenting on the PSVM startup, said, “PSVM is one of the largest subsea developments in the world and was one of BP’s key project start-ups for 2012 as we grow higher margin production. Over the coming decade, we expect Angola to be one of the main hubs delivering growth for BP.”

BP Exploration Angola is the operator of the development with a 26.67% interest. Other holders in Block 31 include Sonangol E.P. (25%), Sonangol P&P (20%), Statoil Angola (13.33%), Marathon International Petroleum Angola (10%) and SSI 31 (5%).

Along with “reduced technical faults” at other fields, the PSVM field’s contribution is expected to push Angolan production to almost 1.9 MMb/d in 2013, which is the record posted in 2008, according to the calculations by the EIU.

The EIU said that in October 2012 Angolan oil production totaled 1.79 MMb/d, which was higher than the 1.75 MMb/d in the previous month and the same as the daily average for 2012. The increase is related to the start of production at the Pazflor oil field, which has production of 220,000 b/d and the Kizomba D Satellites fields, which provide almost 140,000 b/d.

New Discoveries, Development

Cobalt International Energy in February 2012 made a big deepwater find. The company said in a statement that work at the Cameia-1 well confirmed a 360-m (1,188-ft) oil column.

“The Cameia prospect area may have close to 2.5 billion barrels gross, based on preliminary result,” Scott Hanoid, an analyst at RBC Capital Markets, was quoted as saying regarding the find.

Maersk Oil said it has made a new oil discovery at the Caporolo-1 exploration well in Block 16 offshore Angola in the Lower Congo basin. Earlier last year, Maersk also announced that it had hit oil with its first pre-salt well, the Azul-1 deepwater well in Block 32 in the Kwanza basin.

Oil companies are carrying on investments in Angola unlike Nigeria where uncertainty surrounding the Petroleum Industry Bill is causing oil companies to hold back investments in the Nigeria offshore.

Chevron, has approved plans to proceed with the development of the Mafumeira Sul project located off the Angolan coast for $5.6 billion, the country’s costliest crude venture.

Located 24 km (14.4 miles) offshore Cabinda Province in 60 m (198 ft) of water, the Mafumeira Sul project is the second stage of development of the Mafumeira field located in Block O, according to a Chevron statement. The project is expected to begin production in 2015 and eventually reach daily output of 110,000 b/d. Chevron’s partners in the Mafumeira Sul are Sonangol EP, Total and Eni.

Figures from the Angolan Oil Ministry show that oil production in Angola is expected to increase from 1.8 MMb/d to 2 MMb/d by 2014. This could come true with the exploration and new production underway in the country.

Obafemi Oredein, Special to E&P

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