Despite exiting Nigeria’s onshore, TotalEnergies invests $850m in Angola

Less than six weeks after announcing plans to sell its stake in a Nigerian oil joint venture, TotalEnergies and its partners have taken a final investment decision on an $850 million CLOV Phase 2 project in block 17 offshore Angola.

According to Angolan National Oil, Gas and Biofuels Agency (ANPG), the CLOV Phase 2, a project connected to the existing CLOV FPSO (Floating Production, Storage and Offloading unit) will reach a production of 40,000 barrels of oil equivalent per day in mid-2022.

“This block 17 project fits within the company’s strategy to focus its upstream investments on low-cost projects which contribute to lower the average GHG emissions intensity of its production”, said Henri-Max Ndong-Nzue, Senior Vice-President Africa, Exploration and Production at TotalEnergies.

Block 17 is operated by TotalEnergies with a 38percent stake, alongside Equinor (22.16%), ExxonMobil (19%), BP Exploration Angola Ltd (15.84%) and Sonangol P&P (5%). The Contractor Group operates four FPSOs in the main production areas of the block, namely Girassol, Dalia, Pazflor and CLOV.

Belarmino Chitangueleca, acting President of the ANPG, commented that “CLOV Phase 2 start-up comes at the right time to sustain the national oil production. We value the performance of the operator and the contractor group to keep executing projects despite this crisis period.”

Angola used to be Africa’s second-largest oil producer until early 2021, but has its seen output tumble to 17-year lows. Crude output has averaged around 1.13 million bpd in 2021, down from a 2008 peak of 1.9 million bpd, according to S&P Global Platts estimates.

But there has been a slew of new startups, including five in the past eight months: TotalEnergies’ 40,000 bpd Zinia Phase 2 and 40,000 bpd CLOV Phase 2, BP’s 30,000 bpd Platina field, and Eni’s 15,000 bpd Cabaca North and 10,000 bpd Cuica projects.

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The Angolan government has said these recent startups could help Angola’s oil production reach 1.3 million bpd in the next three years.

S&P Global Platts forecasts the West African producer is now banking heavily on BP, Eni, TotalEnergies and ExxonMobil, all of which have recently resumed exploration and drilling work.

TotalEnergies is expected to drill the Ondjaba-1 wildcat exploration well in Block 48, and it is also finalizing the Chissonga field development in Block 16.

According to Deborah Gordon, leader of oil and gas solutions at global energy and climate think-tank RMI, investors are more likely to back oil extraction in wealthier and more politically stable countries if demand starts to fall.
“It is the smaller petrostates that will particularly struggle,” she said. “Countries that are war-torn, or with non-democratic governance, or a lot of corruption, are probably those that will teeter on the brink if we are successful in reducing our consumption of oil.”
Although Nigeria, Africa’s biggest oil producer, which sits atop over 36 billion barrels of crude oil reserves, is punching below its weight in terms of foreign investment, according to experts.
Foreign investment into Nigeria’s oil and gas hit a low of $101 million in 2021 which showed a sharp decline compared to $327.30 million recorded just in the fourth quarter of 2016, data obtained from the National Bureau of Statistics show.

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