(Updates with closing share price in last paragraph.)
Feb. 6 (Bloomberg) -- Chevron Corp., the third-largest oil producer by market value, approved plans to develop the Mafumeira Sul project off the Angolan coast for $5.6 billion, the company’s costliest African crude venture.
Mafumeira Sul is expected to begin production in 2015 and eventually reach daily output of 110,000 barrels of oil, the San Ramon, California-based company said in a statement today. The project is the second phase of development of the Mafumeira Field located 15 miles (24 kilometers) offshore in 200 feet (60 meters) of water, according to the statement. The first phase, known as Mafumeira Norte, began pumping crude in 2009.
“This decision demonstrates our commitment to further developing opportunities in Angola where Chevron has a leading position and further adds to our strong queue of major capital projects under development,” George Kirkland, Chevron’s vice chairman and exploration chief, said in the statement.
Chevron is spending $36.7 billion this year on oil exploration, natural gas export terminals and refinery upgrades. The company had its second most profitable year in 2012, posting net income of $26.2 billion. The only year in which Chevron earned more was 2011, when it reported $26.9 billion in profit, according to data compiled by Bloomberg.
Angola, which has the third-largest reserves in Africa, accounted for 5.9 percent of the Organization of Petroleum Exporting Countries’ output in January, according to data compiled by Bloomberg. Annual production in Angola rose 3.4 percent last year to 1.75 million barrels a day.
Chevron’s most-expensive current project in Africa is the $8.4 billion Escravos GTL development in Nigeria that is scheduled to begin converting gas to motor fuels later this year. The Escravos project doesn’t have an oil component.
Chevron’s partners in the Mafumeira Sul are Sonangol EP, Total SA and Eni SpA. The project will entail drilling 50 wells and building two platforms and 75 miles of subsea pipelines, according to the statement.
Exxon Mobil Corp. and PetroChina Co. are the world’s largest and second-largest energy companies by market value, respectively.
Chevron rose 0.1 percent to close at $115.91 in New York.
--Editors: Jessica Resnick-Ault, Steven Frank