(Updates with reasons for decline in eighth paragraph.)
May 7 (Bloomberg) -- Angola, Africa’s second-biggest oil producer, probably won’t reach an output target of 2 million barrels a day next year because new projects will be too late to boost declining flows, Wood Mackenzie Ltd. said.
Sonangol EP, the state oil company, said in a statement 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 million barrels a day last month, according to data compiled by Bloomberg.
“I don’t think 2 million barrels a day by next year is realistic,” David Thomson, a Wood Mackenzie analyst in Edinburgh, said in an e-mailed response to questions. “I am confident it will happen, but toward the end of the decade.”
Total SA’s CLOV fields in Block 17 and Eni SpA’s Western Hub in Block 15/06 are expected to start in 2014 and together may add 241,000 barrels a day while older fields off Angola slow. Drilling this year by BP Plc 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 million barrels a day in the last 15 months and has been declining month on month since November,” Abhisek Deshpande, lead oil markets analyst at Natixis SA in London, said by e- mail. “It looks highly uncertain if Angola will be able to meet its target.”
Chevron Corp., at one time Angola’s leading producer, is trying several projects to stem reduced flows. The San Ramon, California-based explorer plans to start pumping 110,000 barrels a day next year from the $5.6 billion Mafumeira Sul development in Block 0 Area A, while the $2 billion Nemba Enhanced Secondary Recovery project will add 13,000 barrels a day in Block 0 Area B, according to the company’s website. Total, based in Paris, is employing new pumps to increase output by 60 percent 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 e-mail. “I don’t think they will get to 2 million barrels a day next year.”
Angola’s falling output has also been blamed on maintenance issues, technical faults with water-injection systems, gas cooling and floating production, storage and offloading units, mechanical damage, state interventions and corruption, Deshpande said.
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 barrel- a-day N’Dola project.
Production is expected to pick up in 2017 with the start of Houston-based Cobalt International Energy Inc.’s 100,000 barrel- a-day Cameia project in Block 21 and Total’s $16 billion Kaombo development. Total, the country’s largest producer, gave final approval April 14 for the 600-million-barrel Kaombo site in Block 32, which is expected to produce 200,000 barrels a day.
New projects will be enough to meet the 2 million barrel a day target by 2015, Petroleum Minister Jose Maria Botelho de Vasconcelos said in a November interview. Ministry spokesman Jose Miguel didn’t return phone calls and e-mails this week.