A Review of the Nigerian Energy Industry

Eni oil could see Angola surpass Nigeria’s output

Eni Oil pushes Angola to surpass Nigeria’s output
Botelho de Vasconcelos

25 July 2014, Sweetcrude, Lagos – Italian oil giant, Eni SpA, is making efforts to boost Angola’s crude oil output with over 129,000 barrels a day, a development that could see the country surpass Nigeria in oil production.Reports indicate that Eni had upgraded a production vessel for new pumping this year as the southwest African country targets output rivalling its bigger competitor, Nigeria.

Eni planned to start production within five months as operator of Block 15-06’s West Hub fields, estimated to hold reserves of 200 million barrels and boost flows to 80,000 barrels a day. The block’s East Hub development is also due to pump about 49,000 barrels a day after starting in 2016.

Petroleum Minister of Angola, Jose Maria Botelho de Vasconcelos, it was learnt, was counting on block one of the country’s eight offshore projects, which is 350 kilometres (217 miles) northwest of Luanda, the capital, to help raise production to two million barrels a day by next year from 1.66 million last month, compared to Nigeria’s 2.15 million barrels daily.

One of the largest developments, Total SA (FP)’s Clov in Block 17, started last month and targets output of 160,000 barrels a day.

Analysts such as Wood Mackenzie Limited said the projects would be too late to boost declining flows by 2015.

Vasconcelos, at the inauguration of the N’Goma, a floating production, storage and offloading vessel for Eni’s West Hub project, said: “We should think about the need to shorten the time between declaration of oil discoveries and the beginning of production.”

He said Eni was on track to cut in half the eight years it usually took for output to begin after a discovery.

The spokesman of Eni, based in Milan,  Domenico Spina, was said to have declined to comment on this development.

But a Wood Mackenzie analyst in Edinburgh, David Thomson, said: “Eni has made 12 discoveries out of 15 exploration wells, and there is still potential remaining and drilling continuing. The success is certainly evidence of the continued prospectivity of the deep water Lower Congo basin.”

Aside from boosting the country’s output, Thomson said the West Hub development was important for setting up infrastructure for the block’s other discoveries and showing that smaller cluster developments can work even in a high cost deep water environment such as Angola.

He added that the West Hub reserves were less than half of other projects such as Total’s Clov and Pazflor and BP Plc (BP/)’s PSVM.

The spokeswoman for SBM Offshore NV (SBMO), Paula Farquharson-Blengino, said Eni would finish the refurbishment this month of the N’Goma, known as an FPSO and owned by Sonasing.

SBM is a Dutch company that has a stake in Sonasing along with the Angolan state oil company, Sonangol EP, and Schiedam, the Netherlands-based SBM Offshore NV.

Farquharson-Blengino disclosed that the upgrading and 12-year lease of N’Goma costs $1.6 billion, adding that the 100,000 barrels a day capacity FPSO, formerly named Xikomba, was used by Exxon Mobil Corporation (XOM) in Block 15.

She further said new sulphate removal and oil hot-pump modules, weighing as many as 541 metric tons, would be lifted into place at the Porto Amboim Paenal Fabrication Yard 262 kilometres south of the country’s capital.

According to her, N’Goma would be operated on behalf of Eni by Luanda-based Servicos de Producao de Petroleos Limited, a joint venture of Sonangol and SBM, stressing that the operator, known as OPS, would also run two FPSOs for Exxon.

Eni’s share of output in Angola was about 87,000 barrels of oil per day last year from fields covering 21,489 square kilometres. The Block 15-06 hubs would add 42,000 barrels a day to Eni’s share.

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