After rebasing earlier this month, Nigeria became the largest economy in Africa, surpassing South Africa, but Africa’s most populous country could also lose one of its most prestigious title “Africa’s top oil producer” to Angola by the end of the year, according to ratings firm Moody’s.
Angola’s daily production is set to rise to 2 million barrels per day (bpd), above that of Nigeria’s 1.9 million bpd, as a number of deep offshore oil projects come on stream by the end of this year, boosting its oil output.
“Total’s large ($16 billion) investment in the Kaombo oil project in ultra-deep waters off the coast of Angola reaffirms Angola as a stable operating environment for international oil companies and stands to boost the Central African country’s oil production and is thus credit positive,” said Aurelien Mali, VP-Senior Analyst, Moody’s in a note released last week.
On the other hand, Nigeria’s rich and vast oil industry is marred with oil thefts and other complications that hurt production. These disruptions have resulted in massive leakages and frequent production shut downs.
“Angolan production has been slowly growing as there have been a few new field start-ups. Nigerian production has declined due to force majeures and rising oil thefts. Nigeria’s oil production was averaging 2.2m bpd last year, but it’s gone down to below 1.9m bpd now,” Amrita Sen, chief oil analyst at Energy Aspects said mid last year. “Angola could overtake Nigeria in the near future if the situation in Nigeria does not improve,” Sen added.
Total’s PLC Block 17 in Angola is expected to start extraction in May 2014 and is likely to yield 160,000 bpd, according to Moody’s. The Kaombo oil project, which is expected to be in operation by 2017 will be the largest of several hydrocarbon projects currently underway in the Lower Congo Basin. Kaombo has estimated reserves of 650 million barrels of oil and a projected daily output in the vicinity of 230,000 bpd.
A further 300,000 bpd is about to come on stream over the next 18 months from other projects in the basin, raising the output of Total above 700,000 bpd, which is more than a third of national production.
“Excluding Kaombo, these projects alone are likely to propel Angola’s total oil output to two million bpd by the end of 2015. Kaombo will ensure that production remains above 2 million bpd until 2020,” BusinessDay quoted Mali saying.
In the Kwanza Basin, south of the Lower Congo Basin, the Angolan government has auctioned several licenses for rights to explore pre-salt blocks, and seven discoveries have already been made. Production potential will become clear by the end of this year, but is currently estimated at around two billion barrels from those discoveries.
