Angola joins Opec but production will rise
ANGOLA became the 12th full member of Opec on 1 January – just after the start-up of Total's Dalia field, which will give another surge to the country's output. For the moment, the country is not subject to an Opec production limit. The December meeting at which it was voted-in put off discussion of this contentious issue until the next scheduled meeting, in March.
Accommodating Angola's rising production – it should increase from nearly 1.5m barrels a day (b/d) at present to 2.0m b/d next year, from developments already being implemented – will be difficult for Opec because other members have been making cases for an increase. However, production constraints will be strongly opposed by the firms that, mostly since the late 1990s, have invested vast sums in the country's deep-water areas.
Many observers have questioned why the government should want to join the organisation, if production growth and ability to attract investments are to be threatened. Official statements talk of recognition for the country's status as a major oil producer – although the weight that Opec membership could bring in fending off criticisms about the management of its oil wealth might also be a consideration. International organisations frequently criticise the lack of transparency in the country's national finances.
For Opec, Angola is a considerable prize. The country is its first new member since 1971, when Nigeria joined – and two other countries, Sudan and Ecuador (the latter a former member, having left in 1992), are also interested in membership.
For some months Opec has, in effect, suspended its output-quota system. Instead, at its last two meetings it agreed cuts to production levels, as measured independently. At its Doha meeting in October, the organisation said it would cut 1.2m b/d from the then-total (excluding Iraq) of 27.5m b/d, effective 1 November. At Abuja in December, it agreed to cut an additional 0.5m b/d with effect from 1 February.
Dalia will lift Angolan output to over 1.7m b/d by mid-year, when the field is expected to reach its plateau production of 240,000 b/d. The field, with recoverable reserves of close to 1bn barrels, produces to a very large floating production, storage and offloading (FPSO) vessel, with a storage capacity of 2m barrels. Water-depth over the field, some 135 km offshore, extends from 1,200-1,500 metres.
Because Dalia's oil is relatively heavy, at about 23°API, Total has had to drill 71 wells – probably the largest number ever, for a single deep-water development. There are 37 producers, 31 water-injectors and three gas-injectors, with the producers tied-in to nine manifolds. On the seabed there are 40 km of insulated production flowlines, with oil brought to the surface through eight high-tech flexible risers. The cost of the development is estimated at $3.4bn.
Dalia is Total's second stand-alone production facility in its prolific Block 17, where the French firm has made 15 discoveries. The first development in the block, Girassol, lying just west of Dalia, came on stream through an FPSO in late-2001. Since November 2003, the FPSO Girassol has also handled crude from the Jasmim field, which is keeping production through the vessel at its 250,000 b/d capacity. A second Girassol satellite, Rosa, is due to come on stream in the second quarter, with production to be fed-in as processing capacity becomes available on the FPSO.
Total says the development of the block's third production zone is "in the final bidding process before sanction". This is the Pazflor development, covering four fields in the eastern part of the block – Perpétua, Zinia, Hortensia and Acacia. The firm is studying the development of a fourth production zone, named Clov, to cover four fields in the northwestern area – Cravo, Lírio, Orquídea and Violéta.
Block 17 interests are Total, 40%, ExxonMobil, 20%, BP, 16.67%, Statoil, 13.33%; and Hydro, 10%.