By Geraldine Amiel
PARIS--French oil major Total SA (TOT, FP.FR) Monday said the
final investment decision to develop the ultra-deep offshore Kaombo
project in Angola has been made, formally launching the development
of the crude oil field with an expected start-up in 2017.
Kaombo, which has estimated crude oil reserves of 650 million
barrels, is expected to have a production capacity of 230,000
barrels a day.
Like other oil majors, Total is in a tight race to find
additional reserves and increase its production to supply strong
demand from emerging countries. Its latest announcement is crucial
as the group has faced several production problems in the past two
years. These included the illegal tapping of pipelines, known as
"bunkering," in Nigeria, strikes in Libya, the halting of its
Kashagan project in Kazakhstan, and a now resolved massive gas leak
at a North Sea platform.
Total also said that following "intense optimization," the
capital expenditure for the Kaombo project has been cut to $16
billion from an initial $20 billion.
The group had increased its investment plans for exploration and
production projects over the past three years and is now committed
to strict financial discipline to help boost its cash flow, while
its strategy to find new reserves is yet to bear fruit.
Total owns 30% in Kaombo and is the operator. Angola's Sonangol
P&P owns 30%, Sonangol Sinopec International owns 20%,
ExxonMobil's (XOM) Esson Exploration and Production Angola owns 15%
and Portugal's Galp Energia SGPS S/A (GALP.LB) 5%.
-Write to Geraldine Amiel at firstname.lastname@example.org
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