Angola Sees First FID in Four Years

Total as operator has announced what's understood to be the first final investment decision (FID) for a major upstream project in deep water offshore Angola in four years.

Angolan output will fall sharply from 2019 onwards, unless it secures more investments. The country was the worst affected in sub-Saharan Africa by project cancellations, after the 2014 oil price crash.

The French major said May 29 that it and partners in the $1.2bn Zinia-2 development in Block 17 had taken FID; the oil field will have a production capacity of 40,000 b/d and will sustain Pazflor oil field output that has been onstream since 2011. Zinia-2 is the first of several possible short-cycle developments on Block 17, using floating production units, Total added. E&P chief Arnaud Breuillac said the go-ahead was "thanks to the favorable fiscal framework introduced by the Angolan authorities for satellite developments."

Angola has yet to publish a new fiscal framework that would reward gas production. Currently all offshore associated gas is provided free to Angola LNG, a joint venture of state Sonangol with international firms including Chevron and Total, which cost over $10bn to develop. According to analysts, Angola has the potential for much lower cost new floating liquefaction project developments, provided it introduces a favourable fiscal framework for gas.

Total operates the Kaombo deep offshore project in Block 32 with a 30% interest, this having been the last deepwater Angolan oil project on which FID was taken (April 2014); start-up is due this summer.

Partners in block 17 are Total as operator with 40%, Equinor (formerly Statoil) with 23.33%, ExxonMobil 20%, and BP 16.67%. It includes the Girassol, Dalia, Pazflor, CLOV and now Zinia-2 fields. 

Update: Subsea7 said June 28 2018 it had received a 'substantial' contract from Total for engineering, procurement, installation and commissioning (Epic) of the subsea flowlines and umbilicals for the Zinia Phase 2 project; the contractor said it defines a substantial contract as being worth between $150mn and $300mn. The work will be installed in water depths from 800 to 1,000 metres offshore Angola.

Technip FMC said July 2 2018 it had been awarded a EPC contract by Total for subsea equipment on the Zinia field, without disclosing contract value.