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Angola's CLOV Phase 2 offshore project comes onstream; fifth startup in recent months

Highlights

Phase 2 will pump 40,000 b/d, CLOV currently produces near 100,000 b/d

Production hits 17-year lows in 2021, could stabilize in 2022

Angola produces heavy sweet crude, popular among Chinese refiners

Production from Phase 2 of the CLOV oil development in Angola operated by TotalEnergies has started, making it the second field to come online in the past week for the OPEC member, Angola's Oil, Gas and Biofuels National Agency said Dec. 2.

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Angola's crude production has been on a downward spiral in the past five years because of technical and operational problems at a few fields, aggravated by a lack of upstream investment and incentives.

But there has been a slew of new startups after BP's 30,000 b/d Platina, Eni's 15,000 b/d Cabaca North, 10,000 b/d Cuica and TotalEnergies' 40,000 b/d Zinia Phase 2 projects have all come onstream in the past seven months.

The CLOV Phase 2 project, which has an estimated resource base of 55 million barrels of oil, will see its production peak at 40,000 b/d.

Production from Phase 1 of the CLOV development has ranged 90,000-120,000 b/d, in recent years, according to S&P Global Platts estimates.

The development, which include the drilling of seven wells, is located about 150 km off the Angolan coast with a water depth of between 1,100 and 1,400 m.

"The start of Phase 2 of CLOV comes at the right time and with the right objective, as Angola needs to mitigate the decline in its oil production and work to increase it in the near future," said Belarmino Chitangueleca, acting CEO of Oil, Gas and Biofuels National Agency (ANPG).

The ministry had previously said these projects could help stabilize its oil production at 1.3 million b/d in the next three years.

Nicolas Terraz, the president of TotalEnergies Exploration and Production division, said this project is in line with company's "strategy of concentrating its investments on projects cost-effective and that contribute to lowering the average intensity of GHG emissions from our production."

Block 17 is operated by TotalEnergies, with a 38% interest along with Equinor (22.16%), ExxonMobil (19%), BP (15.84%) and Sonangol (5%).

Output outlook

Angola, which used to be Africa's second largest oil producer until early 2021, has its seen output tumble to 17-year lows. Crude output has averaged around 1.13 million b/d so far this year compared with 2008 when production peaked at 1.9 million b/d.

ANPG has previously said these recent startups could help Angolan oil production reach 1.3 million b/d in the next three years.

The country, which typically produces heavy but sweet crude, has traditionally been among the top suppliers to China. But key fields like Cabinda, Dalia, Girassol, Hungo, Kissanje, Pazflor and Plutonio have all declined and matured at the same time.

The West African producer is now banking heavily on BP, Eni, TotalEnergies and ExxonMobil, all of which have recently resumed exploration and drilling work.

TotalEnergies is expected to drill the Ondjaba-1 wildcat exploration well in Block 48, and it is also finalizing the Chissonga field development in Block 16.

The country's much-touted new licensing round, which include onshore blocks in the Kwanza, Namibe and Benguela basins, has also recently opened.