Why Angola May Be the Next OPEC Darling

The French major Total is following the bread crumbs offshore Angola, and now the country aims to re-establish itself as a major oil player by courting investors to onshore fields.

Apr 16, 2014 at 1:21PM

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out these recent articles.

French energy company Total (NYSE:TOT) said it was sinking $16 billion into oil projects off the coast of Angola. The French major is following the bread crumbs offshore Angola and now the country aims to reestablish itself as a major oil player by courting investors to onshore fields.

Total said it made a final investment decision to develop the deepwater Kaombo project off the coast of Angola. High costs had delayed the decision, though Total now says it could produce as much as 230,000 barrels of oil per day once operations begin in 2017.

"Angola remains a priority country for Total" Yves-Louis Darricarrere, president of upstream operations for the company, said in a statement.

The French company last week celebrated 60 years of operations in Angola, which was plagued by civil war from 1975 to 2002. Since war ended, Total said it's been the lead oil company in Angola with approximately 600,000 bpd in production.

Angola's first commercial oil discovery coincided with Total's entry into the country. Angola became a member of the Organization of Petroleum Exporting Countries in 2007 and produced an average 1.7 million bpd of crude oil last year.

Most of the country's oil production comes from deepwater deposits, where production has grown exponentially since the end of civil war. In early April, Genel Energy, led by former BP boss Tony Hayward, said it grabbed a stake in oil interests off the coast of Angola, where reserves are expected to be on par with pre-salt discoveries offshore Brazil.

Genel said the Angolan prospects are "low risk" and in the "multi-billion barrel" range. Hayward said the acquisition was a unique opportunity to wade into a region that he said would "add significant shareholder value through the drill bit in Africa."

Oil companies are already feeling bullish about the emerging prospects across the Gulf of Guinea, where the Jubilee field is already producing an estimated 104,000 bpd. 

State-owned Sonangol aims to raise the level of crude oil production to 2 million bpd by next year with the help of deepwater prospects like Total's Kaombo. OPEC, in its market report for April, said crude oil production was down more than 9 percent from February to 1.5 million bpd, however. Like Brazil, complexities involved in offshore production have led to prolonged maintenance and offshore reservoirs have experienced a steep rate of decline.

Now, however, Sonangol said it was ready to launch a tender for 10 onshore blocks May 30. The company said the blocks up for bidding may hold an average 700,000 barrels of oil each, which would offset any production woes offshore. Oil production from Angola accounts for about 45 percent of its gross domestic product and around 90 percent of its exports. Already, it's one of the lead suppliers to the Chinese market.  Though the cost of operating in deep waters is escalating, Angola's energy sector could have the right mix for the patient investor.

OPEC is absolutely terrified of this game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

 

Written by Daniel J. Graeber at Oilprice.com.

The Motley Fool recommends Total SA. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers