Angola and French oil major Total have begun production on a new $16 billion offshore oil project.
The Project Kaombo is placed 250km from Luanda, the capital of Angola. Its primary target is to aid the Angolan economy which fell into a profound crisis after oil price dips in 2014. The Kaombo project is the largest offshore operation ever launched in Angola.
The project will produce 230,000 barrels per day. That is equal to 15% of Angola’s current production. The companies constructed a record-breaking network of more than 300 kilometers of tubes. It lays up to 2,000 meters under the sea to raise hydrocarbons on the surface. Two vessels will pump crude from six subsea fields which spread out on a surface of 800 square kilometers.
Angola’s Social and Economic Development minister Manuel Junior announced that oil remains a critical player in spite of the government’s effort to diversify the economy.
Total extracts nearly 700 barrels daily, or 42% of the country’s output. Thus, that makes the company the largest producer in Angola. The French oil conglomerate has led the project in partnership with Angolan state oil company Sonangol, US oil major Esso, and Portugal’s Galp.
Angola is Africa’s second leading oil exporter. However, its nationals remain impoverished, making little benefit from energy revenues.
As told by the United Nations, the oil sector represents 97% of Angola’s exportation and 80% of public revenues and employs only one percent of the population. The International Monetary Fund (IMF) in June claimed the decrease in oil prices dramatically reduced Angola’s tax revenues and exports. Subsequently, growth came to a halt, and inflation accelerated sharply.