ExxonMobil Output Start Pushes Angola Close To OPEC Quota Cap
ExxonMobil Corp.'s announcement that oil production has started at its latest offshore site in Angola pushes total national output close to its Organization of Petroleum Exporting Countries production cap.
This raises questions about whether private oil companies might soon be forced to constrain production to stay within the quota.
ExxonMobil said Wednesday oil production had begun at Kizomba C, a deepwater development comprised of three fields - Mondo, Saxi and Batuque - off the coast of Angola that is eventually expected to produce 200,000 barrels a day.
Neil Duffin, president of Exxon Mobil Development Co., told The Associated Press the project currently is producing 80,000 barrels a day.
That raises Angola's overall output just shy of the 1.9-million-barrel-a-day quota that it was assigned by OPEC starting this year.
A Dow Jones Newswire survey of OPEC output this week, based on data supplied by primary sources, trader and analysts, put Angola's December production at 1.86 million barrels a day.
Angola's quota, announced by OPEC in December, was surprisingly low with many expecting a more generous cap that would have been more accommodating, with upcoming projects set to ramp up capacity to as much as 2.7 million barrels a day within a decade. Angolan state oil company officials had previously suggested they were seeking a quota of some 2.5 million barrels a day.
Christopher Brown, a Sub-Saharan Africa analyst at energy consultancy Wood Mackenzie, said Angolan production capacity could reach 2 million barrels a day as early as this month.
Brown said that in Nigeria, another OPEC member, an even cut was imposed across the entire country to keep production within the quota.
In Angola,"we'd envisage that companies may be required to restrict production by several percent," Brown said.
It is unknown how strictly Angola will enforce the cap. OPEC members in the past have often failed to comply their quotas, and Angola may be reluctant to reign in its ambitious production plans.
Exxon is the operator of the Kizomba C block with a 40% stake. The other equity partners are BP PLC (BP) with 26.67%, Eni SpA (ENI.MI) with 20% and StatoilHydro (STO) with 13.33%.
Copyright (c) 2008 Dow Jones & Company, Inc.
Operates 13 Offshore Rigs
- Oil, Gas Leaders Warn Trump He Risks Harming Their Industry (Mar 16)
- Exxon Mobil Partnering With Pakistan for Third LNG Terminal (Mar 16)
- Tillerson Has 180 Million Reasons Not to Return to Oil Industry (Mar 13)