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Integrated oil and gas company TOTAL S.A. (TOT - Analyst Report) is set to expand its footprint in Africa by developing ultra-deep offshore assets in Angola. TOTAL along with its joint venture partners will develop the Kaombo project. This has a daily production capacity of 230,000 barrels and an estimated reserve of 650 million barrels.

The project located 260 km (161.6 miles) off the shore of the Angolan capital is in water depths ranging from 1,400 meters (4, 593.1 feet) to 1,900 meters (6,233.6 feet). The plan is to develop 6 of the 12 discoveries made in Block 32. TOTAL is the operator with a 30% interest.

Total capital investment of $16 billion is estimated to be 20% less than previous projections with the project scheduled to come online in 2017. TOTAL’s expertise and knowledge in deep water drilling technology has helped in the efficient designing and lowering of capital costs. The investment in Angola fits well with TOTAL’s strategy to concentrate on assets in which it has a majority working interest.

Africa has been a major contributor to TOTAL’s oil and gas production with 29% of its 2013 output coming in from African countries. In this Angola has played a major role with production volumes increasing steadily over the past three years.

Per a report from Organization of the Petroleum Exporting Countries (“OPEC”), Angola’s proven crude oil reserve is 9.06 billion barrels, while proven natural gas reserves stand at 275 billion cubic meters. However, the Angola government claims that the estimated oil reserve is 4 billion barrels higher than what OPEC estimates.

Despite the disagreement over reserve volumes, it is certain that Angola has substantial volumes of fossil fuel at its disposal. This reserve rich Southern African country is drawing international investments. Major international oil and gas companies operating in Angola include Exxon Mobil Corporation (XOM - Analyst Report), Chevron Corporation (CVX - Analyst Report) and Marathon Oil Corporation (MRO - Analyst Report) among others.

TOTAL, a Zacks Rank #3 (Hold) stock, has been operating in Angola for the last six decades and is gradually expanding its operations there through steady investments.

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Read the Full Research Report on MRO

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