Exxon Readies Kizomba Satellites

ExxonMobil Corporation’s ( XOM - Analyst Report ) subsidiary – Esso Exploration Angola Limited – began production from deepwater Kizomba Satellites project, offshore Angola.

Output from the Kizomba Satellites Phase 1 is eventually estimated to reach 100,000 barrels of oil per day from the Mavacola and Clochas fields, located 95 miles off the coast of Angola, in water depths of about 4,500 feet in Block 15. Total recoverable reserves from these fields are projected at around 250 million barrels.

Development work during Phase 1 will comprise subsea tieback to the existing Kizomba A and B floating, production, storage and offloading (FPSO) vessels. This method will boost the current output level as well as improve competency of on-block facilities, without employing another FPSO vessel.

ExxonMobil has made an investment of around $1.5 billion in superior quality of local resources and contracts for fabrication, logistics support and training of Angolan personnel. Over the years, Angolan contribution in Block 15 has improved considerably with major companies like ExxonMobil and the Block 15 Contractor Group training them in project essentials.

ExxonMobil has sourced nearly 100% of the equipment – topsides and subsea – from the local markets, and also provided over 10,000 hours of professional training to Angolan contractors working on the project.

Other projects in Block 15 comprise the Gas Gathering project, which began on-block gas treatment in 2011 and is supplying related gas to the Angola LNG facility in Soyo. Development planning is in progress at other discovered resources in the Block, such as the Kizomba Satellites Phase 2 and the 2009 Mondo South discovery sites.

ExxonMobil, the operator of Block 15, holds a 40% interest. The other partners BP plc ( BP - Analyst Report ) , Eni SpA ( E - Analyst Report ) and Statoil ASA ( STO - Analyst Report ) have stakes of 26.67%, 20% and 13.33%, respectively. The concessionaire is Angola’s Sonangol.

ExxonMobil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain a Neutral recommendation on the stock.