Angola: TotalEnergies Launches the Kaminho Deepwater Project

Rhea-AI Summary

TotalEnergies has announced the Final Investment Decision (FID) for the Kaminho deepwater project in Angola, collaborating with partners Petronas (40%) and Sonangol (20%).

Located 100 km off the coast of Angola at 1,700 m depth, the project aims to develop the Cameia and Golfinho fields.

A Floating Production Storage and Offloading (FPSO) unit will be utilized, designed to minimize greenhouse gas emissions and eliminate routine flaring. Production is expected to start in 2028, reaching up to 70,000 barrels of oil per day.

Over 10 million man-hours will be required in Angola, mainly for offshore operations and local construction. TotalEnergies and Sonangol also signed a Memorandum of Understanding focused on decarbonization and renewable energy.

The project is economically viable with a breakeven under $30/barrel and will contribute to Angola's oil production and national revenue.

Positive

• TotalEnergies’ Kaminho project will potentially increase Angola's oil production, reaching 70,000 barrels/day by 2028.
• The project promotes local content with over 10 million man-hours required, supporting local employment and businesses.
• Economically viable with breakeven under $30/barrel, showcasing strong investment criteria.
• FPSO unit designed to minimize greenhouse gas emissions, aligning with environmental sustainability goals.
• TotalEnergies and Sonangol's partnership may advance research in decarbonization and renewable energy, potentially benefiting long-term sustainability.

Negative

• Long lead time until production starts in 2028, delaying potential revenue influx.
• High-risk investment due to deepwater operations 1,700 m underwater, posing technical and environmental challenges.
• Dependence on stable oil prices; despite a low breakeven, price volatility poses financial risks.

Insights

Financial Analyst

The Final Investment Decision (FID) on the Kaminho deepwater project marks a strategic milestone for TotalEnergies and its partners, Petronas and Sonangol. For retail investors, it's noteworthy that the project aims for a 70,000 barrels of oil per day production plateau, potentially boosting TotalEnergies' revenue streams starting in 2028. The targeted breakeven cost of $30 per barrel suggests a financially robust project, even under volatile oil prices. Given the long-term horizon, investors should weigh the potential returns against the substantial upfront investment and the geopolitical risks associated with Angola. The agreement also indicates a profound commitment to sustainable practices, which could enhance TotalEnergies' ESG (Environmental, Social and Governance) profile, appealing to socially conscious investors.

Energy Market Analyst

The Kaminho deepwater project is pivotal for Angola's energy sector, opening up the Kwanza basin for further exploration. Angola's strategy to remain a top African oil producer hinges on such developments. The project's focus on minimizing greenhouse gas emissions and eliminating routine flaring aligns with global energy transition trends, potentially making it more attractive to international stakeholders. However, the complexities of deepwater exploration and production in a nascent area like the Kwanza basin should be considered. While the environmental initiatives are commendable, investors should remain cautious about the technological challenges and the extended timeline to reach production.

Sustainability Expert

This project’s emphasis on minimizing carbon footprint and eliminating routine flaring is significant. The use of an all-electric Floating Production Storage and Offloading (FPSO) unit and full reinjection of associated gas into reservoirs are advanced steps toward reducing carbon emissions. For investors, this highlights TotalEnergies' commitment to sustainability and innovation in energy production. However, the promised environmental benefits will need to be verified over the long term. The Memorandum of Understanding with Sonangol to focus on methane emissions and renewable energy further underscores this commitment, positioning TotalEnergies as a progressive player in the oil and gas industry.

PARIS--(BUSINESS WIRE)-- Regulatory News:

Patrick Pouyanné, Chairman and CEO of TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE), met on May 20 in Luanda with João Lourenço, President of Angola, Diamantino Azevedo, Minister of Mineral Resources, Oil & Gas (MIREMPET), Paulino Jerónimo, Chairman and CEO of ANPG and Gaspar Martins, Chairman and CEO of Sonangol, to announce the Final Investment Decision of the Kaminho deepwater project.

TotalEnergies (40%), along with its Block 20/11 partners, Petronas (40%) and Sonangol (20%), announced the Final Investment Decision (FID) of the Kaminho project to develop the Cameia and Golfinho fields, located 100 km off the coast of Angola, by 1,700 m water-depth. This FID has been made possible thanks to a close collaboration with the concessionaire Agencia Nacional de Petroleo e Gas (ANPG).

The Kaminho project which is the first large deepwater development in the Kwanza basin comprises the conversion of a Very Large Crude Carrier (VLCC) to a Floating Production Storage and Offloading (FPSO) unit, which will be connected to a subsea production network. Designed to minimize greenhouse gas emissions and eliminate routine flaring, this FPSO is all-electric and associated gas will be fully reinjected into the reservoirs. Production start-up is expected in 2028, with a plateau of 70,000 barrels of oil per day.

The Kaminho project will involve over 10 million man-hours in Angola, mainly with offshore operations and construction at local yards.

On this occasion, TotalEnergies and Sonangol EP also signed a Memorandum of Understanding to share expertise on Research & Technology, notably in decarbonization of the Oil & Gas industry, with a strong focus on methane emissions reduction and renewable energies. TotalEnergies’ teams will provide support to Sonangol EP for the start-up and operation of its new Sumbe R&D center and for the development of the skills of the Sonangol research and technology teams, with a focus on reservoir geology, process electrification and photovoltaics.

“Building on our pioneering spirit and our long-term partnership with Angola, we are pleased to launch the Kaminho project along with our strategic partners, Sonangol and Petronas, and the strong support and confidence of the Angolan authorities. This project, which leverages innovation to fit with our investment criteria - breakeven under 30 $/b and carbon intensity of 16 kg CO₂e/boe - will become our seventh FPSO in the country and the first-ever development in the Kwanza basin”, said Patrick Pouyanné, Chairman and CEO of TotalEnergies. “We look forward to joining forces with Sonangol in technology to promote innovation and low-carbon technologies for the energy industry in Angola, in particular to slash methane emissions and contribute to the diversification of Angola's energy mix.”

Diamantino de Azevedo, Minister of Mineral Resources, Oil & Gas (MIREMPET), highlighted the importance of the partnership between TotalEnergies, Sonangol and Petronas to make possible the Kaminho project and said: “This partnership is for us of extreme importance, as it creates a joint operating entity between Sonangol and TotalEnergies in production phase. It is also relevant that the contracts signed today include national companies and contribute to local content with more than 10 million hours of work to be performed by local companies”.

Paulino Jerónimo, Chairman of the Board of ANPG, said: “The first development in the maritime zone of the Kwanza basin is important to showcase the opening of new oil frontiers in Angola, and it’s part of our strategy to keep Angola on the top of African oil producers, bringing important income to our economy.”

Gaspar Martins, CEO Sonangol, said: “The final investment decision of Kaminho project materializes the commitment and efforts made by the Angolan government, through its Ministry and National Concessionaire, and TotalEnergies, Sonangol and Petronas as partners. They allowed the right conditions to contribute to increasing national production of oil and natural gas, and with that the revenues for the country”.

Tan Sri Tengku Muhammad Taufik, Petronas President and Group CEO, said, “This milestone is in line with Petronas’ continued efforts to strengthen our international portfolio by participating in prospective regions in Africa with trusted partners. Reaching the FID for this development in the Kwanza basin further demonstrates our steadfast commitment to deliver much-needed reliable energy to our customers and sustainable long-term value to our stakeholders.”

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TotalEnergies in Angola
TotalEnergies has been present in Angola since 1953 and today employs around 1,500 people across different business segments. With a diversified portfolio, deep offshore operated assets representing more than 45% of the country’s oil production, service stations in partnership with Sonangol and renewable energy projects, TotalEnergies in Angola is a key player in supporting the country’s sustainable energy transition.

Block 20/11
TotalEnergies E&P Angola Block 20 operates Block 20/11 with a 40% interest, alongside Petronas Angola E&P Ltd (PAEPAL, 40%) and Sonangol Pesquisa & Produção SA (20%)

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

@TotalEnergies - TotalEnergies - TotalEnergies - TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

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TotalEnergies

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Source: TOTALENERGIES SE

FAQ

What is the TotalEnergies Kaminho deepwater project?

The Kaminho project is a deepwater oil development by TotalEnergies, Petronas, and Sonangol in Angola's Kwanza basin, expected to start production in 2028.

When will the Kaminho project start producing oil?

The Kaminho project is expected to start producing oil in 2028.

How much oil will the Kaminho project produce daily?

The Kaminho project aims to produce up to 70,000 barrels of oil per day.

What is the breakeven price for the Kaminho project?

The breakeven price for the Kaminho project is under $30 per barrel.

What environmentally friendly measures are included in the Kaminho project?

The Kaminho project includes an all-electric FPSO unit designed to minimize greenhouse gas emissions and eliminate routine flaring, with associated gas fully reinjected into reservoirs.

Who are the partners in the Kaminho project by TotalEnergies?

The partners in the Kaminho project are TotalEnergies (40%), Petronas (40%), and Sonangol (20%).

How will the Kaminho project impact local employment in Angola?

The Kaminho project will involve over 10 million man-hours in Angola, mainly supporting local employment and businesses.