Exxon Mobil said Wednesday it has begun oil production from a multibillion-dollar project off the west African coast. The company plans to drill more wells there than any of its other offshore sites.
The world's largest publicly traded oil company is the operator and 40 percent equity stakeholder in the Kizomba C development, located in about 2,400 feet of water roughly 90 miles off the coast of Angola.
Exxon Mobil's total investment will be about $2 billion, Neil Duffin, president of Exxon Mobil Development Co., told The Associated Press. The other equity participants are BP Exploration (26.67 percent), ENI Angola Exploration (20 percent) and Statoil-Hydro Angola (13.33 percent.)
At present, the project is producing about 80,000 barrels of oil a day, Duffin said. It's expected to reach peak production of 200,000 barrels a day by the third quarter of this year, the Irving, Texas-based company said.
Kizomba C's potential daily output is a small fraction of Exxon Mobil's global production, which the company has said amounted to about 4.2 million barrels of oil equivalent a day in 2006, the latest figures available. Exxon Mobil produces about 3 percent of the world's oil.
But Lysle Brinker, an analyst with the energy consulting firm John S. Herold, said the startup is the latest in a number of successful developments for Exxon Mobil in that part of the world.
"Angola has been one of the primary drivers behind Exxon's volume growth over the last few years and is going to continue to be," Brinker said. "They're executing seamlessly, it seems, as are a number of the other partners."
Angola, the second-largest sub-Saharan oil producer after Nigeria, produces about 1.4 million barrels a day. It was expected to reach 2 million barrels a day in 2007.
Exxon Mobil shares fell 11 cents to $89.94 in early trading Wednesday. Its shares have traded in a range of $69.02 to $95.27 in the past year.
Oil futures have fluctuated in recent trading sessions after reaching $100 a barrel for the first time last week. Analysts say the volatility reflects a tussle between investors who think the economy is cooling and that oil is overvalued, and those who see oil as a safe haven in an unsettled financial environment.
Kizomba C includes two floating production, storage and offloading vessels. Its eventual 36 wells will make it the largest subsea development operated by Exxon Mobil.
Exxon Mobil said it now has started seven new projects in the past year, in places such as the Netherlands, Norway and Qatar.
The company said last March it will spend some of its massive profits on more than 20 new global projects in the next three years, investments expected to add 1 million oil-equivalent barrels a day to the company's volumes at peak production.
Exxon Mobil posted the largest annual profit by a U.S. company - $39.5 billion - in 2006. It's expected to report fourth-quarter 2007 and full-year earnings in the coming weeks.