Total to Drill Offshore Angola, South Africa After Clov Starts

Total SA is preparing to drill an exploratory well beneath a layer of salt in waters off Angola this month after successfully starting production at another of the country’s offshore fields yesterday.

The well in Angola’s Kwanza Basin has been earmarked by the explorer as “high impact” as has another scheduled to be drilled at the start of July off South Africa, said Guy Maurice, head of Africa in the exploration and production division of France’s biggest energy company. The wells are part of a push that began more than three years ago to uncover large reserves of hydrocarbons.

“We’re after elephants,” he said in the interview, referring to discoveries holding half a billion barrels of oil equivalent or more. With the so-called pre-salt Kwanza exploration, Angola is betting its basins mirror the geology off Brazil, where multibillion-barrel finds have been made.

The Angolan field started yesterday, called Clov, will develop proven and probable reserves of more than 500 million barrels, Total said in a statement. Located in Block 17 off the capital, Luanda, it’s expected to generate 160,000 barrels a day. The output will help fill a gap for Total from the giant Kashagan development in Kazakhstan that has been halted, possibly for years, as pipelines are replaced due to leaks.

Clov will generate $1.5 billion in cash flow annually for three years after the field reaches a production plateau in 2015, Maurice said yesterday.

With output from its 34 planned wells, Clov and the three other developments in Block 17 will propel the area into the French company’s “most prolific production site” with 700,000 barrels a day, according to the statement. Total operates Clov with a 40 percent stake while Statoil ASA has 23.3 percent, Exxon Mobil Corp. has 20 percent and BP Plc 16.7 percent.

Nigerian Sale

Separately, Maurice said the company is in the “final stages” of completing a sale of a stake in the Nigerian offshore oilfield called Usan. Sold to China Petrochemical Corp. for about $2.5 billion, the deal announced in November has taken longer than expected to close, according to Total.

Chief Executive Officer Christophe de Margerie is selling assets to help pay for development of megaprojects like Clov, which cost about $7 billion.

Total has targeted $15 billion to $20 billion of asset sales from 2012 to 2014 and the figure could reach $25 billion, de Margerie said in February, without giving a timeframe.

The company is counting on projects like Clov to increase its oil production to 2.6 million barrels a day in 2015 and to about 3 million barrels two years later. Total has said output will be unchanged in 2014 as it ramps up projects to make up for a loss of 140,000 barrels a day from a concession in Abu Dhabi.

Before it's here, it's on the Bloomberg Terminal.