NEW YORK ( Trefis) -- Exxon Mobil (XOM) started production at Kizomba Satellites Phase 1 project in Angola last week.
The project in offshore Angola is expected to produce a total output of 100,000 bbl/day of crude as the fields are developed further.
Output from the new fields will be a major relief, as the company has seen its average crude oil production decline by 133,000 bbl/day in 2011 over the previous year.
Exxon will also benefit from new production in Nigeria and the completion of its Kearl oil sands project in Canada. Exxon and other oil companies are focusing on deepwater and remote resources to replace output declines from aging fields.
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The Kizomba project is located in Block 15, around 95 miles off the coast of Angola. The project is expected to recover up to 250 million barrels of oil and produce up to 100,000 bbl/day, according to the company.
Exxon is among the many energy companies involved in the exploration of offshore locations in Africa. Output from these projects is expected to compensate for declines from existing fields as well as help companies lower the impact of weak natural gas prices in the U.S.
Over the past two to three years, Exxon has looked to compensate for falling oil output with higher production of natural gas from onshore sources. The company became the largest producer of natural gas in the U.S. with its acquisition of XTO Energy in 2010. However, the sharp fall in natural gas prices is forcing players to target oil production.
In addition to the Kizaomba project in Angola, Exxon will also benefit from new production in Nigeria, where the company holds a 40% stake in new fields that are expected to add 70,000 bbls/day in production.
Exxon's liquids output will also see a boost by production from the Kearl oil sands project in Canada, which will produce 110,000 bbl/day. Exxon holds a 100% stake in the Kearl project. We expect new production from these projects to help the company maintain steady output through the year.
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