Jun 27, 2024
Kaminho Development: Igniting a New Era of Growth in the Kwanza Basin
The Kaminho development represents a significant milestone for Angola in the Kwanza Basin, signaling the region's potential for future growth and success. Through its innovative approach, strategic focus, and collaboration with partners, TotalEnergies is spearheading the development of deepwater projects in the basin.
This groundbreaking project involves converting a Very Large Crude Carrier (VLCC) into a Floating Production Storage and Offloading (FPSO) unit, which will be connected to a subsea production network. The project encompasses the Cameia and Golfinho fields and sets the stage for future developments in the Kwanza Basin.
Despite challenges in gas commercialization due to the lack of nearby export gas facilities, TotalEnergies has made the decision to move forward with a primary focus on producing condensate volumes while minimizing gas flaring volumes through gas injection. The final investment decision (FID) was announced in May 2024, with first production expected in 2028.
The successful execution of the Kaminho development paves the way for further exploration and production activities in the Kwanza Basin, as additional large discoveries are needed to reverse the country's declining production. This development showcases the technical capabilities and expertise of the operators and highlights the importance of collaborative efforts between industry players and the Angolan government in promoting investment and advancing the country's oil and gas sector.
TotalEnergies is believed to have received improved fiscal terms that are equivalent to or better than the marginal field terms announced by the government in 2018. These marginal field terms include a reduced royalty of 10% and a reduced income tax rate of 25%. With the application of these marginal field terms, the project's Net Present Value (NPV) is estimated to range between $1,500 and $4,700 million USD. Additionally, the project's internal rate of return (IRR) is projected to range between 15.3% and 29.5%. The estimated total capital cost (CAPEX) for the Kaminho development is in the region of $5,800 million USD, with an annual operating cost of approximately $220 million USD.
As the Kaminho development progresses towards first oil in 2028, it sets the foundation for continued development and production activities in the basin, contributing to Angola's economic development and the advancement of the oil and gas industry in the Kwanza Basin.
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.