UPDATE 1-Total set to push ahead with Angolan Kaombo oil project

Fri Apr 11, 2014 3:23pm EDT

(Adds details, quotes)

PARIS, April 11 (Reuters) - Total is on the verge of making a final investment decision on Angola's Kaombo oil project after lowering the costs by $4 billion, the French oil major's chief executive said on Friday.

"There are projects which had problems, like Kaombo, because they were too expensive. We've managed to cut costs by $4 billion," Christophe de Margerie told reporters on the sidelines of an oil conference in Paris.

Asked if it had made a final investment decision, the CEO said: "We're on the verge."

A source with knowledge of the matter said the company might make an official statement on Monday morning.

The decision has been delayed repeatedly because of the large costs related to the ultra-deep offshore project, which Total operates. Angola is Africa's second largest oil producer.

The overall investments in Kaombo would be down to $16 billion from $20 billion.

The field is expected to produce 230,000 barrels of oil equivalent per day, with a start-up date in 2017.

Sonangol P&P has a 30 percent stake in the project, Sonangol Sinopec International has 20 percent, ExxonMobil's Esso unit holds 15 percent and Total owns the remaining 30 percent.

Oil companies have been complaining about what they call "cost inflation" in recent years, especially in countries that insist on local content, the practice of employing and training staff from producing countries rather than expatriates. (Reporting by Michel Rose; editing by John Irish)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.