Eni to develop deepwater Angolan oil fields with SBM Offshore's FPSO Xikomba

By Phaedra Friend Troy

Italian producer Eni (NYSE:E) has signed a letter of intent (LOI) with SBM Offshore for a 12-year lease of its FPSO Xikomba to develop the oil-rich deepwater Block 15/06 offshore Angola in West Africa.

The FPSO Xikomba has been under contract with ExxonMobil (NYSE:XOM) in Angola since 2003, but the super-major recently terminated the contract on the Floating Production Storage Offloading vessel. The FPSO is scheduled to stop operations for ExxonMobil in the first half of 2011.

Following this, the FPSO Xikomba will undergo a major upgrade for its work with Eni to meet new project-specific requirements.

The LOI involves the early phase of the project and permits SMB Offshore to start engineering and procurement work for the upgrade. The full contract for the lease and operation of the FPSO is expected to be signed soon.

Multiple oil discoveries have been made on deepwater Block 15/06 offshore Angola, including the Mpungi, Cabaca Norte, Cabaca South East, Sangos, N’goma, Nzanza and Cinguvu

Currently, two oil production hubs are planned to develop the fields, an East Hub and a West Hub.

Awarded in 2006, Eni serves as operator of the block with 35 percent interest, and Sonangol serves as the Concessionaire. Project partners include Sonangol with 15 percent, SSI Fifteen with 20 percent, Total with 15 percent, Falcon Oil with 5 percent, Petrobras with 5 percent and Statoil with 5 percent.

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