Cabinda's Block Zero is one of the world's most lucrative oil fields, although new offshore discoveries elsewhere are diminishing its net contribution to Angola's oil production
Cabinda is the goose that laid the golden egg for Angola. The tiny enclave, which is entirely separate from the rest of Angola in geographical terms, seems at times to exist solely for the purpose of producing oil.
Angola's Oil Minister Jose Botelho Vasconcelos stresses how essential Cabinda is for the country's overall economy, pointing out that the province contributes the majority of the oil revenues that currently make up 42 percent of the gross national product, and 90 percent of the state budget.
In production terms, Cabinda generates about 60 percent of the country's oil. However, major new deepsea discoveries off the provinces of Zaire and Luanda mean that, in terms of oil, Cabinda is no longer the only jewel in Angola's crown.
Indeed, with so much attention currently focused on the giant Dahlia and Girassol oil fields in Block 17, Cabinda has somewhat faded from the limelight. Still, some of Angola's most productive oil fields today lie in Block Zero and Block 14, both of which lie off the Cabindan coast.
Major new oil discoveries were made in Block 14 during the late 1990s, the most sensational being the vast Kuito oil field, as well as other large deposits named Benguela, Belize and Landana. Kuito started producing oil in the last quarter of 1999, and by the following year, 100,000 barrels per day (bpd) were being pumped from the field. Block 14 is operated by ChevronTexaco, with a 31 percent interest, through its local subsidiary Cabinda Gulf Oil Company or Cabgoc. The rest of the consortium comprises state oil company Sonangol with 20 percent; Italy's Agip and TotalFinaElf also have 20 percent; and Petrogal brings up the rear with 9 percent.
However, Cabinda's other main offshore deposit, Block Zero, is the bedrock of Angola's petroleum industry. It has been operational for over two decades, and has served as the main supplier of oil to the country. Block Zero's numerous oil fields are of excellent quality, and it is for this that they are most famous. The enormous block has been divided into three areas, each one subdivided into many different oil fields named after small towns in Cabinda.
Original concession rights to Block Zero were granted in 1957, and exploration began soon afterwards. In 1962, large quantities of oil were found in shallow waters, just 10-25 yards from what was then the village of Malembo on the Cabindan coast. Production started in 1968, and since then Block Zero has produced in excess of two billion barrels of oil. In 1998, Block Zero established a single day production record of 510,451 barrels.
Again, ChevronTexaco is the lead operator with a 39.2 percent share; Sonangol has 41 percent; TotalFinaElf has 10 percent; and Agip 9.8 percent. This partnership ratio has existed since the early 1990s. Sonangol previously had a 51 percent stake in Block Zero, but sold 10 percent of its share to Elf Acquitaine before the national elections of 1992. Sonangol did not consult Cabgoc about this sale, which resulted in some tension between the two companies.
Inevitably, ChevronTexaco has been deeply influential in the development of the province although the company's operational base at Malongo terminal is a world apart from the rest of the province. Guarded by private security companies, Malongo is completely sealed off from Cabinda proper. Apart from the oil storage depots and a small topping-type refinery, the complex serves as a residential area for Chevron's expatriate employees, and most consumable items, including water, are flown in from overseas.
Most of Cabgoc's expatriate workers, the majority of whom are Americans, have a limited exposure to the real Cabinda. They work according to a five-week-in, five-week-out schedule, leaving Malongo in buses, flying out of the local airport to Luanda, then on to the U.S. Last year, the Angolan national airline, TAAG, started a weekly direct flight from Luanda to Houston, an indication of just how close these two petroleum universes have become.
Cabinda's former Governor Amaro Tati is keen to encourage expatriates to stay in Cabinda. "If we had better hotels and other facilities to offer them, I'm sure they wouldn't spend 35 days working in Malongo and 35 days back home in the U.S.," he says, adding that they have renovated at least one hotel recently.
Most local staff do not live within the Malongo settlement, however, and there is some resentment about the differences in living standards. There is also resentment from Cabindans who do not have jobs with Cabgoc. Complaints about oil spills have come from Cabindan fisherman, who have demanded compensation from Cabgoc. In general, though, the relationship between Cabgoc and the Cabindan population is nowhere near as tense as in Nigeria, where oil facilities are frequently destroyed by local communities who feel they have been robbed of the natural wealth of their land.
In order to minimize tensions with the local community in Cabinda, Chevron has recently contributed to local social development projects. As Amaro Tati explains, "Together with Chevron, we have started to build schools in Luani and Bulo, and low income housing in Miconje."
Cabinda's education system is, by Angolan standards, fairly advanced, as it already has some degree of tertiary education. This is a result of being the richest province in Angola, as locals enjoy the concrete benefits of the ten percent of oil revenues remitted to the province.