Bloomberg News

Angolan Oil-Worker Housing Offers Choice to Chevron’s Fort (2)

February 24, 2014

A housing shortage near Chevron Corp. (CVX:US)’s residential compound in Cabinda province of Angola, Africa’s second-largest crude oil producer, is driving a construction boom as more than a decade of peace following a civil war lessens the need for fortified dwellings.

Growth in the nation’s oil industry has helped spur a dearth of accommodation in Cabinda’s eponymous capital, where Chevron’s offshore $5.6 billion Mafumeira Sul project is located. While the company houses some 6,000 people at the Malongo compound, built in the 1960s, capacity constraints mean contractors have had to seek lodging outside the base that protected employees through decades of conflict.

Cabinda’s under-supplied market has raised rental and property prices and created a proliferation of cramped, basic facilities. It’s also prompted almost $200 million of developments that will house local residents and workers of companies such as Schlumberger Ltd. (SLB:US), the world’s largest oilfield-services provider, and help fulfill the state’s push to integrate oil companies into the wider economy.

“Malongo is like a colony and we have to break it up because the war is over,” Gianni Martins, a petroleum engineer at state oil company Sonangol EP, said in an interview in Cabinda. “The expats have needs, the locals have services and we have to bring them together.”

The $100 million Futila Sea Breeze Condominium will open the first of its 464 luxury units in 2015, said Pedro Godinho, president of Servicab SA, the developer of the project.

Housing Developments

The nearby $97 million Malembo Development Center, being built by Operatec Lda and OPI International, expects to fill 280 of its 1,440 beds this quarter with employees of companies such as Schlumberger, Saipem SpA (SPM) and Fugro NV (FUR), the biggest deepwater-oilfield surveyor.

Chevron’s 2,965-acre (1,200-hectare) Malongo compound became a veritable fort to survive the nation’s 1961-1975 struggle for independence followed by a 27-year civil war between the ruling Popular Movement for the Liberation of Angola and the U.S.-funded rebel National Union for the Total Independence of Angola, known as Unita, which ended in 2002.

At one point in a twist of the usual Cold War alliances, Cuban troops were used to protect Chevron’s Cabinda installations from Unita attacks.

Cabinda province, with a population of about 440,000, half of which live in rural areas away from the coast, is separated from the rest of Angola by a sliver of the Democratic Republic of Congo. The predominant language in some areas is French, while Portuguese is spoken in the rest of the country.

Capital’s Improvements

Companies including Total SA (FP), Braspetro BV and Eni SpA (ENI) have wells offshore the province, which used to comprise most of Angola’s production and now makes up about a quarter of output. The Organization of Petroleum Exporting Countries member pumped 1.48 million barrels a day in January, according to data compiled by Bloomberg. Crude for immediate delivery rose 0.2 percent to $102.36 a barrel at 2:29 p.m. in Luanda, Angola’s capital.

The province’s capital is studded with unfinished or abandoned low-rise buildings. Governor Aldina Matilde da Lomba embarked on a program in the past year to improve the core area and roads. The main port has been dredged and expanded while a nearby deepwater port is being readied, Pedro Sia, her spokesman, said in a Feb. 20 phone interview.

Cabinda Separatists

Most of the province-managed Olympic Village development, built for civil-war veterans, is being rented to oil workers, Sia said.

Luis Franque, chief of staff for Macario Romao Lembe, the deputy governor for economic affairs, denied in a Feb. 20 phone interview the village was for veterans and said the government built the 150-unit Condominio Santa Catarina for the soldiers.

The separatist Front for the Liberation of the Enclave of Cabinda, known as FLEC, has conducted a guerrilla campaign for Cabindan independence for the past few decades, a struggle unrelated to Angola’s 27-year civil war. FLEC claimed responsibility for killing two Togolese soccer team members in an ambush on a bus travelling to the African Cup of Nations tournament in Angola in January 2010.

“People see multinationals making a lot of money from their resources and they get nothing,” Servicab’s Godinho said in an interview in Luanda. “People are starving and with an AK-47 they have nothing to lose, so it makes people think why we have problems with FLEC.”

Isabel Ordonez, a spokeswoman based in Houston for Chevron, said by e-mail on Feb. 19 she couldn’t immediately reply to a request for comment.

Swimming Pools

Halliburton Co., the world’s biggest provider of hydraulic fracturing services, is also building accommodation in Cabinda for its workers, Sid Whyte, then company country manager, said in an interview last year. Further details weren’t immediately available.

The Malembo compound, to be constructed over four phases with swimming pools, gyms, central dining and a 600 square-meter (6,458 square-foot) retail space for local businesses, is on a 346-acre site just 3.5 kilometers (2.2 miles) from Malongo.

“The center can serve the needs of Chevron, the contractors and the community since it is open to not only to the contractors, but for locals to provide services,” Clay Etheridge, a director of MDC, said in an interview. “It’s win-win for the community and the oil sector.” The center is looking to house clients’ industrial workshops as well as their employees, he said.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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Companies Mentioned

  • CVX
    (Chevron Corp)
    • $128.7 USD
    • 0.23
    • 0.18%
  • SLB
    (Schlumberger Ltd)
    • $115.32 USD
    • 0.62
    • 0.54%
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