Angola to Cut its Growth in Oil production in 2008

Angola to Cut its Growth in Oil Production in 2008

12-11-2007

Angola will have to adjust, as of 2008, the strong growth of its oil sector to the production quota attributed by the Organization of Oil Producing Countries (OPEC), which is very similar to current production levels.

Both the government and the oil companies showed little concern about the Angolan quota of 1.9 million barrels per day being lower than projected oil production for the end of this year - 2 million barrels, with a tendency to rise.

“We don’t need to produce [that much]. We can alter our production at any time. We don’t need to spend everything, we can spare that,” Angola’s oil minister, Desidério Costa told the press.

Speaking just after the formal announcement of the Angolan quota, which is applicable as of January 2008, exactly one year after Angola joined OPEC, the Angolan minister gave assurances that average production in 2008 would remain at the 1.9 million barrels stipulated, although at certain times it may exceed this.

“We are not in OPEC to be against OPEC, we are there to work together,” said Costa on the sidelines of the oil cartel’s conference in Vienna.

Export figures for this year indicate that in six out of the last eight months Angolan production reached record levels.

Angola is increasingly seen as a viable alternative for large oil companies to guarantee the future growth of their reserves and production, as they struggle with reserves drying up, difficulty in finding new reserves and political obstacles to operating in larges producing countries such as Russia and Venezuela.

For 2008, three new oil fields are expected to go into production in Angola, which will represent and additional production capacity of some 350,000 barrels per day.

The largest of this, Mondo, operated by US company Exxon Mobil will start operating in the next few weeks and, when it is running at full capacity, is expected to produce 100,000 barrels per day.

Similarly to other oil companies in Angola, Exxon has said it will "entirely respect" its legal obligations.

The Plutónio oil field, operated by BP, which began producing oil in October, is expected to export almost 200,000 barrels per day next year.

BP’s Robert Wine, has said he is waiting for Angola to “talk to the operators,” which so far has not happened, explaining “the mechanisms it has decided to adopt,” to apply the production quota.

France’s Total, which produces around 500,000 barrels per day in the Girassol and Dalia fields, has announced that, for now, it maintains its growth forecasts.

Companies such as Repsol, Gas Natural, Eni, Sinopec and Statoil also operate in Angola's oil and gas sector.

The application of a production quota on Angola has coincided with the process to grant new concessions on 10 oil bloc, which is due to be concluded in July of next year.

The tender, open to Angolan and foreign oil companies, will be for concessions in the Centro bloc of the Cabinda Onshore Zone and blocs 11 and 12 of the Kwanza Onshore Area.

The tender will also cover concessions in bloc 9 (shallow water), blocs 19, 20 and 21 (deep water) as well as blocs 46, 47 and 48 (ultra-deep water).