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Angola Joins OPEC

Angola’s oil concessions. Click to enlarge. Source: Sonangol.

At the OPEC meeting in Abuja, Nigeria earlier in December, the assembled members unanimously admitted the Republic of Angola—sub-Saharan Africa’s second largest oil producer behind Nigeria—as the twelfth full member of the organization, effective 1 January 2007.

The Conference also decided to reduce OPEC production by a further 500,000 barrels per day (bpd), effective 1 February 2007, “in order to balance supply and demand.”

OPEC’s view is that market fundamentals indicate a more than ample crude supply, high stock levels and increasing spare capacity. Although the global economy is forecast to continue to grow, economic growth is expected to slow down in 2007. Moreover, while world oil demand is estimated to increase by 1.3 million bpd in 2007, the Conference observed that this is likely to be more than offset by a projected increase of 1.8 million bpd in non-OPEC supply, its highest rise since 1984.

Decrease of production levels by OPEC Member Countries
(with the exception of Iraq)
in barrels per day
MemberDecrease per Doha Agreement
(Eff. 1 Nov. 06)
Additional decrease per Abuja Agreement
(Eff. 1 Feb. 07)
Total decrease (bpd)
Algeria 59,000 25,000 84,000
Indonesia 39,000 16,000 55,000
Iran 176,000 73,000 249,000
Kuwait 100,000 42,000 142,000
Libya 72,000 30,000 102,000
Nigeria 100,000 42,000 142,000
Qatar 35,000 15,000 50,000
Saudi Arabia 380,000 158,000 538,000
UAE 101,000 42,000 143,000
Venezuela 138,000 57,000 195,000
Total 1,200,000 500,000 1,700,000

With an ongoing oil boom, Angola’s economy has grown rapidly over the last few years. Approximately 90 percent of government revenues come from the sale of oil. In 2005, Angola’s real gross domestic product (GDP) growth rate was 14.4 percent, and the forecast GDP growth rate for 2006 is 14.6 percent, according to the US Energy Information Administration (EIA). Although economic growth is strong, Angola remains one of the poorest countries on the African continent.

Proven oil reserves in Angola have tripled in the last seven years. The majority of Angolan oil is medium to light crude (30° – 40° API) with a low sulfur content (0.12% - 0.14%)—valued for the production of gasoline.

Angolan oil production and consumption. Click to enlarge. Source; EIA.

Angola’s crude oil production has more than quadrupled over the past two decades. In 1986, crude oil production averaged 280,000 barrels per day (bpd), while production in 2005 averaged 1.25 million bpd, according to the EIA. The entry into operation of new deep-water production sites in 2008 will boost production to 2 million bpd, according to estimates.

China has become quite involved in the Angolan oil sector. Earlier in 2006, the two countries signed 9 cooperation agreements. The agreements primarily include development of Angola’s oil and gas resources, but also cover general infrastructure development and financial aid. Angola is already China’s second largest trading partner in Africa.

In May, Angola’s state-owned oil company Sonangol and China’s Sinopec launched a US$2.2 billion joint bid for deep-water blocks; these new blocks have estimated reserves of 3 billion barrels and 1.5 billion barrels respectively.

Angola presently is China’s largest African supplier of crude oil, and third-largest supplier globally (behind Saudi Arabia and Iran). The new blocks are likely to move Angola from the position of third-largest oil supplier to China to that of number two on a long-term basis.




Unless there is a substantial improvement reservoir recovery percentage, and significant reserve discovery, Angola will peak in 10 years. They may have ~2 decades - a generation - to develop their nation, before production drops below domestic consumption, and exports cease.

Max Reid

So OPEC is expanding.

Meanwhile Shells oil reserves are cut by another 4 % as they handed over some of their reserves to Russian company.

Also Belarus agreed to pay more to Gazprom for gas.

Oil consumption increased by
3.5 % in 2004
1.5 % in 2005
1.1 % in 2006

When more Ethanol plants and coal fired power plants come online, Oil consumption could go down further and in 2007, it may not exceed 0.5 %. Meanwhile Coal is marching at more than 5 % / year.

Max Reid

In order to reduce Oil consumption, South Koreans investing in Coal and nuclear power plants.

Soon Japan may follow this route.
Hope this will send a message to OPEC.

And all this means that Kyoto Protocol may be suspended.

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