ANGOLA - Angola Is Part Of OPEC - A Survey.

Angola on Jan. 1, 2007, became a full-right member-state of the Organisation of Petroleum Exporting Countries (OPEC). It became the 12th member, joining Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates (UAE) and Venezuela. Angola's joining OPEC is seen in Luanda is being of great political sense, for the advantages it can get in terms of technological studies and role in the international market, added to a more active participation in the organisation's various organs.

Angola has been regularly attending OPEC meetings as an observer. The commercial benefits of it becoming a member of the organisation is far from clear as the country's crude oil production is rising rapidly with a series of large deep-water oilfields being developed on fast-track basis by international oil companies (IOCs).

Ecuador's Energy Minister Alberto Acosta on Feb. 21 said his country would decide in the second quarter whether to rejoin OPEC. During a news conference, Acosta called Ecuador's exit from OPEC a "historical mistake". Ecuador left OPEC in 1992 after nearly two decades of membership. He said: "To be an OPEC member is important to Ecuador so it can be in a better political situation and take advantage of all the potentials given by the group", adding he had been in touch with Venezuelan authorities to inquire about a re-entry. Venezuela, a founding state, is South America's sole OPEC member.

In addition to counting on political backing from OPEC members, Ecuador is aiming for technical support, the ability to form joint ventures, and access to loans, among other benefits of membership. The main roadblock in rejoining is a debt of nearly 4m Ecuador has with OPEC. Acosta said: "The economy minister has to place the means. The [OPEC] quota system would not hamper us". Ecuador produces about 535,000 b/d of crude oil.

Angola has become Africa's second largest oil producer next to Nigeria. Along with Nigeria, Angola is one of the new strategic priorities of China, whose state-owned oil firms are aggressively competing with their Western counterparts for petroleum assets in Africa where, despite instability and corrupt governments, access to resources for foreign companies compares favourably to the one being offered in the Middle East (see news9-AfricaFeb26-07).

Angola now produces 1.5m b/d of crude oil, including 100,000 b/d from the new Dalia field in the deep waters of the Total-operated Block 17. This field came on stream in mid-December 2006, nine years after its discovery, and should peak at 240,000 b/d in 2007.

With the implementation of other field projects this year, Angola's crude oil production might reach 2m b/d in late 2007 or early 2008, thus giving Luanda a prominent place among the world's oil producing states.

The US Energy Department's EIA in January 2007 said it concurred with a recent World Bank estimate that Angola's crude oil output will peak in 2011 at 2.6m b/d, followed by declines, barring any new oil discoveries.

Discovered in September 1997 and located about 135 km off the coast and in 1,200 to 1,500 metres of water, Dalia field contains around 1 billion barrels of recoverable reserves. It constitutes the biggest deep-water development brought on stream in late 2006 and is among the biggest projects of its kind in the world.

Investments in Angola's oil exploration areas in 2006 reached about $10 billion, representing a rise of 37% as compared with 2005. During 2006, public tenders for the licencing of Blocks 1/06, 5/06, 6/06, 26/06 and remaining areas of Blocks 15, 17 and 18, were put up, including unitisation of the respective business groups.

The cabinet has granted authorisation to the Petroleum Ministry for the splitting into Blocks 46-50 the areas of concession to the west of ultra-deep water Blocks 31-33 of the Low Congo Basin. A part of ultra-deep water Block 32 operated by Total has an oilfield being developed by the French major to produce 130,000 b/d by 2010.

Petroleum Minister Desiderio da Graca Verissimo da Costa, speaking at a New Year greetings ceremony with representatives of oil companies and services firms operating in Angola, said crude oil production in the country in late 2007 will reach 2m b/d. He explained that Angola, through its national concessionaire Sonangol, exported until the end of the third quarter of 2006 about 129m barrels of crude oil, at the average price of $63/barrel.

Thus, explained the minister, the entry of Angola into OPEC, responded to the increasing performance of the country in the world's oil market. He mentioned other investments soon to be implemented such as the 5 million tons/year LNG venture and construction of a 200,000 b/d refinery in Lobito city, in south-western Benguela Province. He reaffirmed that the Petroleum Ministry continued to make sure that, in its various activities, the government made sure there was respect for the protection of the environment, in line with the law and in accordance with the international procedures in the oilfield.

The minister said in Cabinda South Block's exploration, aero-gravimetre acquisition was attained over a 1,100 sq km area, in addition to 2D, 3D and 4D seismic tests in Blocks Cabinda South and 15, totalling 217 sq km, 254 sq km and 396 sq km, respectively. Some 19 wells were drilled in 2006, nine of which were for exploration and ten for evaluation, with eight of them proving to contain oil, which means a high level of exploration success. Unofficial data put the country's recoverable oil reserves at about 13 bn barrels. Angola has such blends of export crude oil as Cabinda, Nemba, Palanca, Girassol, Kuoto, Canuco, Hungo, Kuissanji and Xikomba.

Excluding the Dalia field, Angola's crude oil production in 2006 had risen by 12.9% to 1.412m b/d. The Energy Information Administration (EIA), the statistical and analytical arm of the US Department of Energy, in early 2007 said it expected Angola's output to reach 2m b/d by 2008. It said it concurred with a recent World Bank estimate that Angola's crude oil output will peak in 2011 at 2.6m b/d, followed by declines, barring any new oil discoveries.

Angola's oil consumption in 2006 rose to 62,000 b/d, from 58,000 b/d in 2005, allowing for exports of 1.35m b/d. Angola has consistently been the top crude oil source for China, the world's second-biggest oil consumer behind the US, with November 2006 imports averaging 477,000 b/d. Preliminary US data for November showed Angola was the seventh-biggest source of crude oil imports to the US in the first 11 months of 2006, at an average of 504,000 b/d, a 10% gain from a year ago.

Angola is not party to OPEC's current output restraint agreements. OPEC has pledged to cut its oil output by 1.7m b/d - 1.2m b/d from Nov. 1, 2006, and 500,000 b/d from Feb. 1 - in a move designed to soak up excess global inventories and support crude oil prices. The second phase of the cuts did not involve Angola. It is not yet clear how Angola would be affected by future OPEC production agreements. OPEC's next ministerial conference is due on March 15.