Oil production in Angola is expected to reach 2 million barrels per day by the end of 2015, according to ratings agency Moody’s in a credit rating report in which it maintained its positive outlook for the country.
“We believe that oil and gas production will very likely reach 2 million barrels per day at the end of 2015, which, to a certain extent, will offset the negative impact on state revenues of a small drop in the price of oil in the medium term,” said the report by the credit rating agency. The Angolan government has said it expects production to reach 2 million barrels per day by 2017.
The general outlook described in the seven-page report, which did not change the “Ba3” rating with a positive outlook for Angola, is optimistic and some of the indicators, such as economic growth of 6.8 percent this year, are better than official government forecasts.
The Moody’s analysts estimated that in 2014 there will be a budget surplus of between 2 and 3 percent of GDP, whilst the state budget for this year is expected to post a deficit of 4.9 percent. This is a significant difference that Moody’s said was due to an undervaluation of projected oil revenues (US$98 per barrel forecast by the government compared to US$106 as forecast by Moody’s) and a drop of 20 percent in state expenditure.
Oil in Angola is the main source of the country’s wealth and is responsible for almost all of its exports. According to Moody’s the outlook for oil is positive as it estimates that production in 2013 rose by 2 percent against the previous year “based on daily oil and gas production of an average 1.79 million barrels and an oil price of US$108 per barrel, which is relatively high.” (macauhub)