Oil production target in Angola difficult to achieve in 2016

21 September 2015

Angola is unlikely to produce 2 million barrels of oil per day in 2016, said the office of economic and financial studies of the Portuguese bank BPI, adding that this is “an overly optimistic goal.”

“The Angolan authorities remain hopeful in achieving an increase in average daily production to 2 million barrels per day by 2016, but this scenario could prove overly optimistic,” according to the September analysis of the Angolan economy.

In the chapter on oil, the main source of tax revenues in Angola and that accounts for over 95 percent of exports, the BPI analysts said, “Angola managed to slightly increase average daily production, which should help partly offset the fall in revenues,” but noted that prices will remain low, undermining the country’s public finances.

“Oil production in the first quarter of 2015 rose to 1.76 million barrels per day and in the following quarter to 1.77 million,” according to oil ministry figures cited in the report.

These figures are positive, said the BPI analysts cited by Portuguese news agency Lusa, given that “in recent years, Angola had had some difficulty in recovering production levels because of technical problems and production falling at older wells.”

The problem, they said, was that “excess supply worldwide continues to threaten prospects for a recovery in oil prices,” because “the latest forecasts are that the adjustment process between demand and supply in the market is slower than originally expected, with fears that the price will remain at lower levels than expected by the end of the year.” (macauhub/AO)