Oil at US$60 per barrel essential for Angola’s economy

31 August 2017

An increase in the price of oil to US$60 per barrel is essential for the Angolan economy, Petroleum Minister Botelho de Vasconcelos told the Bloomberg financial agency on Monday in Luanda.

Recent market indications indicate that oil prices may reach US$60 per barrel by the end of the year, the minister said, reiterating that such an increase would be “extremely important” for Angola, where oil accounts for 97 percent of exports.

Angola’s reference barrel of Brent was quoted at US$51.46 on Wednesday in London, well below the US$82 that Angola needs to balance its budget, according to estimates by the Fitch Ratings agency.

Botelho de Vasconcelos also told Bloomberg that it was too early to state whether the Organisation of Petroleum Exporting Countries (OPEC) would maintain the production cuts after March 2018. That issue should be considered at the meeting this coming 30 November.

He explained that foreign oil companies continue to invest in Angola and announced that the auctions of new oil prospecting blocs on land suspended early in the year will resume after the new government resulting from the recent general elections is formed in September.

A group of about 10 maritime blocs in the Namibe Basin in the south of the country may be auctioned in 2018 given that production is declining in other blocs, the oil minister said.

Botelho de Vasconcelos also stated that his ministry has been working with oil companies to lower operating costs to an average of US$10-12 per barrel, compared to US$15-20 three years ago. (Macauhub)