Angolan oil sector scenario “brilliant” EIU says

7 January 2013

Angola’s oil sector entered 2013 with a brilliant scenario in which production is close to record levels seen in 2008 due to the start of exploration of a new oil well and overcoming technical difficulties at others.

In its latest report on Angola, the Economist Intelligence Unit (EIU) said that the Plutão, Saturno, Vénus and Marte (PSVM) oil field, in an initial stage and the first shipment from which is due this month, will add 150,000 barrels of oil per day to the country’s production.

“The short-term scenario is brilliant,” said the EIU economists.

The oil field, which is operated by BP, is located in the northeast of Block 31 in the Angolan sea and has a floating production, storage and offloading (FPSO) unit with a 1.8 million barrel capacity.

Along with “reduced technical faults” at other oil fields, the PVSM field’s contribution is expected to push Angolan production to almost 1.9 million barrels of oil per day in 2013, which is the record posted in 2008, according to the EIU’s calculations.

In October Angolan oil production totalled 1.79 million barrels per day, which was higher than the 1.75 million barrels per day in the previous month and the same as the daily average for 2012.

The increase is related to the start of production at the Pazflor oil field, which has production of 220,000 barrels of oil per day, and the Kizomba D satellite fields, which provide almost 140,000 barrels per day.

This “modest” increase was made possible because maintenance work was concluded at some production units and “is consistent with a general improvement throughout the year,” the report said.

After reaching a “peak” of 1.92 million barrels per day in 2008, Angolan production fell steadily in the years that followed to just 1.64 million barrels per day in 2011.

Despite increased oil production prospects, the EIU kept its projection for growth of the Angolan economy in 2013 unchanged at 8.9 percent, which is an increase of 1.9 percentage points on growth seen in 2012.

The biggest driver of the Angolan economy will, it said, be growth in oil production and the start of liquid natural gas (LNG) production.

The LNG project in Soyo, which had been due to be launched in 2012, will finally start operating this year, according to assurances recently given by the chairman of BP, Bob Dudley.

Angola is currently, alongside Saudi Arabia, China’s largest oil supplier, which is also the main overall destination for its exports.

The EIU projected that Angola will deepen its relationship with China, through “large trade and investment deals, particularly in oil, construction and agriculture.”

China is also expected to extend its existing credit lines to Angola, as is Brazil. (macauhub)