London, United Kingdom, 21 Nov- Economic growth in Angola will see a “significant push” in 2012, to close to two digits, due to the start of natural gas production, according to the Economist Intelligence Unit (EIU).
The production of natural gas, after an investment of US$9 billion led by Chevron an Sonangol, is due to begin in December, “several months ahead of schedule,” and the recent drop in fuel prices on the main export market, the United States, is leading the oil companies to also focus on Asia.
“In more recent months, Sonangol has been forced to consider other options, including Asian markets. Japan, in particular, has shown a lot of interest in buying Angolan natural gas,” said the latest EIU report on Angola.
It was initially expected that natural gas production would contribute US$1 billion to Angola’s export revenues, helping the government to reduce its dependence on oil, but market conditions are now, “more uncertain.”
“The launch of the project may not reach these estimates, although it is expected to provide significant drive to GDP growth in 2012,” the EIU said.
The economists from the British unit pointed to growth of 9.9 percent in 2012, 3.8 percentage points more than is expected for this year, after which it is expected to slow to 7.1 percent in 2013 and 5.6 percent in 2014.
The Angola LNG project is expected to guarantee Angola’s membership of the Gas exporting Countries Forum (GECF), which currently has only five African members.
“Although Angola is planning several other small LNG projects it is unlikely to become a significant global LNG exporter, given its relatively small reserves,” the EIU said.
“Despite this, Angola’s incursion into the GECF would boost the country’s efforts to develop its presence on the regional and international stages.”
The project, which also involves BP, Total and ENI, is located in Soyo province and includes a 500-kilometre gas pipeline, which links six offshore blocks (1, 2, 14, 15, 17 and 18) to the liquefaction facilities from where the gas is exported.
The annual production target is 5.2 million tons of natural gas, which up to now had been burned off at the oil wells.
Angola is also preparing to auction several onshore oil blocks in the Kwanza region, where exploration has seen little progress over the last 30 years, according to the EIU.
This was the first region of the country where oil was found, in 1955, but exploration work was given up in the 1970s.
“The government hopes that, be re-launching exploration activities in the region, it will get closer to its national production target of 2 million barrels of oil per day,” noted the EIU.
The area is split into 23 blocks of 1,024 square kilometres each, of which just one has been concessioned out – block “A” granted to Total (49 percent) and Sonangol (51 percent).
According to the EIU economists, the auction is expected to “attract strong interest,” given the positive response from investors to the offshore round of licensing in January and its proximity to the Luanda area. (macauhub)