January 3, 2007

Angola becomes twelfth full OPEC member

Abuja, Nigeria – Following a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in December, the Republic of Angola has been unanimously admitted as the twelfth full member of the organization, effective January 1, 2007. Angola is sub-Saharan Africa’s second-largest oil producer, behind Nigeria.

At the conference, the organization also decided to reduce OPEC production by 500,000 barrels per day (bpd), effective February 1, 2007, “in order to balance supply and demand.” While world oil demand is estimated to increase by 1.3 million bpd in 2007, OPEC believes it is more likely to be offset by a projected increase of 1.8 million bpd by non-OPEC suppliers.

Approximately 90 per cent of government revenues in Angola come from the sale of oil, although it remains one of the poorest countries in Africa. The majority of Angolan oil is medium to light crude with low sulphur content, making it valuable for the production of gasoline.

Angola’s crude oil production has more than quadrupled over the past two decades, with crude oil production averaging 1.25 million bpd in 2005; it is estimated that production will increase to 2 million bpd in 2008 when operation of new deep-water production sites begins. Angola’s oil sector is closely tied to China; the country is China’s second-largest trading partner in Africa, and China’s largest African supplier of crude oil. In 2006, the two countries signed nine cooperation agreements, primarily regarding development of Angola’s oil and gas resources, but also including general infrastructure development and financial aid.

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