OPEC member Angola says producer cuts insufficient, more action needed

LONDON - Angola sees an oil production curb by OPEC, its allies and other top producers as insufficient to balance global markets, state news agency ANGOP quoted resources and petroleum minister Diamantino Azevedo as saying on Friday.

“It is up to everyone to understand that, despite the measures taken by OPEC, oil producers in various countries should be aware that they may be called to take more drastic measures,” Azevedo said.

“Because of the lack of storage capacity, continued production is becoming unjustified,” he added, referring to the strained ability of global oil consumers to store up unwanted oil amid economic lockdowns brought on by the coronavirus.

Amid the unprecedented reductions by major producers, Angola committed to cut almost a quarter of its output from an October 2018 baseline.

March production stood at 1.39 million barrels per day (bpd) and Angola is obliged to reduce its output to 1.18 million bpd from May.

According to a preliminary plan for June oil exports, Angola is set to ship several more crude cargoes than the month before, but traders say the schedule has yet to be finalised. Angola, Africa’s number two oil exporter after Nigeria, is working to reform its oil industry to halt a production slump that has dented the economy, including privatising stakes of state oil giant Sonangol.

The country is vulnerable the recent plunge in oil prices, which reached two-decade lows this week before rebounding slightly, due to a largely offshore industry with high production costs and years of lacklustre investment.

Azevedo said Angola risked being left behind by other countries with more accessible oil reserves and better infrastructure and that its own industry was hamstrung by “conflicts of interest, lack of investment and leadership.”

– REUTERS.