Diamantino Azevedo, Angola’s Minister of Mineral Resources, has clarified the country’s choice to withdraw from the Organisation of the Petroleum Exporting Countries (OPEC).
Azevedo said that the country is currently promoting investments that will maintain production above 1 million barrels per day MMbpd, and that OPEC’s quota limitation further hinders the country’s plans to stabilise crude production above 1 MMbpd.
Angola’s December exit from OPEC came after the group imposed a much lower production limit.
The tighter cap was too much for Angola, which is making efforts to boost investment after many years of underinvestment and production decline.
“This organisation no longer aligns with Angola’s values and interests,” Mineral Resources Minister Diamantino Azevedo said in a speech in Luanda on Wednesday. After the imposition against the country’s wishes of “production quotas challenging our actual capabilities and needs, we made the formal decision to withdraw our country,” he said.
Angola’s GDP briefly dipped below 1 MMbpd last year, down from more than 1.8 MMbpd a decade earlier, according to data compiled by Bloomberg. Its national petroleum agency has launched investor roadshows and offered a series of licencing rounds to auction off blocks.
The oil ministry is committed to promoting investments that will maintain production above 1 MMbpd, Azevedo said.
“If Angola’s investment plans materialise and financing is assured, the country’s departure from OPEC will leave it in better stead. The government desperately needs higher oil revenues to resolve fiscal pressures and buffer its depreciating local currency,” he stated.
Cracks in Angola’s 16-year membership in OPEC first started to show in June, when officials from the country abruptly exited a meeting of the group in Vienna after African members were put under pressure to reduce their quotas.
After the country’s production limit was slashed to 1.11 MMbpd at the group’s November gathering, it vowed to ignore the restriction.
Besseling stated that Angola’s present government aligns more closely with the US and Western oil companies. Therefore, breaking away from OPEC+, where Russia and Saudi Arabia hold dominance, aligns with its strategic vision.
