Angola to boost its production to 2 mm bpd

Aug 03, 2006 02:00 AM

There is little to stop Angola from ramping up oil output now that it has subdued two lengthy insurgencies -- in contrast to Nigeria, which is struggling with a production-crippling violence, analysts say. Angola, Sub-Saharan Africa’s number two crude producer after Nigeria, is aiming to boost its production to 2 mm bpd by 2008, up from around 1.4 mm currently.
“There are no problems there, all the projects are well under way. In fact I think they will exceed that target,” said Nicholas Shaxson, an analyst with UK-based think tank Chatham House who specialises in West African oil producers.

More than a quarter of the 2.5 mm bpd oil output capacity in Nigeria, the world’s eighth crude exporter, has been shut since February following a wave of attacks by militants demanding more local control over oil revenues. In contrast, Angola and a separatist rebel faction from the oil-producing Cabinda province signed an agreement that gives special status to the restive coastal enclave.
Separatists led by the Front for the Liberation of the Enclave of Cabinda (FLEC) have fought for independence since Portugal relinquished control over Angola in 1975. Sandwiched between the two Congos, Cabinda is a major source of Angola’s offshore bounty and is now the scene of the first onshore exploration anywhere in the south-western African country in over 30 years.

Australia’s Roc Oil told it hopes to begin onshore drilling operations in Cabinda within six months.
“We’ve been there on the ground since last year and without incident. We are not complacent, but it is a normal working environment,” CEO John Doran said.

Analysts, however, said FLEC remained fractured and splinter groups could still cause problems for the Angolan government.
Nzita Tiago, a leading FLEC figure, was quoted as saying his faction rejected the agreement.
“This agreement is not supported by anyone. The people of Cabinda do not accept it,” he said.

But analysts say FLEC is not in the same league as the militants who have kidnapped foreign oil workers in Nigeria, disrupting output in the impoverished Niger Delta.
“Some of them have the capacity to cause trouble, but in Cabinda you don’t have the same sort of dynamics that you get in Nigeria. The militancy in Nigeria is bound up with oil bunkering and political party finance,” Shaxson said.

Angola previously crushed a far bigger adversary when it defeated the UNITA rebel movement, which waged a decades-long nationwide war that ended four years ago.
“Since the end of the conflict in 2002 with UNITA there has been increasing deployment up in Cabinda. So we have seen an increase in security in Cabinda itself since 2002,” said Mike Davies, senior Africa analyst at consultancy Control Risks. “The main point is that the secessionist groups in Cabinda are very factional... We don’t forecast any marked improvement on the security front resulting from the peace agreement, but the beefed-up military presence had improved it already.”

A US State Department report says Angola’s war against FLEC “increased in intensity” in October 2002 with the launch of a major offensive. And with oil prices near record highs, Angola has the resources to hammer lingering resistance with a battle-hardened army that is considered one of the most fearsome in Africa.
“The Angolans are rolling in money now and they can buy what they need for their armed forces,” said Shaxson.

Discontent with the MPLA government in the capital Luanda is not restricted to Cabinda. The MPLA stands accused by human rights groups and global donors of graft on a grand scale and of siphoning off the swelling revenues from its oil boom to a corrupt elite, leaving next to nothing for millions who live in gut-wrenching poverty.
The vast majority of Angola’s oil activity also remains offshore, far from potential disturbances.

Ireland-based Tullow Oil said it was expected to enter into a production-sharing contract with Angolan state oil firm Sonangol this month after being awarded a 50 % operating interest inBlock 1/06, a 3,800 sq km oil exploration concession in the Lower Congo Basin offshore.
US oil giant ExxonMobil, the biggest operator in Angola, seeks to boost output there by 1.3 mm oil equivalent bpd by 2010 with eight project start-ups, including a liquefied natural gas plant.

Source: Khaleej Times Online
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