Angola Minister Says Oil Will Stay Higher Than $100 in 2013
The price of crude oil will remain at more than $100 a barrel for the rest of 2013, Angolan Petroleum Minister Jose Maria Botelho de Vasconcelos said.
“For this year, yes, everything indicates that the price will be maintained, although there are many variables in the market,” Vasconcelos said yesterday in an interview in Luanda, the capital. “The most important thing is that the price is over $100 a barrel.”
Brent crude has averaged $113.26 a barrel this year, compared with $111.66 in 2012. The May contract traded at $110.18 a barrel as of 3:35 p.m. in London. The average of Brent, Dubai and West Texas Intermediate grades will be $99.17 this year and $96.78 in 2014, according to the International Monetary Fund. Angola’s oil output of about 1.8 million barrels a day is Africa’s largest after Nigeria.
The southwest African country is a member of the Organization of Petroleum Exporting Countries, which meets May 31 in Vienna to determine the group’s production quota and select a new secretary-general. Any discussion of quotas for individual countries would depend on the situation, Vasconcelos said. OPEC’s output has at times exceeded its own limit of 30 million barrel a day by about 1 million and there hasn’t been an effect on the price, he said.
Angola LNG, a $10 billion liquefied natural gas plant that was supposed to start more than a year ago, has been delayed by engineering adjustments after unexpected test results in October, Vasconcelos said. Baptista Sumbe, board member of Sonangol EP, the state energy company, said Feb. 25 construction would be completed in four to six weeks, followed by a decision on when the first fuel would be shipped.
The LNG carrier Soyo signaled March 11 that its next destination is “off Angola,” an 18-day trip from its location in Malaysia, according to IHS Fairplay ship-tracking data compiled by Bloomberg. Vasconcelos said he wasn’t aware of the tanker’s movements.
The facility, with a capacity of 5.2 million metric tons a year, is located at the mouth of the Congo River on the country’s north border. Sonangol has a 22.8 percent stake in the Angola LNG plant. Chevron Corp. (CVX:US) owns 36.4 percent, while Total SA (FP), BP Plc (BP/) and Eni SpA each hold 13.6 percent, according to the project’s website.
Candidates for the position of OPEC secretary-general are being analyzed by a committee and Vasconcelos said he didn’t have a favorite for the decision, which is achieved by consensus. The cartel was unsuccessful at the last meeting on Dec. 12 in Vienna to select a replacement for Libya’s Abdalla El-Badri, whose second three-year term was supposed to have ended Dec. 31. He was given a one-year extension.
Angola will ensure negotiations protect the environment, cultural heritage and landowners on 15 blocks to be part of the country’s first round of onshore concession bidding this year, the minister said.
Five blocks in the Congo basin and 10 in the Kwanza basin are to be awarded, Sonangol said Feb. 25. The company has divided the Kwanza basin around Luanda into 23 blocks of 1,000 square kilometers (386 square miles) each. The 9,960 square- kilometer Kissama National Park lies within the concession.
“These commitments that have been made will result in negotiations preventing the undermining of some areas, such as the national park,” Vasconcelos said. “It’s not just about the environment, but also cultural heritage, and we have to take into account the owner of the land.”
Belgium’s Petrofina and France’s Cia Francais Petroleo, predecessors to Total, tapped the Tobia and Galinda fields near Cabo Ledo, 120 kilometers (75 miles) south of Luanda, about 40 years ago. Production was piped to the Petrofina refinery in Luanda. New prospecting is expected to use the latest technology, such as 3-D seismic mapping, to find more oil.
The government has promoted the onshore blocks as a means for Angolan companies to enter the oil sector because it costs less than offshore drilling. Almost all of the southwest African country’s output is from Atlantic Ocean fields operated by companies such as Total, Chevron, Exxon Mobil Corp. and BP.
The government will cut fuel subsidies this year, the minister said, while he declined to say by how much because it is a sensitive issue. Subsidies will remain in place for diesel fuel used in public transportation and agriculture, and butane gas and lighter fuel used in home cooking, he said.
Fuel subsidies amounted to 6.3 percent of economic output in 2011, according to the IMF. Gasoline sells for 60 cents a liter across the country, diesel for 40 cents.
The government is in “very preliminary” discussions with potential partners to build a 200,000 barrel-a-day refinery within the next five years, Vasconcelos said. He declined to identify the interested companies for the project in the northern town of Soyo, where international companies have bases for offshore operations and the nearby LNG terminal.
Construction at the 200,000 barrel-a-day refinery in the southern port of Lobito is proceeding while the government remains open to partnership offers, the minister said. Sonangol is building the $8 billion facility amid concern about the cost and having to pump crude up a seaside cliff to the site.
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