African oil giant Angola seeks OPEC membership

Angola, sub-Saharan Africa’s second largest oil producer, is seeking to join the Organisation of Petroleum Exporting Countries to reap the gains of being within the cartel, the government has said.

“The council of ministers has said it backs Angola joining
OPEC,” finance ministry spokesman Bastos de Almeida told AFP Thursday.

“By joining OPEC, Angola will no longer be excluded from the process of fixing quotas,” he said, adding that the country also stood to reap tremendous financial benefits by joining the cartel.

Economic analyst Mario Pavio said Angola’s bid to sign up came an “opportune time as the global demand for oil, especially from countries such as China, is rapidly increasing.”

But he warned that negotiating Angola’s quota could be tough sailing.

“Angola needs to at least maintain if not increase production to finance reconstruction programmes,” following a 27-year civil war which ended in 2002.

Pavio said that Luanda also would have to “diversify the economy to reduce the crippling dependence on oil revenues.”

The southern African country, which includes the oil-rich Cabinda enclave nestled between the two Congos, currently produces 1.4 million barrels a day and aims to raise this figure to two million by the end of next year.

A spokesman for OPEC said that it “welcomed” the prospect of Angola joining the cartel but said it had not received any official application.

Omar Farouk Ibrahim said Angola’s membership was unlikely to be raised at the next OPEC meeting in Abuja, Nigeria, on December 14.

The request for membership was more likely to be dealt with in the first quarter of next year, following legislative procedures in Angola, he added.

Angola’s vast oil wealth accounting for 80 percent of revenues has already brought in huge riches, but critics say these have not trickled down, with more than 70 percent of Angola’s people still living in dire poverty.

In 2005, Angola had the second fastest growing economy in the world, with a gross domestic product ( GDP) growth rate of 20.6 percent, according to the

International Monetary Fund.

OPEC had in February this year held informal discussions in Venezuela on admitting Angola, Ecuador and Sudan.

Saudi Oil Minister Ali al-Nuaimi had then said: “We welcome any producing and exporting country that wants to join. The more the better — because we are a great organisation.”

On Sunday, Rafael Correa — the winner of Ecuador’s presidential elections — said his country would seek to rejoin OPEC, saying: “Only united will petroleum producing countries be able to prevail” against the “world’s hegemonic powers.”

Hordes of foreign oil firms have flocked to Angola, where new reserves are being uncovered at regular intervals.

Economic growth is forecast at 15 percent this year while oil production is on track to reach two million barrels per day during 2007, narrowing the gap with Nigeria, Africa’s top oil producer, which pumps 2.6 billion barrels per day for export.

Angola’s oil revenues for 2005 rose to 10 billion dollars (7.6 billion euros), up from 5.6 billion dollars a year earlier, according to the International Monetary Fund.

Despite the oil wealth, the sprawling country ranks in the bottom 10 countries of the UN development scale.

Angola has come under criticism over the way its oil revenues are handled, with human rights groups accusing the government of President Eduardo dos Santos of corruption and economic mismanagement.

According to the US-based Human Rights Watch, more than four billion dollars (three billion euros) in oil revenues vanished from the state coffers between 1997 and 2002.