OPEC Sec Gen Says Economic Uncertainty Clouds Oil Outlook
LUANDA, Angola Aug 27, 2007 (Dow Jones)
While global oil markets are currently well supplied, volatility in U.S. financial markets is clouding the outlook for world oil demand and economic growth next year, OPEC Secretary General Abdalla Salem el-Badri said Monday.
El-Badri said he expects world economic growth in 2008 to be similar to the 5% growth projection set for 2007.
"The picture will be clear by December," el-Badri said, speaking at a press conference.
The recent shake-up in the U.S. sub-prime mortgage and credit markets has led to financial market volatility that "clouds OPEC forecasts for the rest of the year," el-Badri said.
The 12 members of the Organization of Petroleum Exporting Countries are scheduled to meet Sept. 11 in Vienna, with meetings also scheduled Nov. 17 in Riyadh, Saudi Arabia, and Dec. 5 in Abu Dhabi in the United Arab Emirates, according to OPEC.
The secretary general is on a four-day trip to Angola to present details of the cartel's production quota system and to lay out the case for Angola to have an output target. Angola, one of Africa's fastest-growing oil producers, became OPEC's 12th member last December.
Angola will not have a quota for oil production this year, although the nation will have "some allocation in 2008," el-Badri said. He declined to provide details or figures for the output allocation.
The secretary general said he had had "fruitful discussions" with top Angolan government authorities.
"We exchanged a lot of information" about OPEC and Angola, he said. "We have a common understanding and when the time comes, we will not have any different point of views about Angola's production allocation."
OPEC pumps about 40% of the 86 million barrels a day the world consumes each day.
Angola is sub-Sahara Africa's second-largest oil producer after Nigeria, with oil production of around 1.6 million barrels a day and with ambitions to lift its oil output by one-fifth by next year, to 2 million barrels a day.
While the government is quickly boosting output at expensive offshore projects, Angola has no OPEC output quota, and Angolan officials have previously aired doubts about the timing of having an output quota.
An output quota could crimp operations for oil giants like Chevron Corp. (CVX), Total S.A. (TOT), BP PLC (BP) and Exxon Mobil Corp. (XOM), which are investing billions in titanic structures off the coast of Angola. A recent string of discoveries promises even more opportunities for development in the country.
OPEC member Libya - which currently pumps about the same amount of crude oil as Angola - was allocated production cuts of 102,000 barrels per day after OPEC cut output twice in recent months. Libya's current quota stands at 1.62 million barrels a day.
Africa's economically recoverable oil and natural-gas reserves account for almost 10% of the world's total. U.S. and European consumers are increasingly reliant on West African nations such as Angola and Nigeria for crude oil that is easily refined into products like gasoline because of its low-sulfur quality.
African producers such as Nigeria and Angola now ship about as much crude oil to the U.S. as Persian Gulf producers such as Saudi Arabia, according to the U.S. Energy Information Administration.
Copyright (c) 2007 Dow Jones & Company, Inc.
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