OPEC Assigns Quotas to Angola and Ecuador
ABU DHABI Dec 05, 2007 (Dow Jones Newswires)
OPEC assigned a production quota of 1.9 million barrels of oil a day to Angola and 520,000 barrels a day to newcomer Ecuador Wednesday, potentially crimping the countries' future oil production plans.
Angola, which currently produces about 1.8 million barrels a day, has said it plans to lift production to 2 million barrels a day by 2008; Ecuador, which currently produces about 500,000 barrels a day, aims to increase that to 530,000 barrels a day by 2009.
Angolan Oil Minister Desiderio da Graca Verissimo e Costa refused to answer reporters' questions about the new allocation.
The quota could potentially impact major western oil companies with interests in sub-Saharan Africa's second-largest oil producer after Nigeria.
French energy company Total SA (TOT) and U.S. oil company Marathon Oil Corp. (MRO) have recently made new deep-water oil discoveries in offshore block 32 in which they each own a 30% stake. British oil giant BP PLC (BP) started production from Angola's Greater Plutonio oil project in October, which can produce up to 240,000 barrels of oil per day. Angola is also currently in the middle of a new licensing round for 10 new onshore and offshore blocks.
Angola will export 1.85 million barrels a day of crude in January 2008, compared with 1.95 million barrels a day for December 2007, according to a provisional loading program seen by Dow Jones Newswires in November.
Some oil companies have expressed concern about an OPEC quota potentially putting the brakes on Angola's rising oil prospects.
OPEC has avoided outdated output quotas and based recent output policy on outside assessments of the group's output. Thorny talks on production quotas often have brought forth claims of high capacity from member countries looking for a bigger slice of the OPEC pie. An Angolan oil official recently said his country would be happy with a quota of 2.5 million barrels a day, a figure which industry analysts say would be about 500,000 barrels a day above real output capacity.
Ecuador meanwhile, which re-joined the oil cartel just last month, had indicated that as a small producer, it shouldn't be subject to a quota at all, analysts said.
The Andean nation lifted its output by around 66% since leaving OPEC, but its oil flow is declining now, in part, as Ecuador has been reducing incentives for international oil companies.
In a variation of the resource nationalism imposed on foreign companies in Venezuela, the other South American OPEC member, Petroecuador has squeezed international oil companies operating in the country and crimped output.
Since Petroecuador took over Occidental Petroleum operations in the country in May 2006, output has dropped by 15,000 to 20,000 barrels a day from those operations.
Guillermo Granja, Ecuador's oil vice minister who represented the South American country at the meeting of the Organization of Petroleum Exporting Countries, said in an interview that it was "an appropriate quota" but declined to comment on whether it would affect future plans to raise output.
Ecuador Oil Minister Galo Chiriboga has said Ecuador aimed to develop some 900 million barrels of oil reserves at the Ishpingo-Tambococha-Tiputini field to help boost output by 30,000 barrels a day by 2008 or 2009.
Copyright (c) 2007 Dow Jones & Company, Inc.
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