African Oil Producers Seek to Cut Production

African Oil Producers Seek to Cut Production

The African Petroleum Producers Association, which represents oil and gas producers from Algeria to South Africa, called for a cut in oil output globally.

The group also includes the continent’s biggest producers, Nigeria and Angola. It’s starting an initiative, led by Angola and Algeria, to seek collaboration between members of OPEC and other oil producers to reduce output and stabilize oil prices, which have halved since the end of June.

APPA wants “to set up a platform of commitment at the international level from the producing countries,” said Ousmane Doukoure, director of exploration and production at Ivory Coast’s oil ministry, as he read out a statement on Friday at the end of an APPA meeting in Abidjan, Ivory Coast’s commercial capital.

African countries from Angola to Nigeria to Equatorial Guinea have had to cut their budgets in recent months after the plunge in oil prices affected the amount of income they will get from their biggest exports. Countries, including the continent’s biggest economy Nigeria, have slashed growth forecasts.

“We are very concerned by the drop of the price,” said Gabriel Lima Obiang, oil minister for Equatorial Guinea, after the meeting. “We are revising already our budget because of the price and we have been welcoming an initiative by Angola and Algeria to study a way we can work together to stabilize the price in the future.”

’Drastic Reduction’
Of the African producers only Algeria, Libya, Nigeria and Angola are members of OPEC. While some members of OPEC have called for an output cut the biggest producer in the organization, Saudi Arabia, is opposing any reduction in output.

“The current prices are unfair and are having an impact on the economies of African countries,” Mashallah Zwai, oil minister for the Tripoli-based Islamist government in Libya, said through an interpreter. “We will ensure our voice is heard about this crisis so as to emerge from it as soon as possible.”

Zwai said Africa accounts for about 8 percent of global oil production.

Libya is split with a separate government, based in the eastern town of Tobruk, recognized by the United Nations.
“It has been a drastic reduction” in the oil price, Obiang said.

“What we need to do is think of new initiatives, for example the diversification of our economies, so as we don’t depend on oil.”
Nigeria, Africa’s biggest oil producer, relies on the commodity for over 90 percent of its export income.

Brent crude oil traded at $54.95 a barrel on Thursday. Its lowest level since June was $46.59 on Jan. 13.

Source: Bloomberg


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