Angola: China lockdowns likely to hinder rise in oil output – Oxford Analytica.

Lockdowns in China imposed due to the spread of the novel coronavirus that causes Covid-19 could hinder an increase in oil production in Angola, which is one of the main suppliers of crude to the Asian giant, analysts at UK-based consultancy Oxford Economics Africa have warned. 

In a note to clients, the analysts write that they expect oil production in Angola to rise from 1.13 million barrels per day last year to 1.18 million this, but that there are considerable risks to this, due to the possibility of more technical problems and delays in implementing new projects, in addition to restrictions now being imposed due to the spread of the coronavirus in China, a country that takes over 70% of Angola’s exports. 

According to the note, restrictions in China due to the spread of the Omicron variant of the virus – which have been extended to over half of the country’s large cities – is reducing purchases from Angola. Oil production in the African country in March fell for a second consecutive month, to 1.14 million barrels per day, from 1.16 million in February. 

The March figure was 300,000 barrels below the government’s target – itself 240,000 barrels less than allowed for under an agreement reached in December among members of the Organisation of Petroleum Exporting Countries (Opec). 

However, output in the first quarter of this year was still slightly up on a year earlier, and revenues were up 85% in the period, largely due to the rise in crude prices, the analysts note. That, they add, is strengthening the kwanza and bolstering Angola’s fundamentals as a sovereign issuer, as evidenced by the recent issue of public debt – the second in Africa since Russia first invaded Ukraine – which received twice as many bids for the debt on offer, of $1.75 billion, although this was just over half of the $3 billion initially planned.

Source: macaubusiness