Angola announces plans to quit OPEC, oil prices sink
Quantum Commodity Intelligence – Angola dramatically announced Thursday that it is leaving OPEC after it was unable to resolve a long-standing row on production quotas with the wider group.
The country's state-owned Jornal de Angola relayed the decision, quoting Mineral Resources Minister Diamantino Azevedo, bringing Angola's 16-year membership to a close amid an increasingly acrimonious row over baseline production levels and quotas.
Global crude benchmarks Brent and WTI retreated by around 2% following the decision and while it makes little impact on current supply/demand balances, it represents a major PR bow for OPEC and its perceived ability to keep members in line when it comes to output.
At the latest OPEC+ meeting, held online at the end of November, Angola was given a quota of 1.11 million bpd, in line with current output levels, but the West African nation saw this as impeding future ambitions, asking for a quota of at least 1.18 million bpd.
If Angola carries out the resignation, it potentially undermines OPEC and the wider OPEC+ coalition, with members from West Africa reportedly feeling increasingly marginalised by Gulf producers as both production and influence wane.
Walk out
This came to a head at the June meeting in Vienna, which saw Angolan delegates walk out amid a row over baseline production levels as larger producers moved to cut quotas for countries that persistently fell behind target, including Angola and Nigeria.
The November meeting had initially been scheduled for Vienna but was delayed as behind-the-scenes talks became fractious. However, Angola's minister Azevedo had already planned to boycott the in-person meeting, which was taken as a sign that hostilities within the group were still simmering.
OPEC+ ultimately managed to thrash out an agreement in November, while Angola's fate had been left to three independent consultancies following the June meeting - namely IHS, Rystad Energy, and Wood Mackenzie - to verify the country's production figures.
According to the latest figures, Angola's output slumped to a seven-month low in November, with production down almost 6% on the month at 1.08 million bpd. Monthly government data showed November production coming to 32.5 million barrels, the lowest total since April.
Despite the fall, output was almost identical to where it was this time last year, even as Angola's long-term output trend continues to point downward after hitting a 20-year low back in March, with investment needed to meet the challenges of producing from the country's depleting offshore wells.
