Angola states reason for leaving OPEC oil basket after 16 years of membership

Angola said on Thursday it would leave OPEC in a blow to the Saudi-led oil producer group that has sought in recent months to rally support for further output cuts to prop up oil prices.

Angola’s oil minister Diamantino Azevedo said the Organization of the Petroleum Exporting Countries no longer served the country’s interests. It joins other mid-sized producers Ecuador and Qatar, which have left OPEC in the last decade.

“We feel that … Angola currently gains nothing by remaining in the organisation and, in defense of its interests, decided to leave,” Azevedo was quoted as saying in a presidency statement.

Oil prices fell by nearly 2% as analysts said the departure raised questions about OPEC’s unity.

“Prices fell on concern of the unity of OPEC+ as a group, but there is no indication that more heavyweights within the alliance intend to follow the path of Angola,” UBS analyst Giovanni Staunovo said

Angola, which joined OPEC in 2007, produces about 1.1 million barrels of oil per day, compared with 28 million bpd for the whole group.

OPEC did not immediately reply to a request for comment.

Three delegates from the group who spoke on condition of anonymity said Angola’s decision to leave came a surprise.

The country has been unable to produce enough oil to meet its OPEC quota since 2019.

It has struggled to reverse falling output since hitting a peak of 2 million bpd in 2008 and expects to maintain current production into 2024, a senior government official said in October.

Last month, Azevedo’s office protested against a decision by OPEC to cut its production quota for 2024, which could have curtailed any ability it might have to increase output.

Disagreements over African output quotas had earlier been in part the cause of a delay to a meeting of the wider OPEC+ oil producer group.

Oil and gas exports are Angola’s economic lifeblood, accounting for around 90% of total exports, an over-reliance the government has been seeking to reduce after it was hit hard by the COVID-19 pandemic and lower global fuel prices.

Several oil majors and independents operate in the southern African nation, including TotalEnergies (TTEF.PA), Chevron (CVX.N), ExxonMobil (XOM.N) and Azule Energy, a 50/50 venture between Eni and BP (BP.L).

Reuters