OPEC GOES AFRICAN

Two days after this announcement, a major new field was announced off the Angolan coast. Coincidence?

Enlarged Membership to Boost OPEC’s Clout on Oil Market
Tai Beiping, January 2, 2007 (Xinhua News Agency via Rigzone)
- The Organization of Petroleum Exporting Countries (OPEC) started enlargement for the first time in over 30 years by admitting Angola at the beginning of 2007, and was poised to tighten the cartel's grip on the world oil market.

- With an estimated daily output of some 1.4 million barrels, Angola is Sub-Saharan Africa's second biggest oil producer just after Nigeria.
- Possible new members also include Sudan and Ecuador…the three countries could boost OPEC's output by 2 million barrels per day (bpd), or 6 percent, and bring 10.5 billion barrels of proven reserves to the organization which already boasts 75 percent of the world's total.

- Analysts said the enlargement would further increase OPEC's influence on the world oil market…at a time when challenges are perceived from such producers as Russia, Mexico and others.
- Russia has become the world's second largest oil producer…Mexico and some non-OPEC African oil-producing countries are also rising to squeeze market share…
- The International Energy Agency said that absorbing Angola, Sudan and Ecuador could impede investment by foreign oil companies in the three countries and slow the growth of spare production…

- OPEC members -- Algeria, Indonesia, Iran, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, Venezuela, Iraq and the newcomer Angola, regulate their oil exports and are assigned production limits under the quota system at the heart of the organisation…
- The organization cut output in November, 2006, from 27.5 million bpd to 26.3 million in a bid to control oil prices, but the effects were unapparent and some members kept producing above their quotas…Whatever changes the enlargement would bring, analysts said that OPEC members would defend the price level of 60 dollars a barrel.