Sun, Apr 05, 2015 - Page 13 News List

African oil producers seek production cut

PLUNGING PRICES:African nations have cut budgets and slashed growth forecasts because of the global decline in crude oil prices, which an official described as ‘unfair’

Bloomberg

The African Petroleum Producers Association (APPA), 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 is starting an initiative, led by Angola and Algeria, to seek collaboration between OPEC members and other oil producers to reduce output and stabilize oil prices, which have halved since the end of June last year.

The association wants “to set up a platform of commitment at the international level from the producing countries,” Ivory Coast’s Ministry of Mines, Petroleum Resources and Energy exploration and production director Ousmane Doukoure said in a statement on Friday at the end of an APPA meeting in Abidjan, Ivory Coast’s economic capital.

African nations from Angola to Nigeria to Equatorial Guinea have had to cut their budgets and slash growth forecasts in recent months after the plunge in oil prices affected the amount of income they receive from their exports.

“We are very concerned by the drop of the price,” Equatorial Guinean Mines, Industry and Energy Minister Gabriel Lima said 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.”

Of the African producers only Algeria, Libya, Nigeria and Angola are members of OPEC. While some OPEC members 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,” Libya Dawn Oil Minister Mashallah Zwai said. “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 UN.

“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.”

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