Africa’s third largest oil and gas producer Equatorial Guinea wants to join the Organization of Petroleum Exporting Countries (OPEC) in 2017. To show its commitment to being part of the bloc, the Central African country joined 10 non-cartel members to cut 558,000 barrels per day of oil production through the year.
Founded in 1960, OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry. However, OPEC has found it difficult to stabilize prices in recent times as shale oil production in the United States sent prices to as low as $27.67 in 2016. The bloc, therefore agreed to cut production in a bid to push up prices. There were comments over the weekend at the OPEC compliance meeting that cuts in OPEC/non-OPEC production were ahead of schedule, but despite this, Brent crude dropped 0.5 percent to $55.23 a barrel on Monday as U.S. drilling show signs of recovery. Although OPEC’s two biggest suppliers to the U.S. Saudi Arabia and Venezuela has dismissed a vow by President Donald Trump to end dependence on the group’s oil, OPEC is certainly not enjoying the status it used to. This won’t stop Equatorial Guinea from becoming a member of OPEC.
The country’s Ministry of Mines and Hydrocarbons announced on Monday that it has submitted its interest to join OPEC in 2017.
Gabriel Mbaga Obiang, Minister of Mines and Hydrocarbons, travelled to Vienna on January 20 to meet with OPEC officials and present the Government of Equatorial Guinea’s offer to become the 14th member of the cartel. With 32.5 million barrels per day of output projected this year, OPEC is the world’s largest organization of oil producers. The Minister’s trip to Vienna follows the Fourth Africa-Arab Summit, which hosted last November several OPEC members in Malabo, under the patronage of H.E. President Obiang Nguema Mbasogo.
“For decades, Equatorial Guinea has achieved a sterling track record as a dependable supplier of petroleum to consumers in all corners of the world. We firmly believe that Equatorial Guinea’s interests are fully aligned with those of OPEC in serving the best interests of the industry, Africa and the global economy,” the minister said.
On December 10, 2016, Equatorial Guinea agreed to join 10 other non-OPEC countries to reduce 558,000 barrels per day of total oil production in 2017. Equatorial Guinea’s share of the cut is 12,000 barrels per day. Even through a two-year sustained slump in oil prices, Equatorial Guinea has maintained liquid output levels at a competitive level.
“There is a consensus amongst producers that an oversupply of oil has been dragging down the price of the barrel,” the Minister said. “Equatorial Guinea is doing its part to ensure stability in the market and that the industry continues to invest in exploring and developing our resources.”
Equatorial Guinea is the third largest oil and gas producer in sub-Saharan Africa. Its $10.6 billion of annual oil and gas exports account for 95 percent of the country’s total exports, with shipments sold every day to China, India, Japan, Korea and many other countries. The country has remained committed to investing in the entire energy supply chain through landmark projects such as the Bioko Oil Terminal, the Fortuna Floating Liquefied Natural Gas project, the Riaba Fertilizers plant, compressed natural gas and LNG. Equatorial Guinea is currently hosting its latest oil and gas licensing round, EG Ronda, putting on offer all of open acreage not currently operated or under direct negotiation. Equatorial Guinea has made 114 oil and gas discoveries to date with a drilling success rate of 42 percent.