Angola says current oil price can sustain output, exploration

Oil minister says current 'balanced price' of oil allows companies to sustain production and invest in exploration

The oil price now hovering around $111 per barrel is "a balanced price" that allows companies to sustain crude oil production levels and invest in exploration, Angola's oil minister said.
"The price is at around $110, $111 (per barrel), and that permits a continued production process but also allows firms to invest in research and exploration," Jose Botelho de Vasconcelos said on Monday after a swearing-in ceremony for a new cabinet following an election last month.
"It is a balanced price," he told Reuters.
The August 31 election in Angola, a member of the Organization of the Petroleum Exporting Countries (OPEC), was comfortably won by the MPLA party of President Jose Eduardo dos Santos, giving him a new five-year term.
Angola, which is Africa's second-largest crude producer after Nigeria, had disappointing output in 2011 due to technical problems and maintenance issues at some oilfields.
With fields coming back on line and new projects gathering pace, the government expects production to rise to 1.8 million barrels per day (bpd) in 2012 from last year's 1.64 million.
Angola expects to boost output to 2 million bpd in 2014 and in December signed deals with major firms to explore in ultra-deepwater offshore blocks which analysts say could match huge discoveries off Brazil in similar formations in recent years.
De Vasconcelos retained his post in the government, as did the economy and finance ministers.
He said the government was set to continue its "cautious approach" in its estimates for crude prices in the 2013 budget. It has estimated an average price of $77 per barrel for this year.
Brent crude prices closed out the third quarter at $112.39 after a rise of nearly 15 percent over the three months, due to supply risks in the Middle East and efforts among global central banks to stimulate flagging economies. At around 1615 GMT on Monday Brent was at $111.84 a barrel.
While investing in its main revenue stream remains a priority - oil revenues represent more than 95 percent of Angola's export income and 45 percent of GDP - the government also plans to diversify the economy, Dos Santos said last week.
New Minister for Geology and Mining Manuel Francisco Queiros said the country should also tap its other mineral resources.
"There have not been much tax revenues obtained from the mining sector, so we have to increase them," he told reporters.
Angola is the world's fifth-largest producer of diamonds.
But the sector is still recovering from a downturn in the global market and non-oil minerals will account for under 1 percent of Angola's GDP this year.
Analysts say Angola has extensive mineral resources, including copper, gold and manganese, but exploration was held back by a 27-year civil war that ended a decade ago.
"We need to know the potential resources we have and discover where they are located," Queiros said, adding that mapping of them is under way and will be hastened to deliver results next year.