Angola to stay free of OPEC output constraints

By Randy Fabi - Analysis

LONDON (Reuters) - OPEC's newest member Angola is likely to stay free of the group's output constraints so long as oil prices remain strong, giving the country scope for its plans to launch several oilfields in coming months.

OPEC Secretary-General Abdullah al-Badri is scheduled to meet Angolan Oil Minister Desiderio Costa next week in Luanda to lay the groundwork for a possible output target.

"I don't think Angola will cut any barrels now or in the foreseeable future," said Leo Drollas, deputy executive director for the Centre for Global Energy Studies.

Angola, which joined the Organization of the Petroleum Exporting Countries in January, has been exempt from the group's pledge last year to lower production by 1.7 million barrels per day (bpd). Iraq is the only other member not bound to the agreement.

With oil prices now trading at $70 a barrel and OPEC facing mounting calls from consumers to increase output, Angola can remain confident that it can continue to pump at full throttle without any pressure from other members.

"(OPEC and Angola) will agree to do something if and when the oil price looks like it's cracking. The Angola minister will say to OPEC, 'I'll get back to you when the oil price is $60,'" said Adam Sieminski, chief energy economist at Deutsche Bank.

QUOTA FREE

Analysts doubt that Angola will agree to any production quota that limits output from several new fields expected by the end of the year and in 2008.