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Equatorial Guinea wants to join Opec

23 Jan 2017 11:14 GMT
Equatorial Guinea wants to join Opec

London, 23 January (Argus) — Equatorial Guinea is in talks with Opec about joining the organisation this year.

Oil minister Gabriel Mbaga Obiang was in Vienna at the weekend to talk to Opec officials. The country is already participating in a production restraint deal by 11 non-Opec members, complementing Opec's 1.2mn b/d production cut agreement that runs for six months from this month in a bid to speed market rebalancing.

If Equatorial Guinea joined Opec, it would be the fourth sub-Saharan African member, joining Nigeria, Angola and Gabon. Nigeria has been an Opec member since 1971. Gabon joined in 1975 but left in 1995, only to rejoin last year. Angola has been a member since 2007.

It is not clear why the government in Malabo wants to join Opec now. While Angola and Nigeria are major producers, Equatorial Guinea is a relatively minor player, like Gabon. Crude production is around 240,000 b/d, against some 200,000 b/d for Gabon. It also produces around 44,000 b/d of NGLs.

It agreed to pare crude output by 12,000 b/d as its contribution to the Opec-non-Opec pact.

But the growing segment of its hydrocarbon industry is LNG. The producing operation there boosted output beyond nameplate capacity in July-September last year to some 1.02mn t. And a final investment decision is expected this year for the Fortuna project to develop 26 trillion ft³ of reserves.

If Equatorial Guinea does join Opec, it will take the organisation's membership back up to 14. Indonesia was founder member but left when it became a net importer only to briefly rejoin in 2015, suspending membership at the November 2016 meeting that decided to implement output cuts.