Angola sets sights on OPEC

Fast-growing oil producer Angola, along with Ecuador and Sudan, may join OPEC, an expansion that would bolster the cartel’s influence over oil prices worldwide.

Officials in Angola and Sudan said Thursday that the African nations planned to apply for membership in the 11-nation Organization of the Petroleum Exporting Countries. That follows a similar declaration this week by Rafael Correa, the newly elected president of Ecuador, a former OPEC member that left the group in 1992. In all, the three countries would bring about 2 million barrels of daily oil production to OPEC, which pumps more than a third of the world’s oil.

“There is this question of does OPEC matter anymore? And, with these new members, it pretty much answers that question,” said David Kirsch, an oil markets analyst with PFC Energy, a Washington-based consulting firm. “The answer is yes.”

But for Kirsch and others, the possible swelling of OPEC’s ranks raises questions about future output by the three oil-pumping nations, particularly because they would be joining OPEC at a time when the group is pushing for production cuts to keep oil prices up.

The cartel cut its nearly 28 million barrels of daily oil production by 1.2 million barrels a day beginning Nov. 1, which has helped push crude prices up about 7%. Member countries appear divided over whether to reduce output further when they meet in Nigeria on Dec. 14.

In New York futures trading Thursday, the OPEC news helped boost the cost of light sweet crude for January delivery by 67 cents, to $63.13 a barrel.

For prospective OPEC members, “it means status. It means they have a seat at the table,” said Daniel Yergin, chairman of Cambridge Energy Research Associates in Massachusetts. “The challenge will be, what are the terms of membership?”

That’s especially true for Angola, where oil production is set to grow more than 40% next year and double in the next six years, Yergin said.

“They’ll probably be asked to do more than their share of cuts,” said Kirsch of PFC. “That could mean unhappy consequences for equity partners.... You have rising costs, you have a history of delays, and now that you’re coming on line, the government’s going to come to you and tell you to produce less. That’s not really the news you want.”

One of those companies is Chevron Corp. of San Ramon, Calif., which has substantial oil and natural gas projects in Angola. “It is premature to speculate about the decision,” Chevron said Thursday in a statement about Angola’s potential OPEC membership.

Fadel Gheit, senior oil analyst at Oppenheimer & Co., said he wasn’t convinced that the possible OPEC expansion would lead to cutbacks in Angola, a major exporter to the United States and the largest oil producer among the three countries considering OPEC membership.

“Any country that has growing oil production would not benefit joining OPEC,” Gheit said. He added that if Angola joins the cartel, “it would be just to carry the membership card. They would not observe any speed limits.”

elizabeth.douglass@latimes.com

Reuters was used in compiling this report.