The consultancy Oxford Economics Africa warned today that the containment measures in place in China could jeopardize the increase in oil production in Angola, one of the main suppliers of oil to the Asian giant.

"We forecast Angola's oil production to rise from 1.13 million barrels per day in 2021 to 1.18 million this year, but the risks are downside, mainly due to the possibility of more technical problems and delays in the implementation of new projects, in addition to China's containment measures, a country that accounts for more than 70% of Angola's exports," the analysts note.

In a note on production developments in the oil sector, the analysts write that "the containment in China due to the spread of the Omicron variant, which has been extended to more than half of China's major cities, is reducing purchases from Angola," which is particularly important given that "last year, China was the destination for more than 70% of Angolan crude exports."

Oil production in Angola fell for the second consecutive month in March, but improved slightly in the first quarter of this year when compared to the first three months of last year.

"Revenues almost doubled in this period, essentially due to the increase in global crude prices," point out the analysts in the report, which is quoted by Lusa, and in which it is pointed out that production, in March, fell from 1.16 million barrels per day in February to 1.14 million in March, a month in which production was 300,000 barrels per day below target, which compares with a difference of 240,000 barrels less than allowed in the OPEC agreement, in December last year.

The still limited production is, however, offset by higher oil prices in the first quarter of this year: "Oil revenues in the first quarter of this year rose by almost 85%," say analysts at Oxford Economics Africa.

All of this, they conclude, "is strengthening the kwanza and strengthening Angola's fundamentals as a sovereign issuer," as evidenced by the recent public debt issue, the second in Africa since the war in Ukraine, which received twice as many bids for the $1.75 billion issued, a little more than half of the $3 billion initially expected.

Source: Lusa