"We anticipate that oil production in Angola will decline in the long run, with oil, liquefied natural gas and other liquids contracting, on average, 2.2 percent per year until the end of our 10-year forecast , reaching 1.03 million barrels per day in 2030 ", say the analysts.
According to an analysis of the oil sector, sent to investors and to which Lusa had access, analysts of this consultancy owned by the same owners of the financial rating agency Fitch Ratings write that reforms have slowed down and oil companies have changed in the wake of the pandemic.
In official terms, Angola's average production during 2020 was 1.277 million barrels per day, with Fitch Solutions' forecast for 2030 a production of 1.030 million barrels per day, which represents a 19.3 percent drop.
"Since 2018, oil and gas reforms have slowed down and companies now need concrete signs of change to unlock substantial investments for Angola's upstream sector," the report said. .
Despite the ten-year forecast pointing to a decline, Fitch estimates that production this year and next year should increase by 2 and 4.2 percent, respectively, despite having reduced production last year.
The second largest African producer, behind Nigeria, Angola "has substantial oil reserves, but the greatest potential for exploration is in deep and ultra-deep waters, which requires the provision of high-cost, high-risk investments."
Consequently, Fitch analysts point out, "the lower and more uncertain price environment means that projects awaiting the Final Investment Decision are at risk of being delayed or being abandoned altogether if prices do not rise."
To support the prediction of a sustained decline in oil production if there is no significant increase in new investments, Fitch Solutions analysts point out that "following the collapse of oil prices in 2020 and the significant decline in demand due to the covid-19, there was a change in the long-term strategies of the largest companies, evading high-risk projects with capital-intensive requirements and seeking to give priority to low-carbon projects ".
According to OPEC data, Angola saw a reduction of 139 thousand barrels per day in 2020 compared to 2019.