"Crude oil production will decline by 6.6 percent this year to an average of 1.09 million barrels per day, then recover moderately to an average of 1.13 million in 2026, assuming TotalEnergies' new projects start production," analysts at the African department of the British consultancy wrote, lowering their forecast for oil production growth from 1 percent to a decline of 6.6 percent.
"As the oil sector represents 25 percent of Angola's Gross Domestic Product (GDP), more than 50 percent of government revenues and almost 90 percent of total exports, the downward revision of the oil production estimate will have a significant impact on economic growth this year," they add, thus supporting the revision of the economy's expansion estimate.
"We will reduce our real GDP growth forecast for 2025, from 2.9 percent to 1.6 percent," they explain, pointing out that the fall in the price of oil, from $75 in February to around $65 in the middle of this month, "has further worsened the outlook for oil export revenues."
According to data from the International Energy Agency, crude oil production in Angola fell to 1.06 million barrels per day in April, slightly down from 1.07 million in March, which compares with production of nearly 1.18 million barrels per day last year, and is the lowest level since June 2023.
TotalEnergies and CLOV3 projects have not started operating in 2024 and so far as expected, and in the absence of others that increase production, "the numbers will continue to be under pressure for the rest of the year".
Despite these difficulties, Oxford Economics says there are several positive developments for sub-Saharan Africa's second-largest oil producer, notably new investments that could reach $60 billion over the next five years, and the entry into operation of new projects by Eni and Azule Energy in 2026.
