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Monday, 3 December, 2001, 17:32 GMT
BP fails to strike Angolan oil
Luanda skyline
Angola's government relies on oil dollars
Energy giant BP has yet to find oil in the Angolan offshore well for which it paid a hefty concession fee two years ago.

In 1999, the Angolan government sold three concessions for Block 31, earning an estimated $1bn in signing bonuses.

Hopes remain high that BP will find oil, given that Angola is considered to be one of the world's leading oil exploration provinces, with an estimated 12 billion barrels in offshore reserves.

We are on OPEC's side but we have a number of undertakings we must meet

Oil minister Jose Botelho de Vasconcelos
Earlier on Monday, news emerged that Angola is likely to produce more oil in the next few weeks, a move likely to anger the Organisation of Petroleum Exporting Countries ( OPEC).

More Angolan oil

Angola is sub Saharan Africa's second-largest oil producer behind Nigeria, and like Nigeria, relies heavily on on oil dollars.

Almost 90% of next year's $5bn state budget is expected to be financed from oil revenues.

Angola produces about 750,000 barrels a day and is expected to produce about 200,000 barrels a day more when TotalFina's giant Girassol field starts to produce oil in the near future.

Oil minister Jose Botelho de Vasconcelos has said that Angola needs to produce more oil to finance the civil war and pay off its debt.

"We are on OPEC's side but we have a number of undertakings we must meet," he said.

Executives at state oil company Sonangol made more conciliatory comments later in the day.

"We are studying to see if we can collaborate with OPEC," Syanga Abilio, executive administrator of state oil company Sonangol, told an oil conference in Luanda.

BP hits water

Oil exploration in Angola enjoys an unusually high oil strike rate - 85% compared with a global average of 50%.

The exploration in shallower waters has proved lucrative for other energy companies and industry observers believe it likely that BP will find oil.

"This was the first well and it was drilled in a difficult area near an ocean-bottom canyon," one industry source said.

Earlier this year, BP announced plans to invest $7bn in its Angola operations over the next decade.

See also:

24 Nov 01 | Country profiles
Country profile: Angola
02 Aug 01 | Business
BP to pour $7bn into Angola
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