Angola, Zambia to Restart Talks On Pipeline Construction

By Tsvetana Paraskova, Oilprice.com

Zambia and Angola are set to resume talks on the construction of a pipeline that would carry petroleum products from oil-rich Angola to major copper producer Zambia, which imports all its petroleum needs, according to a senior Zambian government official.

Back in 2012, Zambia’s investment promotion agency said that a Zambia-registered company was planning on building a multi-petroleum product pipeline from Angola to Zambia’s capital, Lusaka, after a 200,000-bpd refinery is completed in Angola. The refinery project was expected to be commissioned by the beginning of 2014.

Zambia is still interested in the project as it seeks to offset soaring fuel prices after removing fuel subsidies, energy minister David Mabumba said at a press conference, according to Xinhua.

Oil-rich Angola has long been the second-largest oil producer in sub-Saharan Africa, behind Nigeria, according to the U.S. Energy Information Administration (EIA).

In recent months, however, Angola has become Africa’s top producer following numerous militant attacks on Nigeria’s oil infrastructure. According to OPEC’s September output figures, Nigeria’s crude oil production rate was still behind that of Angola. Nigeria’s crude production rose by 280,700 barrels per day to 1.385 million bpd in September, which was still lower than Angola’s 1.649 million bpd rate.

In a wake-up call to African commodity exporters, last week the International Monetary Fund (IMF) warned that their economies need a prompt and sustained policy adjustment in the world of low commodity prices.

Most exporters of commodities are under “severe economic strain”, with oil exporters hit the worst as the price shocks are spreading to the entire economy, Abebe Aemro Selassie, Director of IMF’s African Department, said.

“Given the scale and persistent nature of the shock, and as existing buffers have been exhausted, a comprehensive three-pronged adjustment effort is needed urgently: Strong fiscal adjustment, enhanced social protection policies, and structural reforms to facilitate competitiveness and diversification,” Selassie said in IMF’s statement.

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