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The “gap” between the estimated production in the 2023 Budget and the actual is around 91,781 barrels/day. For the first time in recent years, the main cause of the drop in oil production is not the natural decline in production. There are increasingly more shutdowns for maintenance on Angola’s “aging” wells.
The oil production shutdowns recorded throughout the year have stolen 33.5 million barrels of oil from the country’s annual production, according to calculations by Expansão based on production projections in the 2023 Budget and with the new forecasts in the Executive Macroeconomic Programming (PME) made in September, which is included in the 2024 Budget proposal.
According to the still in effect budget for 2023, 430.7 million barrels were expected to be produced, and now in the PME it has dropped to 397.2 million, a fall equivalent to 91,781 barrels per day.
At the heart of this revision of the projected production for the year 2023 is essentially the impact of scheduled and unscheduled maintenance, which ended up having a significant impact on the Budget, as it substantially cut oil fiscal revenues. In the first quarter alone, according to the 2024 Budget proposal, there was an “8% drop in oil production, including gas production, justified by the scheduled and unscheduled emergency maintenance stops of oil platforms and the resolution of malfunctions, some with longer than anticipated downtime, in various oil blocks, namely 0, 14, 15, 15/06, 17, and 18, affecting their performance.”
In practical terms, the document was made in September when there were 4 months left in the year and the Executive already admitted that there were no conditions to meet the annual oil production target once again, a trend that is not new. It is usual in recent years for the actual production numbers to fall below those programmed in the Budget. Yet there is one exception, which was 2022.
Thus, 2022 was the first year where the main culprit of the drop in oil production was not the natural decline in production that occurs due to the aging of the oil wells. As wells age, they produce more water and sand than oil, which over time reduces the maximum production capacity of these wells.
Another consequence for the decline in production, which in 2012 was close to 2 million barrels of oil/day, and which today is 1,088,000 barrels, is the increased frequency of maintenance on the fields due to their old age and that of the equipment itself.
Below 1 million barrels in March
Between January and June, Angola produced 193.8 million barrels, which gives a daily average of 1.07 million barrels, according to calculations by Expansão based on data from the National Bank of Angola (BNA). This is a value of more than 100,000 barrels per day below what was inscribed in the 2023 Budget.
And the worst month was March since production was below one million barrels/day, more specifically 969,000, being the lowest value in recent years. This drop in production was mainly due to stops in blocks 14, 0, and 17.
