Equatorial Guinea has joined African Petroleum Producers Association (APPA) member countries on a concerted action to reduce oil production and stabilise the market.
‘We are reviewing our budget due to lower oil prices. We have supported these initiatives that allow us to study how to jointly stabilise prices in the future,’ said Equatorial Guinea minister of mines, industry and energy, Gabriel Mbega Obiang Lima. He also recalled the importance of diversifying the economies of individual states in order to reduce dependence on oil, as the government of Equatorial Guinea is currently doing.
African countries rely on revenues from petroleum production to finance needed development, infrastructure improvements, and efforts to build robust economies and improve standards of living. APPA’s initiative seeks the support of Opec to reduce the amount of oil on the global market and consequently reach a stable world price at a higher level.
The APPA was created in 1987 in Lagos, Nigeria and is composed of eighteen countries, including Equatorial Guinea. The group also includes the continent’s biggest producers, Nigeria and Angola. It is starting an initiative, led by Angola and Algeria, to seek collaboration between members of Opec and other oil producers to reduce output and stabilise oil prices, which have halved since the end of June.
APPA wants ‘to set up a platform of commitment at the international level from the producing countries,’ said Ousmane Doukoure, director of exploration and production at Cote d’Ivoire’s oil ministry, as he read out a statement at the end of an APPA meeting in Abidjan earlier this month
African countries from Angola to Nigeria to Equatorial Guinea have had to cut their budgets in recent months after the plunge in oil prices affected the amount of income they will get from their biggest exports. Countries, including the continent’s biggest economy Nigeria, have slashed growth forecasts.
Of the African producers only Algeria, Libya, Nigeria and Angola are members of Opec. While some members of Opec have called for an output cut the biggest producer in the organisation, Saudi Arabia, is opposing any reduction in output. ‘The current prices are unfair and are having an impact on the economies of African countries,’ Mashallah Zwai, oil minister for the Tripoli-based Islamist government in Libya, said. ‘We will ensure our voice is heard about this crisis so as to emerge from it as soon as possible.’
Zwai said Africa accounts for about 8 percent of global oil production. Libya is split with a separate government, based in the eastern town of Tobruk, recognised by the United Nations.