Angola seeks to cut cost per barrel to $8-10

Africa’s leading oil exporter Angola has announced a bold intention to cut the cost of producing one barrel of crude oil in the country by as much as a third as oil prices settle above $50/b for the first time in more than eight months.

The cost of producing one barrel of oil in Angola today is estimated at $14 but  Sonagol CEO Paulino Jeronimo the plan of the government is to bring this cost down to between $8 and $10 a barrel.

Costs in Nigeria hovers around the $20 mark although many analysts believe this can be reduced aggressively especially in the face of the drop in oil price.

This is as the price of Brent continue to benefit from a tight supply situation brought about by supply disruptions in countries like Nigeria as well as strong refinery demand.

In the meantime, Russia says  it isn’t buying into the optimism that a rally in oil has legs. Supply disruptions including Canadian wildfires and militant attacks in OPEC member Nigeria have driven prices higher, with the improving outlook for crude not grounded in fundamentals, Finance Minister Anton Siluanov said at a government meeting in Moscow on Thursday. Prime Minister Dmitry Medvedev said at the same event that the situation was reminiscent of a rebound in the second quarter of last year, which was followed by a “rather serious” decline in prices.