Sonangol needs bigger Galp slice

SONANGOL SHOULD BOLSTER its stake in Portugal's Galp Energia as part of its strategy to expand its business abroad, according to oil minister Jose Botelho de Vasconcelos.

He was quoted as saying Sonangol, Galp and Brazil's Petrobras were in talks to create a "strong partnership" to develop both upstream and downstream projects.

Asked whether he thought Sonangol would succeed in increasing its stake in Galp, Reuters quoted Botelho de Vasconcelos saying: "I think so, as there are advantages for everyone (involved)."

Sonangol owns a 45 per cent stake in Portugal's Amorim Energia, which in turn holds 33 per cent of Galp. The head of Sonangol, Manuel Vicente, said in February there was a possibility that Sonangol could bolster its stake in Galp.

Italy's Eni has said that it would sell its 33 per cent stake in Galp if it fails to gain control of the Portuguese company. There have been reports in the Portuguese media on Petrobras and Sonangol's growing interest in Eni's stake in Galp.

Botelho de Vasconcelos said even though oil prices remain volatile, he expects prices to stabilise at between $70 and $80 per barrel this year, according to O Pais newspaper.

"Although we are currently witnessing oil price volatility, the balance will be re-established and oil prices will remain in the $70 to $80 per barrel interval," he was quoted as saying on the online edition of the Angolan newspaper.

Botelho de Vasconcelos added that oil stocks remained high and Opec members should continue to monitor prices in case they reached "worrisome levels".

"In the organisation we must keep a certain degree of serenity and verify if effectively prices reach worrisome levels," he said. The former Opec president added he saw $80 per barrel as a viable price for both consumers and producers.

Botelho de Vasconcelos said Angola was currently producing 1.75 million barrels of oil per day, in breach of its quota, despite repeated calls for greater compliance to the Opec cuts from the group's secretary general Abdullah al-Badri.

Angola has consistently produced more than its implied output target, which it has disputed, saying it is 1.656 mn bpd - compared with a figure of 1.52 mn bpd in a widely circulated Opec internal document.

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