Equatorial Guinea Offers to Join OPEC After Agreeing to Oil Cuts

MALABO (Capital Markets in Africa) – Equatorial Guinea said it has offered to become a member of the Organization of Petroleum Exporting Countries after agreeing to cut oil output in cooperation with the group and several other major producers.

“There is a consensus amongst producers that an oversupply of oil has been dragging down the price of the barrel,” Minister of Mines, Industry, and Energy Gabriel Mbaga Obiang said in a statement Monday. “We firmly believe that Equatorial Guinea’s interests are fully aligned with those of OPEC in serving the best interests of the industry, Africa, and the global economy.”

Economic activity in Equatorial Guinea is in freefall due to the slump in oil prices, declining production and corruption. The economy will contract in 2017 for the fifth consecutive year, according to the International Monetary Fund. In 2016, economic activity fell 9.9 percent, the third-largest drop among the 191 countries annually monitored by the IMF and only surpassed by South Sudan and Venezuela.

The West African country averaged 250,000 barrels of oil production a day in 2015, according to the U.S. Energy Information Administration. It agreed last month to reduce daily output by 12,000 barrels, cooperating with OPEC and 10 other oil-producing nations to deliver a total cut of almost 1.8 million barrels for the first half of 2017.

The nation has maintained output “at a competitive level,” Obiang said. He met with OPEC officials in Vienna on Jan. 20 to present the bid for membership. The organization currently has 13 members.

Equatorial Guinea’s oil minister is one of the younger sons of PresidentTeodoro Obiang, the longest running head of state in Africa. He assumed power in August 1979 in a military coup that ousted his own uncle, Francisco Macias, who had ruled the country since independence from Spain in 1968.