Angola's projected economic growth for this year follows the country's improved oil output in 2006, the leading contributor to its 18 percent growth last year, the international lender said in a recent report.

At the same time, oil production increased 13 percent in 2006 due to the increasing number of new wells in the country and steadily increasing global oil prices.

"Angola's economy has been strong in recent years, thanks to robust growth in both the oil and non-oil sectors �� inflation has fallen, and surging oil revenues have led to large fiscal and external current account surpluses," the report said.

While the IMF noted Angola's steady growth in oil sector, it did criticize the country's lack of transparency, saying there has been no progress on reporting the country's exact output in recent years. In the past, officials at Angola's state oil company Sonangol have been accused of corruption, which according to analysts poses a major challenge to the long-term health of the sector.

Angola's accountability in the petroleum sector could come into question later this year when 10 blocks will be offered for tender in a licensing round, part of its efforts to capitalize on Africa's No. 2 oil reserves.

Sonangol's offering will extend into early 2008 and include both onshore and offshore blocks. The state firm relies heavily on production-sharing agreements with foreign oil companies to maximize its untapped oil potential, Oil Minister Jose Botelho Vasconcelos said.

"We are a Third World economy, and have difficulty obtaining capital," he said this year, according to the Washington Post. "We therefore prefer production-sharing agreements because government investment is only required once a discovery has been declared economically viable."

Sonangol's latest offering will likely pique the interests of both traditional petroleum powerhouses and newcomers hoping to procure alternative oil sources to Middle Eastern suppliers.

Angola's estimated 10 billion to 20 billion barrels of reserves has potential investors from the United States and Russia, as well as France, Australia and China, jockeying to set up shop or augment current production facilities in a country that up until 2002 was embroiled in a civil war.

Sine then, oil output has increased significantly. Petroleum now accounts for about half of the country's gross domestic product and 90 percent of its exports.

Increased production has prompted double-digit growth in Angola for the last three years up to 2006, when the country posted a 14-percent increase in its economy.

Angola's state-run National Agency for Private Investment, known locally as ANIP, has been hyping particular blocks, hoping to generate investor buzz on the international markets.

One such parcel is the Massambala-1 oil field in Cabinda province, where the extract potential is "five times the initial forecast of 33 million barrels," according to ANIP.

In August, Australian energy firm Roc Oil released its own assessment of the block, saying it planned to explore four wells of "high potential impact."

ANIP and Angola are seeking additional investors to explore Cabindan oil fields, which energy officials said would require an initial investment of at least $54 million.

That's money well worth spending to diversify U.S. petroleum resources and reduce dependence on the Middle East, says a recent report by the Center for Preventive Action, an arm of the New York-based Council on Foreign Relations.

"Few African countries are more important to U.S. interests than Angola. �� Angola's success or failure in transitioning from nearly 30 years of war toward peace and democracy has implications for the stability of the U.S. oil supply as well as the stability of central and southern Africa," the report said.

Although Cabinda province produces more than half of Angola's oil, exploration there could come at a price to investors due to the recent fighting there.

Despite last year's peace deal between the government and those Cabindans seeking a separate state, chronic discontentment persists.

Many Cabindan separatists who fled the province have returned and remain discontented with Luanda for not using enough of the country's oil revenue toward development.

(e-mail: [email protected])

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