Angola, the second largest oil producer in Africa with 1.6 million barrels of oil per day and an estimated 17,904.5 million cubic feet of natural gas production, is looking to achieve self-sufficiency in the production of refined products such as fuels and lubricants by 2021.
The country’s president, João Lourenço, disclosed this during the swearing-in ceremony for several state oil and gas positions, affirming that this will be made possible by the expansion of the country’s only refinery in Luanda, and the construction of two refineries in Cabinda and Lobito, which will help to quadruple production by 2021 and reach its downstream targets.
Since 2014, very limited investment in either new or mature exploration and production fields has occurred, largely due to the significant drop in oil prices and limited foreign currencies in the Angolan market. This limited investment in turn has led to the current daily lifts of 1.55 million barrels of oil per day (bpd), a thousand barrels below capacity. Nonetheless, the country holds 9 billion barrels of proven oil resources and 11 trillion cubic feet of proven natural gas reserves, which represent great potential for further economic development and significant business opportunities.
Angola’s oil industry is dominated by its upstream sector – exploration and production of offshore crude oil and natural gas. Almost 75 percent of the oil production comes from off-shore fields. Angola produces light sweet crude oil containing low volumes of sulphur, suited for processing light refined petroleum products.
Since entering into office in 2017, Lourenço has actively sought to reform the oil and gas industry in Angola, from opening of marginal fields to African independents to deep changes in tax laws, and also a new regulatory structure for a Petroleum Agency developed to assume the concessionaire function concession contracts.
Indications suggest that these measures are working—the World Bank’s economic outlook for Angola released in December 2018 predicts GDP will grow by 1.7% in 2018 and 2.2% in 2019—the first time the country will have seen positive growth since 2014. An improved investor environment is listed as a cause for the improvement.
Mega oil and gas projects have achieved final investment decision since 2018, and several more are headed for FID in 2019 and 2020. A new licensing round is expected to attract new international explorers to the country, as well as promote the participation of Angola’s domestic sector by offering incentives for marginal fields.