However, the southern African country’s refining capability remains way below its domestic fuel consumption with the government of Angola spending over $2 billion on petroleum imports per annum to meet local demand.
Market Growth Necessities
In this regard, massive investments in upstream, midstream and downstream activities and in infrastructure rollout, including refineries, and further reforms to existing policies and fiscal terms is therefore essential to maximize exploration, production and the exploitation of the country’s vast yet untapped hydrocarbon resources to ensure fuel self-sufficiency.
With major downstream projects, such as upgrades to the existing Luanda refinery and the development of three new refineries in Soyo, Cabinda and Lobito underway, improved use of public-private partnerships is crucial for the country to gather the massive capital required to accelerate and complete projects deployment.
During a panel discussion, exploring investment opportunities across the Angolan energy market, held at the African Energy Week conference in Cape Town, Osvaldo A. Inácio, Executive Board Member at Sonangol, said “In 2021, we secured 4.2 million tons of refined products to meet local demand. Angola has been importing a lot of refined products and we want to change that. The three new refineries will be a game changer and will add 450,000 barrels of energy per day. We are looking for investors interested in joining us and we are grabbing partners as we go because the country really can’t wait any longer. We had a good conversation with Afreximbank about financing partnership.”
Regime Optimization and Financing Fuel Self-Sufficiency
The continued modernization of the regime which includes reductions in petroleum taxes for market players and the creation of the Agency for Private Investment and Promotion of Exportations in 2018 is a huge testimony of the government’s commitment to attract more foreign direct investment and accelerate private sector participation to make the journey to fuel self-sufficiency shorter.
Moreover, the Angolan government’s stance of leveraging financing cooperation with regional governments to accelerate the rollout of midstream and downstream infrastructure could be a game changer – having signed a Memorandum of Understanding with Zambia to cooperate on the Lobito Refinery project in April, 2022 and implementing a feasibility study for the two countries to jointly develop the Angola/Zambia Oil Pipeline.
Furthermore, Angola’s joining of the Extractive Industries Transparency Initiative in June, 2022 will not only enable the country to reinforce anti-corruption efforts, reform the operations of national oil and gas agencies but will also the business environment and investment climate and, in the process, attract private sector investments required to maximize operations across the entire oil and gas value chain for the country to ensure fuel self-sufficiency.
In addition, by addressing delays previously incurred in signing and renewing exploration and production contracts, and by optimizing local content requirements, Angola is set to see an influx in oil and gas companies and upstream investments and be able to achieve fuel self-sufficiency.
Moreover, with the Agência Nacional do Petróleo, Gás (ANPG) set to grant licenses in onshore and in interior basins to 12 blocks in 2023 and auction more than 11 blocks in pre-salt fields in 2025, Angola is set to become an exploration hub and be able to increase energy production to meet growing local demand as output is currently being disrupted by natural declines in legacy projects despite the country becoming Africa’s largest oil producer.
Keen to find out about how Angola seeks to fast track its energy developments for fuel self-sufficiency? Then AOG presents the best platform for you to engage with the country’s regulatory authorities and key energy market players.