President João Lourenço has made it a priority to revive Angola’s oil and gas sector through regulatory reform and changes to the tax framework, which have encouraged international oil companies to take a fresh look at the country.
Angola, an Organisation of the Petroleum Exporting Countries (OPEC) member, produces approximately 1.37 million barrels of oil per day and an estimated 17,904.5 million cubic feet of natural gas.
This places Angola as sub-Saharan Africa’s second-largest oil producer after Nigeria. Around 95% of export and 70% of tax revenues come from petroleum.
The industry is dominated by the upstream sector – exploration and production of offshore crude oil and natural gas.
Almost 75% of Angola’s oil production comes from offshore fields. It produces a light sweet crude oil containing low volumes of sulphur, suitable for processing light refined petroleum products.
The oil-rich continental shelf off the Angolan coast is currently divided into 50 blocks. This is expected to more than double with the auctioning of new blocks from 2019 to 2025.
Despite being a leading oil producer in sub-Saharan Africa, Angola imports up to 80% of its demand for refined petroleum products from commodity traders such as Vitol and Trafigura. The Government of Angola has plans for the construction of national refineries to increase its refinery capacity.
In 2018, in response to declining investment, the Government introduced legislative reforms, began to restructure the state oil company, Sonangol, and created the National Concessionaire – Angola’s Oil, Gas and Biofuels Agency (ANPG) – to oversee licensing.
The process for approval of contracts with third parties to carry out petroleum operations is now simplified, and taxes reduced.