info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Image from petex.com
Angola is Africa's second-largest oil producer and one of the countries with the highest oil dependence in the continent. Some 95 per cent of its export revenues and 70 per cent of its taxes come from petroleum.
There's a problem, however: Angola is running out of oil to sell.
Angola's oil blocks are being quickly depleted as new investment has all but dried up. Production has fallen from a peak of 1.9m barrels per day in 2010 to just above 1.4m b/d.
That has had a devastating impact on an economy that was, until a 2014 fall in oil prices compounded the problem of dwindling reserves, among the fastest growing in Africa. After years of double-digit growth, the third-largest economy in sub-Saharan Africa has failed to grow for four years. This year it is likely to manage less than 0.5 per cent, below the rate of population growth.
That prolonged recession has concentrated minds. President João Lourenço, who took over as president in 2017 from a predecessor who had eked out 38 years in power, has made it his mission to revive the sector, in a country that had earned a reputation as one of the most corrupt in the world.
This month Angola launched a comprehensive licensing round that will see the country auction off 55 new blocks by 2023, including nine in the frontier Namibe Basin. Mr Lourenço has also overseen a sweeping overhaul of the legislative and regulatory environment after consultations with oil majors.
For the first time, Angola is also thinking strategically about how to exploit large reserves of gas, until now considered little more than a byproduct of lucrative oil production.
Angola has also changed its tax and other frameworks to make it more attractive for companies already pumping oil to exploit marginal fields and those contiguous to mature operations.
Roderick Larson, president and chief executive officer of Oceaneering, an oil engineering company, said that instead of having to start a separate concession, oil companies could now extract oil from fields next to their own. "It's invigorated all the oil companies to take a fresh look at Angola," he said, saying the new approach would allow operators to "squeeze all the juice" from fields.
