- With 47 blocks since 2019, country clearly leads Africa’s hydrocarbon share
- Big lesson to Nigeria on contracts renegotiation,
Ben Eguzozie
Angola, by far Africa’s hydrocarbon leading nation, is waltzing to position itself as Africa’s and one of the world’s most competitive and rewarding hydrocarbon market, with 15 new oil concessions by year-end. This will unpack an investment pipeline of more than $60 billion across its upstream market within the next five years to 2030. These are predominantly from work budgets that have already been approved.
The National Oil, Gas & Biofuels Agency (ANPG) – Angola’s concessionaire and regulator, announced that the 15 new concessions will be awarded in the country before the end of 2024, according to Hélder Iombo, ANPG’s director of negotiations. These additional licences bring the total number of awarded blocks in the country to 47 since 2019.
Angola currently offers 30 block opportunities. The country concluded its 2023 tender in January 2024, securing 53 bids from a suite of companies, and is preparing to launch its next bid round in Q1, 2025. To date, 32 concessions have been awarded since 2019, with more than 50 blocks expected to be licensed at the end of the country’s six-year licensing round next year.
Iombo said: “We have six energy majors active in Angola, and currently, all these majors are expanding their portfolios. This is clear that the policies Angola has been implementing are effective”.
He added that in addition to implementing decrees, “we have renegotiated all of our contracts to provide better terms for investors, to encourage companies to not only invest but increase production. This is a key pillar enabling us to maintain production at 1.1 million barrels per day. We have also approved the incremental production decree, which will be published soon.”
Looking ahead, Angola aims to maintain production through its next bid round, permanent offer program and incremental production initiative. Up to 9 blocks are available in the 2025 bid round; 11 through the permanent offer program; 6 onshore blocks; and – for the first time ever – 4 marginal field opportunities are on offer. These opportunities aim to drive exploration and development in Angola.
With 47 blocks awarded since 2019, Angola clearly leads Africa’s hydrocarbon market share of roughly eight percent, and which is expected to register a cumulative annual growth rate (CAGR) of more than 5.5% during the period of 2022-2027, according to industry-based reports.
Some oil and gas experts told our correspondent that Angola’s new hydrocarbon policies of renegotiating all its contracts, to offer better terms for investors, incentivize existing companies to increase their investment portfolios, provides a big lesson to Nigeria, where poor policies have rather forced investors to massively disinvest in the country.
A report in the Africa Report, a journal on African politics and business, stated that in the past 11 years, the IOCs had divested a total of 26 Oil Mining Licences in the Niger Delta Basin with more set to be sold.
Additionally, according to a Wood Mackenzie report, divestments in Nigeria since 2010 have totalled $21 billion, with a pending $1.2 billion ExxonMobil sale.
Meanwhile, beyond new blocks, Angola is incentivizing reinvestment across its producing assets. Victor Santos, technician DPRO at the ANPG, explained that “most of the basins in the Lower Congo basin are mature and have produced for years, but we realised that these fields still offer potential that can be optimised, adding new oil to the production system in Angola. To increase production, we needed to change the terms, so that we incentivize operators to bring new production online.”
The country’s incremental production initiative offers improved fiscals for oil produced above the base-production levels of the existing asset. This way, companies have the means to recover costs, invest more and produce more.
