Angola’s oil and gas sector rides a new wave of global investments
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Loading... - Martha Adu
- 16 May 2023
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Angola's oil and gas sector is experiencing a notable surge in new investments in recent months, thanks to the upward trajectory of oil prices, as indicated in a recent report by Deutsche Bank.
As the second-largest oil producer in Africa, Angola possesses significant oil reserves, estimated at approximately nine billion barrels of proven crude oil reserves and 1.6 trillion cubic feet of proven natural gas reserves.
Deutsche Bank's Head of Natural Resources Finance UK, Danai Koutra, mentioned that substantial investments are flowing in from prominent oil companies.
Angola claimed the position of the top African crude oil producer for the month of April, with a crude production of 1.06 million barrels per day (bpd), according to the Organization of Petroleum Exporting Countries (OPEC) monthly oil market report.
According to the report, the influx of new investments and bank lending supports the Angolan government in its goals related to environmental, social, and governance (ESG) objectives, as well as energy security. The report cited Azule Energy's seven-year $2.5 billion pre-export financing, which was signed in August 2022.
Azule Energy, a joint venture between the Angolan operations of leading oil industry players BP and ENI, has become Angola's largest independent equity producer of oil and gas. The venture currently possesses two billion barrels equivalent of net resources, with plans to achieve an equity oil and gas production of approximately 250,000 barrels equivalent per day (boe/d) over the next five years.
Koutra emphasized that the oil and gas industry possesses the necessary expertise to assist in the global transition towards achieving net-zero emissions. This transition presents investment opportunities and the potential for increased employment.
Angola already generates more than half of its energy from hydroelectric power, thanks to its extensive network of waterways, and is well-positioned to tap into its onshore and offshore wind resources.
In 2022, Energy, Capital and Power highlighted Angola's interest in collaborating with European companies, renowned for their expertise in successfully executing wind energy projects, as ideal partners.
Furthermore, Angola has approximately 35 million hectares of arable land, of which only around 10% is currently cultivated. Agriculture contributes only about 10% to Angola's GDP, indicating substantial room for further investment and lending to enhance the value of this sector.
Banco de Desenvolvimento de Angola, a public financial institution established to support Angola's sustained economic growth, played a crucial role in supporting a private sector project in Angola. Deutsche Bank acted as the sole arranger, agent, and lender in the €56.9 million export agency-covered financing for this initiative.
Werner Schmidt, Head of Structured Trade Export Finance at Deutsche Bank, stated that this production facility facilitates Angola's economic transition from relying on commodity production to developing higher-value food processing, thereby reducing food imports and stimulating local economic activity.
