Oil & Gas Opportunities in Angola

7/31/2019 Oil & Gas Opportunities in Angola

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Se ct o r b r i e f i n g

Oi l & Ga s Op p o r t u n i t i esi n A n g o l a

W h y A n g o l a?

Staggering growth, breathtaking development

and ambitions to become an internationalplayer have combined to make Africas fastestgrowing economy an attractive proposition tothe worlds biggest oil companies.

All have made massive financial investment inthe oil and gas sector, signalling theircommitment to OPECs newest member. Newdevelopments, both upstream and downstreamare set to boost production and increaseopportunities in the supply chain.

Find general information on Angolan marketconditions on UKTIs website . The DoingBusiness Guide for Angola gives an overview of Angolas economy, business culture, potentialopportunities and an introduction to otherrelevant issues.

A n g o l a s o i l a n d g a s s ec t o r i sa v er y l o n g w a y f r o ms at u r a t i o n p o i n t .Op p o r t u n i t i e s e x i s tt h r o u g h o u t t h e su p p l y ch a i n ,a n d o n t h e p e r i p h e r y

U K Tr ad e & I n v e s t m e n t Sector briefing: Oil & Gas opportunities in Angola
http://www.ukti.gov.uk/export/countries/africa/southernafrica/angola.htmlhttp://www.ukti.gov.uk/export/countries/africa/southernafrica/angola/doingbusiness.htmlhttp://www.ukti.gov.uk/export/countries/africa/southernafrica/angola/doingbusiness.htmlhttp://www.ukti.gov.uk/export/countries/africa/southernafrica/angola/doingbusiness.htmlhttp://www.ukti.gov.uk/export/countries/africa/southernafrica/angola/doingbusiness.htmlhttp://www.ukti.gov.uk/export/countries/africa/southernafrica/angola.html


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O v e r v i e w

Since its discovery in the 1970s, Angolas oilindustry has been the backbone of thecountrys growth and development. The end of a devastating three-decade civil war heralded anew era in the industry, enabling Angola toharness the massive potential as an engine forgrowth.

Angolas economy is heavily dependent on theoil sector, funding around 85% of thegovernments annual budget, accounts for 55%of GDP and almost 95% of exports.

Angola vies with Nigeria to be Sub-SaharanAfricas biggest oil producer, producing onaverage 1.9m bpd in 2009. Between Januaryand November 2010 over 590m barrels wereproduced. It is clear that production couldincrease, but the IOCs are constrained byOPEC quotas.

Initial discoveries were made onshore in theKwanza Basin area, but now nearly 75% of production comes from offshore, mostly deep-water. This is set to increase, with morediscoveries being made in the ultra-deep waterand pre-salt fields. Angolas oil is said to begood quality and highly desirable, medium tolight crude with a very low sulphur content,making it easily refined into petrol.

Some of the major projects that are underwayinclude:

BPs Block 31 - an ultra-deep water fieldemploying the FPSO model. It will havea storage capacity of 1.8m barrels; 48production, gas and water injection plusinfill wells; 15 manifolds and associatedsubsea equipment; 17 km of flowlinesand 94 km of control umbilicals.Production is scheduled to start in 2011

and plateau to around 150,000 bpd in2012. To date, 19 discoveries havebeen made in Block 31.

Block 17, operated by Total, wasconsidered the golden block of thedeepwater fields. It came onstreamwith 13 discoveries out of the first 15exploration drills. Another FPSO facility,it cost an estimated US$4bn, with astorage capacity of 240,000 bpd; 34production wells; 30 water injection and

3 gas injection wells. Average output of is 850,000 bpd, with reserves of over 1billion.

ExxonMobil produced its billionth barrelof oil in 15 years from Block 15 in 2010.The Kizomba C developments feature36 subsea wells and is the largestsubsea development operated byExxonMobil worldwide. It is Angolaslargest production facility, designed toproduce 600 million barrels, and set to

increase when the satellite fields comeonstream.

Org a n i s a t i o n o f t h e se ct o r

The state oil company Sonangol was foundedimmediately after independence from Portugal,and is still owns exclusive rights to Angolashydrocarbons. It can choose to sell theserights to International Oil Companies (IOCs),and acts as industry regulator. All the big IOCsoperate in Angola: BP; Chevron; Total; Eni;ExxonMobil. Sonangol P & P is the explorationand production arm of Sonangol. In total, 45companies operate here, in all sections of thesupply chain, including Halliburton,Schlumberger, Wood Group, Tullow, andCameron. All companies need to ensure agood working relationship with both Sonangol,and the Ministry of Petroleum (MinPet).

The government is keen to ensure that thecompanies involved in the industry re-invest inAngola to help with reconstruction efforts. Thecontract bidding process demands a significantdegree of local content provision. Foreigncompanies looking to work in the sector willneed to demonstrate how they will fulfil thatrequirement. In reality, this often meansworking with an Angolan company, sourcinggoods from a local supplier, and employingAngolans rather than expats. This requirementis rigorously implemented, and companies areadvised to address the issue early on in theirbusiness planning.

As with all sectors in Angola, the industry istightly regulated, heavily bureaucratic and anadministrative maze. In order to negotiatethese labyrinthine processes we suggest thatcompanies employ an advisor based in Angolato supervise the early stages of their businesshere.



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O p p o r t u n i t i e s

Angolas oil and gas sector is a very long wayfrom saturation point. Opportunities existthroughout the supply chain, and on theperiphery.

Upstream

New licenses for exploration of the pre-saltfields have been announced, but yet to beconfirmed. Given that the geology is similar toBrazil, where there have been significantdiscoveries, Sonangols production division isconfident of early success. The biggestchallenge is to identify the most appropriatetechnology and methods, and sourcingoverseas investment to optimise exploration.

Downstream

Angola has only one refinery, which is runninga full capacity. This has resulted in astaggering 70% of oil needing to be imported.A new refinery is being planned in Lobito,south of Luanda. Sonangol is investing $8bn inbuilding the plant, which will initially produce150,000 bpd of refined products, rising to200,000. The plant is due to come onstream inlate 2011, with the final phase completed in2013.

Angola Liquid Natural Gas (Angola LNG)

Sonangol, in partnership with Chevron, BP, Eniand Total, are making more profitable use of the currently flared gas, by liquefying andselling on to international markets. Initially,the project will transport gathered gas fromChevrons Block 15 by 124 km sub-seapipelines to the LNG plant in Soyo (northernAngola). Other blocks to supply will be 0, 1, 2,14, 17 and 18. The plant will cost $9bn, andhave an initial capacity of 5.2m tonnes peryear. Construction is expected to becompleted by 2012.

Periphery

Other areas which are severely underdevelopedinclude:

Training there is very little provisionof vocational and competence trainingthroughout the sector. The labour poolhas a very low skill set, and companiesneed to invest heavily in training tomeet Angolanisation and local contentrequirements. The sector is also calling

for transferable recognised qualificationstandards

Manufacturing. Angola has a very smallmanufacturing base, hence around 85%of all products are imported. Valves,consumables and steel are all inparticular demand. The governmenthas committed to supporting this sector,

and there are increasing calls for theintroduction of tax incentives to attractinvestment.

F u t u r e

According to Business Monitor International,Angola will provide almost 20% of Africas oilby 2014, and suggests that it has the greatestproduction growth potential. Sonangolsdirector of exploration states that only 10% of oil resources have been discovered. Angolasvice minister of petroleum, Anibal da Silva,states that oil output is to rise by 16% in 2011.These are bold claims, but there is significantevidence to back them up.

Wood Mackenzie quote that Angolasrecoverable oil and gas reserves areconsiderable: 21bn barrels and 8 trillion cubicfeet (tcf) respectively. Probable undiscoveredreserves of each are anything up to three timesthat quantity. In addition, over 30 newdiscoveries are under development, and anumber of new deepwater projects will beonstream in the coming months. Combinedwith imminent pre-salt licensing awards, theindustrys breathtaking development is set tocontinue.

If you have any questions on the opportunitiesabove, contact the UKTI contacts named in thisreport.

Business opportunities aimed specifically at UKcompanies are added daily to UKTIs website.These leads are sourced by our staff overseasin British Embassies, High Commissions andConsulates, across all sectors and in over 100markets.

You can be alerted to business opportunities ona regular basis by registering on the UKTIwebsite. Find out more on UKTIs businessopportunities service on the UKTI website .

http://www.ukti.gov.uk/export/accessinginternationalmarkets/businessopportunitiesalerts.htmlhttp://www.ukti.gov.uk/export/accessinginternationalmarkets/businessopportunitiesalerts.htmlhttp://www.ukti.gov.uk/export/accessinginternationalmarkets/businessopportunitiesalerts.htmlhttp://www.ukti.gov.uk/export/accessinginternationalmarkets/businessopportunitiesalerts.html


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M a j o r e v e n t s a n d a ct i v i t i e s

Al l Ene r gy Abe r deenw w w . al l - en e r g y. co . u k Email: [email protected]: 18-19 May 2011

FI L D A I n t e r n a t i o n a l Tr a d e Fa i rL u a n d aContact: Contact hereEmail: f e i r a s@f i l - ango la . co . ao Time: July 19-24 2011

O ff s h o r e Eu r o p eh t t p : / / w w w . of f sh o r e -e u r o pe .c o.u k Time: 6-8 September 2011Location: Aberdeen, UK

Fi n d f u l l d e t a i l s o f a l l e v e n t s i n t h i s

c o u n t r y a n d s e ct o r o n t h e U K TI w e b si t e . New export events are added daily to the siteand you can register to be alerted to them on adaily, weekly or monthly basis

UKTIs Tradeshow Access Programme (TAP)provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attendtrade shows overseas. Find out more aboutUKTI support for attendance at overseasevents

U KTI c o n t a c t s

Karen Nea lHead, UKTIBritish Embassy AngolaTel: (244) 222 334 582Email: ka ren .nea l@fco .gov.ukw w w. u k t i . g o v. u k

Dav id AncaDeputy HeadBritish Embassy AngolaTel: (244) 222 334 582Email: Dav id . anca@fco .gov.ukw w w. u k t i . g o v. u k

http://www.all-energy.co.uk/mailto:[email protected]://www.offshore-europe.co.uk/https://www.ukti.gov.uk/uktihome/register.htmlhttp://www.ukti.gov.uk/export/accessinginternationalmarkets/tradefairsandexibitions.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]://www.ukti.gov.uk/export/accessinginternationalmarkets/tradefairsandexibitions.htmlhttps://www.ukti.gov.uk/uktihome/register.htmlhttp://www.offshore-europe.co.uk/mailto:[email protected]://www.all-energy.co.uk/


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N e x t s t e p s -H o w U KTI c an h e l p

British companies wishing to develop theirbusiness in the Angolan market are advised toundertake as much market research andplanning as possible in the UK. UKTIs team in

A n g o l a , with its wide local knowledge andexperience, can provide a range of services toBritish-based companies wishing to grow theirbusiness in global markets.

This can include: Provision of market information Validated lists of agents/distributors Key market players or potential

customers in the Angolan market Establishment of interest of such

contacts in working with you

Arranging appointments Organise seminars or other events for

you to meet contacts and promote yourcompany in the Angolan market

This work is available via our Overseas MarketIntroduction Service (OMIS) a chargeableservice which assists British-based companieswishing to enter or expand their business inoverseas markets.

To find out more about commissioning thiswork, or accessing other UKTI services andspecialist advice, please visit the UKTI websiteto find contact details for your local UKTIoffice.

Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & CommonwealthOffice), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility acceptedas to the standing of any individual, firm, company or other organisation mentioned.Published 2 0 11 by UK Trade & Investment.Crown Copyright

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Oil & Gas Opportunities in Angola