This week, Angola’s energy sector saw several key developments: estimated recoverable reserves were increased to 57 billion barrels; the Hydrocarbon Exploration Strategy 2020-2025 was approved by Presidential Decree; and the National Agency of Petroleum, Gas and Biofuels (ANPG) announced that the Strategy will replace declining reserves within two years. Furthermore, the Angolan Government continues to position industrialization and gas-based power generation initiatives as the solution to mitigating the economic impact of COVID-19, and has renewed its focus on cross-border energy cooperation.
Government pushes industrialization projects: The Government of Angola promoted a range of industrialization projects – specifically, gas monetization initiatives, fertilizer production, power generation and three new oil refineries – in a high-level meeting led by the UN Deputy Secretary-General H.E. Amina Mohammed. Attended by Angola’s Secretary of State for Oil and Gas H.E. José Alexandre Barroso, the online roundtable was the first in a series of five to be held in collaboration with regional economic commissions, seeking to address how the extractive resources sector can spur sustainable, diversified development, with a view to African economies.
H.E. Barroso noted that Angola’s newly revised local content regime along with the utilization of domestic raw materials – in a bid to reduce imports and increase local production of goods and services – would be key to minimizing the effect of COVID-19 on the extractive sector. Angola forecasts a 25% increase in energy consumption to a capacity requirement of 7.2 GW by 2025. Angola’s downstream initiatives aim to meet growing industrial power demand while exporting surplus power to neighboring countries in the region.
Reserves estimated at 57 billion barrels: According to the recent evaluation of new oil and gas prospects – and announced via Presidential Decree 282/20 – Angola is estimated to hold up to 57 billion barrels of oil and 27 trillion cubic feet of gas, a substantial increase from previous estimates of 8.2 billion barrels and 13.5 trillion cubic feet. The decree also approved Angola’s recent Hydrocarbon Exploration Strategy 2020-2025, which plans to mobilize $867 million in upstream investment,of which $679 million will be directed to the acquisition of multi-client geophysical data and $188 million for additional studies.
Approved by the Council of Ministers in August, the strategy centers on heightening research and evaluation activities in sedimentary basins, expanding geological knowledge of new and existing hydrocarbon reserves, and successfully allocating oil concessions in line with Presidential Decree 51/29, with the National Concessionaire to define the specific strategy for bidding.
Revised strategy to replace reserves in two years: According to the ANPG, the Hydrocarbon Exploration Strategy 2020-2025 will replace existing reserves within the next two years. The National Concessionaire is prioritizing immediate efforts to stop the ongoing production decline in the wake of market volatility, and will further revise its strategy post-2025.
The short-term impact on national production will be driven by development of assets located nearby existing production infrastructure, along with the medium- to long-term development of marginal fields. The ANPG plans to evaluate 33 blocks over the next two years to support the replacement of reserves in the Lower Congo basin, as well as stimulate natural gas exploration and development in the Kwanza basin.
Indian ambassador to Angola reinforces energy cooperation: India’s new ambassador to Angola, Pratibha Parkar, who assumed the position in July, has stated the objective of strengthening cooperation between the two countries. Among the sectors being targeted for increased bilateral trade and investment are oil and gas, health, education, agriculture, mining, IT and telecommunications. Trade between the two countries stands at around four billion dollars, and positive diplomatic relations have been sustained for nearly 35 years.