Angola
Last Updated: March 2008
Angola is the third largest oil producer in Africa behind Nigeria and Libya and is expected to have significant oil production increases in the short-term as new offshore projects come online. On January 1, 2007, Angola became the 12th member of the Organization of Petroleum Exporting Countries (OPEC) and in December of that year, received an oil production quota of 1.9 million barrels per day (bbl/d) effective January 1, 2008.
Angola is still rebuilding infrastructure destroyed during the country’s 27-year civil war that came to an end in 2002. Although the country is beginning to see growth and stability, challenges persist—around 70% of the population still lives on less than US$1/day; the World Bank ranks Angola as one of the most difficult places in the world to do business as a result of cronyism and bureaucracy; and there are persistent allegations of corruption and lack of transparency in public finance.
In recent years, China has agreed to provide multi-billion dollar oil-backed loans to fund infrastructure development. These loans are costly and repayment depends heavily on international oil prices. But at the same time, Chinese support has placed Angola in a position where it could break ties with the International Monetary Fund (IMF) over economic support programs that require, among other things, governance and transparency. Nonetheless, the country is experiencing high levels of foreign direct investment (FDI), particularly in the oil sector.
According to the Oil and Gas Journal (OGJ), Angola had proven oil reserves of 9.0 billion barrels (bbl) as of January 2008—up from 8.0 billion in 2007. The majority of the reserves are located in Angola’s offshore blocks, in part because onshore exploration was limited as a result of the civil war. However, there are some proven reserves onshore near the city of Soyo and, more notably, in the disputed Cabinda enclave.
Angola’s crude oil production has grown considerably over the past decade. In 1997, crude oil production averaged 710,000 barrels per day (bbl/d). Production for 2007 averaged almost 1.7 million bbl/d and capacity is expected to reach more than 2 million bbl/d in 2008, as new deep-water production sites come online.
Exports
Angola exports more than 90% of its crude oil primarily to China and the US. In 2007, the United States imported approximately 496,000 bbl/d of crude oil from Angola (507,000 total oil imports), making it the sixth largest supplier of crude oil to the United States after Nigeria. For most of 2007, Angola was the second largest exporter of crude oil to China after Saudi Arabia—occasionally surpassing the kingdom. Monthly data indicates that China imported 650,000 bbl/d of Angolan crude in December 2007 (compared to US imports of 440,000 bbl/d for the same month). Other export destinations include Europe and Latin America, mainly Brazil—the fellow lusophone country is increasing political and economic links with Angola, specifically in the oil sector.
US and Chinese Imports of Crude and Products from Select African Countries
January – June 2007 (H1-07)
|
Thousand bbl/d |
US |
China |
|
Nigeria |
1,078 |
19 |
|
Algeria |
721 |
26 |
|
Angola |
582 |
465 |
|
Congo (Brazzaville) |
76 |
99 |
|
Gabon |
76 |
20 |
|
Chad |
69 |
0 |
|
Equatorial Guinea |
57 |
73 |
|
Cameroon |
28 |
0 |
|
Sudan |
0 |
213 |
|
Sources: EIA for US Data; Energy Compass October 2007 for China data |
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Sector Organization
In 1976, the Angolan government created a national oil company (NOC) called the Sociedade Nacional de Combustiveis de Angola (Sonangol). In 1978, Sonangol became the sole concessionaire for oil exploration and production in Angola. Sonangol works with foreign companies through joint ventures (JVs) and production sharing agreements (PSAs), while funding its share of production through oil-backed borrowing. Major international oil companies (IOCs) operating in Angola include BP, Chevron, Eni, Total, ExxonMobil, Devon Energy, Maersk, Occidental, Roc Oil, and Statoil. China’s Sinopec is one of the newer international companies operating in Angola and is proving to be an important player in terms of development aid, oil backed loans and trade.
ProductionOil production in Angola is concentrated in numerous onshore and offshore blocks. The offshore blocks are divided into three bands; (band A) shallow water blocks 0-13; (band B) deepwater blocks 14-30; and (band C) ultra-deepwater blocks 31-40. Additional blocks are now being designated in the ultra-deepwater offshore lower Congo Basin, three of which are being offered in Angola’s current licensing round (see below).
Blocks 15 and Zero have been the most prolific offshore blocks. The majority of Angolan oil is medium to light crude (30 degrees – 40 degrees API) with low-sulfur content (0.12 percent - 0.14 percent).
Despite the expense of developing the deepwater and ultra-deepwater fields, Angolan oil production has grown rapidly over the past decade and will continue to do so in the short-term. Industry analysts (Wood Mackenzie/Petroleum Intelligence Weekly) estimate that at current reserve/production ratios, total production capacity will peak at around 2.5 million bbl/d in 2011, before slipping to 2.4 million bbl/d by 2013.
OnshoreOnshore exploration and production activities have mainly focused around the Cabinda Province and were halted during Angola’s civil war. The Cabinda province is home to separatist movements demanding access to oil revenues and greater participation in oil policy. While the government has appointed members to political positions, and security has improved, clashes still occur between the military and rebels in the area. Some existing wells that were drilled prior to the war and the neighboring Block Zero have proven to be extremely successful (see below). The current licensing round is offering three onshore blocks, Cabinda Centro in the Cabinda Province and two blocks in the onshore Kwanza Basin.
Block ZeroBlock Zero is located offshore Cabinda province and accounted for approximately 370,000 bbl/d of production in 2007. Cabinda Gulf Oil Company (CABGOC), a Chevron subsidiary and operator of Block Zero since 1955, has a 39.2 percent share in the JV. In May 2004, Sonangol and the Angolan government extended CABGOC’s contract, which was set to expire in 2010, to 2030. Other partners include Total and Eni. Block Zero’s largest producing oil fields are Takula (Area A), Numbi (Area A), and Kokongo (Area B).
In 2005, Chevron brought online the Sanha field gas complex and Bomboco oil field. Production from the fields, which includes oil condensate and liquefied petroleum gas (LPG), is estimated to have peaked at a combined total of 100,000 bbl/d in 2007.
Block 14In addition to Block Zero, CABGOC is the operator of deepwater Block 14 with 31 percent interest and is joined by partners Eni, Sonangol, Total and Petrogal. A total of ten discoveries have been made on the block with Kuito being the first in 1997. In January 2000, CABGOC announced full production (80,000 bbl/d) at its Kuito field, but current production levels have declined to an estimated 55,000 bbl/d. The quality of Kuito crude is poor when compared with other Angolan crudes and usually trades at a $5 per barrel discount.
In January 2006, CABGOC brought online the first phase of the Benguela, Belize, Lobito, Tomboco (BBLT) project. Oil production from BBLT is expected to peak at 200,000 bbl/d by 2008.
In June 2006, CABGOC brought online its Tombua/Landana joint development, with production expected to be onstream in 2009 and peak at 100,000 bbl/d by 2010. Additional fields still being evaluated include Gabela, Negage and Lucapa.
Block 15ExxonMobil is operator of Block 15, the largest producing deepwater block in Angola along with partners BP, Eni and StatoilHydro. Block 15 has estimated recoverable hydrocarbon reserves of 4.5 billion bbl, and at peak production, Block 15 is expected to exceed 800,000 bbl/d.
In 2003, ExxonMobil brought online Xikomba field, with estimated recoverable reserves of 100 million bbl. Production from Xikomba is currently 70,000 bbl/d.
In August 2004, the first of the Kizomba developments, four floating, production, storage and offloading (FPSO) facilities were brought online and are estimated to peak at a combined 750,000 bbl/d.
·The Kizomba-A project, which includes the Chocalho and Hungo fields, currently produces 250,000 bbl/d.
·The Kizomba-B project, brought online in 2005 includes the Dikanza and Kissanje fields. Kizomba-B contains an estimated one billion bbl of recoverable oil reserves and currently produces around 250,000 bbl/d.
·The Kizomba-C project, currently under development, will produce oil from the Batuque, Mondo and Saxi fields. Production at the Mondo field came onstream in January of 2008 and the other Kizomba C fields are expected onstream in mid-to-late 2008 with a combined peak of 200,000 bbl/d.
·The Kizomba-D fields are expected onstream after 2011 with a peak production capacity of 120,000 bbl/d. There is potential for added production from surrounding satellite fields expected onstream after 2010 that could produce an additional 125,000 bbl/d.
Block 17Total operates Block 17 with a 40 percent share, while Sonangol is its franchise holder. Other shareholders include ExxonMobil, BP, Statoil and Norsk Hydro.
In December 2001, Total brought online the Girassol oil field, an FPSO with a production capacity of 250,000 bbl/d. In 2003, the Jasmin satellite of Girassol came online and is helping to maintain current Girassol production levels. A second satellite, Rosa, came onstream in 2007 and will also help maintain production at Girassol.
In December 2006, Total brought online the 225,000 bbl/d Dalia field. Development of Dalia included a FPSO with a 240,000 bbl/d processing capacity and a 2-million-barrel storage capacity. Dalia’s recoverable reserves are estimated at 1 billion barrels.
Future projects on Block 17 include Pazflor, which will produce an estimated 200,000 bbl/d starting in 2010, and Clov, which will produce 150,000 bbl/d starting in 2011. By 2012, Total expects average production on Block 17 to be 850,000 bbl/d.
Block 18The Greater Plutonio field (BP operated) came online in 2007 at 100,000 bbl/d and is expected to reach peak production of 200,000 bbl/d by 2008. The field consists of six fields: Platina, Plutonio, Galio, Paladio, Cromio and Cobalto.
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Angola’s Upcoming Oil Projects |
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|
Project |
Location |
Operator |
Peak Production (estimate) |
Expected Start-up |
|
Tombua Landana |
Block 14 |
Chevron (CABGOC) |
130,000 |
2009 |
|
Negage |
Block 14 |
Chevron |
75,000 |
2009 |
|
Pazflor |
Block 17 |
Total |
200,000 bbl/d |
2010 |
|
Block 31 project |
Block 31 NE |
BP |
130,000 bbl/d |
2011+ |
|
Block 31 project |
Block 31 SE |
BP |
130,000 bbl/d |
2011+ |
|
Block 18 |
Block 18W |
BP |
100,000 bbl/d |
2011+ |
|
Kizomba D |
Block 15 |
Exxon |
120,000 |
2011+ |
|
Clov |
Block 17 |
Total |
150,000 bbl/d |
2011-planned |
|
Block 32 project |
Block 32 |
Total |
130,000 bbl/d |
2011-planned |
|
Sources: Afroil, BP, International Oil Daily, Petroleum Intelligence Weekly, Reuters, Total, Upstream , Petroleum Economist |
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Exploration
Licensing Rounds
Success in offshore discoveries in Angola has led to increased interest in Angola’s exploration blocks. In August, 2007 Sonangol announced a new licensing round with 10 blocks on offer described below (click here to view Sonangol’s concession map):
Cabinda Central: located in the onshore Congo Basin. This block has been unexplored since the beginning of the civil war. According to the Petroleum Economist there is some uncertainty surrounding this block as it is licensed to a Devon Energy group but the license was frozen in force majeure until security improved. This block is adjacent to Chevron’s offshore Block Zero.
Kwanza Blocks 11 and 12: These blocks are located onshore in the Kwanza Basin South of Luanda.
Block 9: Located offshore in the Benguela Basin covering both shallow and deep waters.
Blocks 19, 20 and 21 are located in the deepwater Kwanza Basin.
Blocks 46, 47 and 48 are ultra-deepwater blocks, sometimes referred to as ultra-ultra-deep, reaching depths of approximately 8,200 feet (2,500 meters). Block 46 overlaps waters that are being contested by Congo-Brazzaville.
Refining and DownstreamDomestic oil consumption in 2007 was approximately 60,000 bbl/d. There is one refinery in Luanda, Fina Petroleos de Angola –a JV between Sonangol, Total and private investors. The refinery has a crude oil processing capacity of 39,000 bbl/d and produces some of Angola’s domestic product requirements. The remaining demand is met by imports of gasoline, jet fuel, kerosene, distillate fuel oil, LPG and other products.
Angola is developing plans for a new 200,000 bbl/d refinery, SonaRef, in the coastal city of Lobito. The $3.5 billion project was initially to be built in partnership with Sinopec but the Chinese company withdrew as a result of disagreements regarding the market for products—Sinopec wanted to supply China while Sonangol wants to sell the products domestically and to African markets. Sonangol is now proceeding with the SonaRef project and is expecting to begin construction in 2008 with refining to start by 2012. The new refinery will be able to process heavy crudes, such as those found in the Kuito and Dalia fields. Since the cessation of armed hostilities in 2002, the domestic demand for oil products is rising.
According to the Oil and Gas Journal (OGJ), Angola has 9.5 trillion cubic feet (Tcf) of natural gas reserves as of January 1, 2008—a significant increase from the 2007 estimated reserves of 2 Tcf.
According to EIA statistics, in 2005, Angola’s gross natural gas production was approximately 300 billion cubic feet (Bcf). Of this, 224 Bcf (75%) was vented or flared, 42 Bcf (14%) was re-injected to aid in oil recovery and 34 Bcf (11%) was marketed. From the marketed share, 5 Bcf was processed into liquefied petroleum gas (LPG) and the remaining 28 bcf was for domestic consumption.
With the considerable increases in proved natural gas reserves and government policies to end natural gas flaring, plans are underway to convert much of the natural gas into LNG for export with some to be used for domestic electricity production.
Chevron and Sonangol together with other shareholders including Total, BP and Eni are planning to build a five-million-ton LNG plant, which could be operational in 2010, when the zero gas flaring policies take effect. ExxonMobil had transferred its share in the Angola LNG project to Sonangol, temporarily giving the NOC and Chevron equal share holdings of 36.4%. However, in April of 2007, Sonangol signed an MoU with Eni to give them a 13.6% share.
Source: Total Corporate Website
The natural gas is expected to come from several offshore fields including Total’s Block 17, BP’s block 18 and Chevron’s blocks Zero and 14. According to Eni the project will produce a total of 128 million metric tons of LNG, 104 million barrels of condensate and 257 million barrels of LPG over a 28 year period. The LNG facility is expected to receive 1 billion cubic feet per day of natural gas and produce over 4 million tons per year of LNG for export plus up to 125 million cubic feet for domestic needs. The LNG is to be directed to the US market, currently intended for the regasification plant at Pascagoula on the US Gulf Coast.
As of 2005, Angola had 0.8 gigawatts (GW) of installed electric generating capacity. Angola generated 2.6 billion kilowatthours (Bkwh) in 2005, while consuming 1.7 Bkwh. Approximately 67 percent of generated electricity comes from hydroelectric plants and the remaining 33 percent from conventional thermal sources such as diesel generators. Less than 20 percent of Angola’s population has access to electric power, and blackouts occur frequently. The sector suffers from war-torn infrastructure that will continue to be a challenge to national reconstruction and development in the near future. Domestic heating and cooking needs are generally met through biomass in the form of fuel wood and charcoal.
Sector OrganizationThe electricity sector is operated by the state utility, Empresa Nacional de Electricidade (ENE). Three separate electrical systems are used to supply electricity throughout Angola. The Northern System supplies the provinces of Luanda, Bengo, Kuanza-Norte, Malange and Kuanza-Sul. The Central System provides for the provinces of Benguela, Huambo and parts of Bie. The Southern System supplies to Huila and Namibe provinces. The government aims to link the systems there to create a national grid through the South Africa Power Pool (SAPP). Industry experts have suggested that Angola needs to ease state controls on electricity prices and offer incentives to attract private investment.
HydroelectricityHydroelectric facilities generate around two-thirds of Angola’s electricity. The Matala dam, which began operations in 2001 on the Cunene River, is the main source of electricity in southwest Angola. The Cambambe dam (180 MW) on the Kwanza River, the Mabubas dam (17.8 MW) on the Dande River, and diesel generators are the main sources of electricity in northern Angola. In northeastern Angola, Russian-based Alrosa Vneshtroy LDA is building the Chicapa hydroelectric dam (16 MW capacity) on the Tchicapa River, which is due to begin operations in March 2008.
Odebrecht, a Brazilian construction company, has partially completed the construction of a hydroelectric facility at Capanda on the Kwanza River. Work on the 520-MW plant began in the mid-1980s, but was suspended due to the civil war. The first of four planned hydraulic turbines began generating electricity (260 MW) in January 2004. Russian-based, Technopromexport, installed the second phase (260 MW) in mid-2007. In addition to second phase construction, new transmission lines are being built to carry power generated by the dam. The completed Capanda project will nearly double Angola’s electricity generating capacity.
NuclearThe Angolan Government is planning to utilize national uranium deposits to develop a nuclear energy industry. This potential source of electricity is still in its planning phase. To date, there has been some discussion with the Chinese government regarding training and the construction of a nuclear plant in Angola but no progress has been made.
| Energy Overview | |
| Proven Oil Reserves (January 1, 2008E) | 9.0 billion barrels |
| Oil Production (2007E) | 1.7 million barrels per day (1.4 Mbbl/d 2006E) |
| Oil Consumption (2006E) | 56 thousand barrels per day |
| Crude Oil Refinery Capacity (2007E) | 39 thousand barrels per day |
| Proven Natural Gas Reserves (January 1, 2008E) | 9.5 trillion cubic feet (2007E at 2 tcf) |
| Natural Gas Production (2006E) | 28 billion cubic feet |
| Natural Gas Consumption (2006E) | 28 billion cubic feet |
| Recoverable Coal Reserves | None |
| Coal Production | None |
| Coal Consumption | None |
| Electricity Installed Capacity (2005) | 0.8 gigawatts |
| Electricity Production (2005) | 2.6 billion kilowatt hours |
| Electricity Consumption (2005) | 2.2 billion kilowatt hours |
| Total Energy Consumption (2005) | 0.15 quadrillion Btus*, of which Oil (69%), Natural Gas (20%), Hydroelectricity (11%), Coal (0%), Nuclear (0%), Other Renewables (0%) |
| Total Per Capita Energy Consumption (2005) | 12.8 million Btus |
| Energy Intensity (2005) | 3,675 Btu per $2000-PPP** |
| Environmental Overview | |
| Energy-Related Carbon Dioxide Emissions (2005) | 20.39 million metric tons |
| Per-Capita, Energy-Related Carbon Dioxide Emissions (2005) | 1.74 metric tons |
| Carbon Dioxide Intensity (2005) | 0.7 Metric tons per thousand $2000-PPP** |
| Oil and Gas Industry | |
| Organization | State-owned Sociedede Nacional de Combustiveis de Angola (Sonangol) oversees offshore and onshore oil operations in Angola |
| Major Oil/Gas Ports | Luanda, Malango (Cabinda), Palanca, Quinfuquena |
| Major Refinery | Fina Petroleos De Angola – Luanda |
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* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data. **GDP figures from OECD estimates based on purchasing power parity (PPP) exchange rates. |
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EIA - Country Information on Angola
U.S. Government
CIA World Factbook - Angola
U.S. Agency for International Development: Angola
U.S.-Angola Chamber of Commerce
U.S. Geological Survey - Africa and Middle East Mineral Information: Angola
U.S. State Department's Consular Information on Angola
U.S. State Department 2006 Human Rights Report: Angola
U.S. Trade with Angola
General Information
All Africa News Service: Angola
Common Market for Eastern and Southern Africa (COMESA)
Human Rights Watch Country Report Angola
International Energy Agency (IEA): Key Energy Indicators for Angola
MBendi Information Service - Angola's oil and gas industry
Stanford University African Studies: Angola
Strategic Road: Angola
University of Pennsylvania African Studies: Angola
Washington Post World Reference: Angola
Associations and Institutions
African Development Bank: Angola
African Union (formerly Organization of African Unity)
Development Bank of Southern Africa
International Monetary Fund (IMF): Angola
National Bank of Angola
SADC Central Banks Website
Southern African Development Community (SADC)
World Bank: Angola
National Links
Official Angola Website
Sonangol (National Oil Company)
Africa Energy Intelligence
Africa Energy and Mining
Africa News
Africa Oil and Gas Monitor ( Afroil )
Agence France Presse
AllAfrica.com
Angop
AP Worldstream
Business Monitor International
Central Intelligence Agency Country Reports
Economist Intelligence Unit (EIU) Viewswire
Energy Compass
Energy Intelligence Group, Inc.
Factiva, Inc.
GEPS Reports
Global Insight
Global Witness
Human Rights Watch
International Crisis Group
International Oil Daily
International Monetary Fund Country Reports
International Petroleum Finance
Oil and Gas Journal
Oil Voice
Petroleum Economist Limited
Petroleum Intelligence Weekly
Petronas
Platts Oilgram News
Reuters News Corporation
Sonangol
United Nations Integrated Regional Information Networks - OCHA IRIN
Upstream
U.S. Department of State Country Briefings
World Markets Analysis
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