Angola, Southern Africa's only significant oil producer, produced an average of 1.25 million barrels per day (bbl/d) of oil in 2005 (see Table 3 ). According to Oil and Gas Journal (OGJ), Angola has proven crude reserves of 5.4 billion barrels, which constitute 96 percent of the region's total estimated proven crude reserves. Smaller proven reserves are found offshore DRC and South Africa. The region's refineries are concentrated in South Africa, with additional refining capacity located in Angola, Madagascar, Tanzania and Zambia. South Africa is the region's largest oil consumer (over 68 percent of the region's total), and the second largest oil consumer in Africa after Egypt.

Crude oil production in Angola has quadrupled over the past twenty years. One of the largest production areas is Block Zero, located offshore of the Cabinda province. In 2005, Chevron began production at its Sanha natural gas complex and Bomboco oil field, both of which are located in Block Zero. Chevron is also working to bring its Benguela, Belize, Lobito, and Tomboco fields on Block 14 onstream in 2007. ExxonMobil operates the $3.4 billion Kizomba A field (located in Block 15), which began production in August 2004. Kizomba A is targeted to have peak production of 250,000 bbl/d. First oil from the Kizomba B field came online in July 2005, while the Kizomba C field could begin production as early as 2007. In offshore Block 17, oil is produced from the Girassol and Jasmin fields. A third field, Dalia, with expected output of close to 200,000 bbl/d, will likely begin production in late 2006. BP is planning to bring first oil online from the Greater Plutonio project on Block 18 in 2007. In 2005, BP, in partnership with ExxonMobil, Statoil, and Marathon Oil, announced a total of five new oil discoveries on Block 31, which brings the total of discovered wells on the block to nine. For more information on the oil sector in Angola, please see the Angola Country Analysis Brief .

South Africa's oil production meets 10 percent of its domestic needs. The South African national oil company, PetroSA has concentrated its exploration efforts on the country’s western and southern coasts. Several discoveries have been made in the Bredasdorp Basin on Block 9, including the Oribi, Oryx and Sable fields. Combined, the Oribi and Oryx fields produce 16,000 bbl/d of oil; however, PetroSA has indicated that both fields are in decline. Production at the Sable Field, located approximately 60 miles off the southern coast, commenced in August 2003. The project is a partnership between PetroSA and Pioneer and includes six subsea wells connected to a floating, production, storage and offloading vessel (FPSO) with the capacity to process 60,000 bbl/d of oil. Current production at Sable is around 23,000 bbl/d of oil. For more information on the oil sector in South Africa, please see the South Africa Country Analysis Brief .

In DRC, Perenco operates six onshore fields, with an output of approximately 20,000 barrels per day. Perenco is also the operator of DRC's offshore concession and terminal - assets it acquired from Chevron in 2004. In 2004, DRC's national oil company, Société Nationale des Petroles du Congo (SNPC), was reorganized to become a holding company with seven subsidiaries.

In April 2006, Madagascar opened up 96 new offshore oil and natural gas blocks for tender. The government will accept bids from interested parties until November 17, 2006. The licensing round is overseen by the Office des Mines Nationales et des Industries Strategiques (OMNIS) and TGS-Nopec, which completed seismic data on the blocks. In 2005, U.K.-based Sterling Energy sold 70 percent of offshore Ambilobe and Ampasindava licenses to ExxonMobil. ExxonMobil plans to finance exploration work on the licenses. Additional international oil and natural gas companies active in Madagascar include Norsk Hydro (Norway), Vanco (U.S.), Vuna Resources (China) and Sun-Pec (China).

In August 2005, BHP Billiton (Australian), Hunt Oil (U.S.), and Neptune Petroleum (U.K.) signed memoranda of understanding (MoUs) with Namibia’s Ministry for Mines and Energy. The MoUs allow the companies exploration rights for two years, with the option to renew the licenses at the end of that period. In March 2005, EnerGulf Resources (Canada) signed an MoU with the National Petroleum Corporation of Namibia (Namcor) to jointly explore and develop offshore Block 1171, which is located along the maritime border with Angola.

In May 2005, the Tanzania Petroleum Development Corporation (TPDC) offered Ophir Energy ( Austria ) , Statoil ( Norway ) and Petrobras ( Brazil ) production sharing agreements (PSAs). In October 2005, Ophir Energy signed the PSA for Block One, while Statoil and Petrobras are still negotiating contracts for their PSAs. In 2004, TPDC signed with Petrobras for deepwater Block Five, off Mafia Island and with Maurel & Prom (France) for acreage along the coast. Shell has yet to finalize an agreement for Blocks 9 - 12 near Zanzibar and Pemba Islands, which it won over two years ago.

In February 2005, Mozambique launched its second offshore licensing round for blocks in the northern Rovuma basin. In June 2005, the Mozambican Empresa Nacional de Hidrocarbonetos (ENH) and the South African petrochemical company Sasol signed an agreement with the Mozambican government for Blocks 16 and 19 off the southern coast of Mozambique. Seismic studies and exploratory drilling on the blocks are expected to cost $7 million. In May 2006, the Mozambican government awarded Norsk Hydro two concessions in the Rovuma basin and companies Eni, Petrobras and Petronas are seeking concessions in the basin as well.

Southern Africa's petroleum refining capacity is concentrated in South Africa, where four refineries have a combined 504,547 bbl/d distillation capacity. Other Southern African refineries are in Angola (Luanda, 39,000 bbl/d); Madagascar (Toamasina, 15,000 bbl/d); Tanzania (Dar es Salaam, 14,900 bbl/d) and Zambia (Ndola, 23,750 bbl/d).

In accordance with Black Economic Empowerment (BEE) policy, in which, black people have ownership in new and existing business, Shell is expected to sell a 25 percent stake in the South African Sapref refinery to a black-owned partner. In addition to Shell and BP, multinationals Caltex (Chevron), Engen, and Total are major participants in South Africa’s downstream petroleum markets. Several domestic firms are also involved, including black-owned firms Naledi Petroleum and Afric Oil. Worldwide Africa Investment Holdings (WAIH) owns 55 percent of Afric Oil, 51 percent of South African Zenex, and 20 percent of Engen.

In addition to the Luanda refinery, Angola is developing plans for a new 200,000-bbl/d refinery in the coastal city of Lobito. An estimated 50 percent of the products produced at the new refinery would be consumed domestically; the remaining 50 percent would be for export. Various firms have expressed interest in partnering with Sonangol in building the refinery, especially after Sonangol linked building the refinery to having upstream ownership in Blocks 15, 17 and 18. Sonangol hopes to have the refinery operational by 2009.

Zambia's Indeni refinery is currently operating at 80 percent capacity after having been closed due to mechanical problems. Over the next three years, a total of $65 million will go towards refinery upgrades of Indeni. In August 2006, Indeni is slated to undergo the first phase of refinery upgrades, which will cost $24 million. Meanwhile, Zambia will be forced to import refined fuel from South Africa, Tanzania and Mozambique to supply the country’s economically vital copper and cobalt mines and transport sector. Indeni is jointly owned by the Zambian government and Total.

In 2005, petroleum consumption in Southern Africa averaged 727,000 bbl/d. The vast majority of petroleum consumed in the region is imported; Angola and DRC are the only net exporters. Several countries in the region -- particularly Zimbabwe -- have experienced periodic, sometimes severe, petroleum shortages. However, in May 2006, Equatorial Guinea agreed to supply Zimbabwe with oil, which should ameliorate the country’s struggling economy.

All of Botswana's refined oil needs are supplied by South Africa, except for a small supply to the western part of the country by Namibia. Namibia acquires 90 percent of its petroleum requirements from South Africa. Sasol was awarded a tender in September 2004 to supply Namibia for three years. Most of Malawi's fuel imports are supplied via Tanzanian and South African ports, although additional sources of imports, via a pipeline from Mozambique, are also being developed.

The Comoros, Seychelles and Mauritius import most of their fuel energy requirements. The Indian Oil Corporation operates an 18,000-ton storage terminal on Mauritius and is planning to expand its presence there.

The 1,069-mile Tazama Pipeline transports crude from Dar es Salaam, Tanzania to Zambia's Indeni refinery. The pipeline, jointly owned by the governments of Zambia (67 percent) and Tanzania (33 percent), has a capacity of 22,000 bbl/d. In October 2004, the Zambian government decided not to privatize the Tazama Pipeline due to the facility's strategic importance to the national economy. Serious problems facing the Tazama Pipeline include vandalism and the deterioration of pumping equipment.

The Mozambique-Zimbabwe Petrozim Petroleum Products Pipeline runs from the port of Beira in Mozambique through Feruka, Zimbabwe to Msasa, located near Harare. Zimbabwe imports 80 percent of its petroleum through the pipeline. Zimbabwe's Noczim is planning to construct an additional oil-product pipeline from Beira to Msasa to help meet Zimbabwe's oil demand.