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Angola is one of Africa’s top hydrocarbon producers with 8.2 billion barrels of proven oil reserves and an estimated 13.5 trillion cubic feet (tcf) of natural gas reserves. However, production in Angola is on the decline, with the country’s oil volumes decreasing from 1.7 million barrels per day (bpd) in 2015 to just short of 1.2 million bpd in 2021. With production expected to decline even further to 1.1 million bpd in 2022, the government has implemented various measures and policy reforms aimed at increasing exploration and getting production back on track.

Increasing exploration activities and ramping up production at deep-water projects is critical for Angola to increase its production capacity. To achieve this, the Angolan government has adopted a strategy that will optimize the country’s focus on deep-water projects while expanding the participation of start-ups and international majors.

As part of the strategy, the government, through the National Agency of Petroleum, Gas and Biofuels (ANPG), introduced a six-year licensing round in 2019 which covers ten blocks.

The licensing round includes Blocks 11, 12, 13, 27, 28, 29, 41, 42 and 43 in the Namibe Basin, and Block 10 in the Benguela Basin. The licensing round will enable Angola to map its oil and gas reserves and attract investment for infrastructure development as well as the production and monetization of oil and gas discoveries.

Meanwhile, in February 2022, the Angolan government approved the ANPG to handle oil and gas exploration and production activities in the concession area of block 24, which is an historically bp and ExxonMobil operated block. The main aim behind the approval is, in collaboration with international investors, to make exploration in the block increasingly viable and profitable.

The concession follows ANPG launching a permanent offer program in Q3 of 2021 that paves the way for the regulator to negotiate with block operators for new contracts without the need to launch a new bidding round. ANPG is clear that the framework would reduce the time incurred to offset production and would not only assist Angola in avoiding a decline in production but actually enhance production and supply.

Moreover, in early December 2021, TotalEnergies and ANPG announced that they have started production at the CLOV Floating Production, Storage and Offloading unit as part of phase two of the project to ensure secure oil and gas supply. The unit, in Block 17, which is operated by Equinor, ExxonMobil, bp and Sonangal, will produce 40,000 bpd by mid-2022 and has an estimated capacity of 55 million barrels of oil reserves.

Furthermore, the government’s strategy to expand exploration got a boost with Eni kickstarting production at the Ndungu Early Production project at Block 15/6 offshore Angola in late February 2022. The project is expected to produce 20,000 bpd. Eni is confident that it will expand exploration activities within the block in the second half of 2022.

The Angolan government has also approved fees for the issuing of licenses and assessment of environmental impact feasibility studies. Additionally, the government has also halved royalties as well as income tax for “marginal” discoveries, therefore, ensuring tax incentives to increase participation. These policy reforms have seen supermajors such as bp, Eni and TotalEnergies committing to invest in and develop a number of deep-water projects.

To improve its workforce within the upstream sector, the Angolan government has also kickstarted training programmes facilitated by Eni in which approximately 100 technicians are being equipped with relevant skills.

To enhance exploration and production as well as gas exports, the Angolan government has also partnered with various majors under the New Gas Consortium – an upstream gas partnership in Angola established in 2019. The consortium now includes majors Eni, bp, Chevron, TotalEnergies and Sonangal.

Owing to improved policies and governance, Angola has managed to expand its oil exports in 2021 despite the challenges of the country’s oil market and the adverse effects of the COVID-19 pandemic. Up to 394 million barrels of crude oil was exported in 2021, bringing in US$27.87 billion in revenue and representing an 11.69 % increase in exports, compared to the previous year.