Angola’s downstream oil and gas sector is rapidly expanding as efforts to reduce reliance on imported petroleum drive new investments into large-scale infrastructure facilities.
From transportation to storage, processing, and distribution, the industry has opened lucrative opportunities for local businesses and entrepreneurs.
A panel discussion during the Angola Oil & Gas (AOG) 2023 Conference & Exhibition in Luanda, organized by Energy Capital & Power, explored such opportunities, with speakers drawing attention to the challenges faced by players and how integrating local players can drive economic growth.
To kickstart the conversation, panel moderator Anibor Kragha, Executive Secretary of the African Refiners & Distributors Association, drew attention to Africa’s downstream infrastructure deficit, citing challenges such as financing, pressure to transition to renewables, and more.
Kragha stated that, “Any project without financing will remain an idea. We need to invest in our regional infrastructure to ensure we can meet demand. Between now and 2030, our focus should be on upgrading our refineries, regional infrastructure, and some renewable investments. As renewable technologies become more mature, we can then increase those investments.”
As one of Africa’s largest oil producers, Angola heavily relies on imported fuel to sustain its economy. Consequently, the focus has shifted towards stimulating development in the downstream industry. The implementation of Presidential Degree 208/19 aimed to incentivize investment in infrastructure while boosting competition and local participation. Four years on, Angola’s downstream sector continues to face some challenges.
According to Kid Carvalho, Board Member of Sonangol Distribution and Commercialization, “One of the challenges companies face is financing. Many companies approach banks for investment but don’t always secure the funding. Another challenge is the deficit of infrastructure. Big projects like refineries are ongoing, but we still have deficits in other infrastructure. In Angola, we typically rely on road transport, which is expensive. Having pipelines would improve transport efficiency.”
Echoing these remarks, Oscar Sequesseque, Chief Commercial Officer at Pumangol Angola, stated that, “We face daily problems associated with the lack of liberalization. Our assets, especially those of Pumangol, encounter different issues related to continuous supply. However, one of the greatest barriers is the realization of liberalization.”
Efforts are being made to address these challenges. Claire Dutertre, Managing Director of TotalEnergies Marketing, explained that the establishment of the IRDP has played an instrumental role in uniting downstream players and supporting the integration of local players into the value chain. She stated that, “There are two key points when discussing local content. The first is the importance of the IRDP and its recent establishment. The IRDP facilitates discussions, licensing, and knowledge about how Angola operates. The weight of the IRDP in terms of Angola’s goals is significant. Secondly, it’s about strategy and the development of new services.”
Representing the IRDP, Deputy General Director Antonio Feijo added to Dutertre’s comments on local content, stating that, “The objective in Angola regarding local content is to involve Angolan companies, integrate locally manufactured equipment, and engage the local workforce in downstream industries.”
He emphasized, “There is no doubt that the capacity building of human capital in Angola will be a determining factor for the development of the downstream segment. Without the participation of local people, we will not have a developed downstream,” highlighting the importance of advancing local content and investment in this industry.
Mauro Carvalho, Co-Managing Partner of Famar – the sponsor of the panel – concluded that, “In terms of professionals for the downstream sector, what we have seen from the players is that we have efficiency. Angola has an advantage in this area. When we look at other countries, we are quite well-served. We have a lot more to share than to learn. We are on the right path. The downstream sector is working hard.
