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03 Oct 2024

Investors Outline Success Strategies for Doing Business in Angola

Investors Outline Success Strategies for Doing Business in Angola
Over 30 concessions have been awarded by Angola’s National Agency of Oil, Gas & Biofuels (ANPG) and response time for investors has been reduced to 30 days, according to remarks made during the Angola Oil & Gas conference in Luanda on Thursday.

Sponsored by Angolan integrated energy company etu energias, a panel explored investment perspectives and strategies for doing business in Angola, with a focus on reforms introduced by the ANPG since its establishment in 2019. These reforms – aimed at addressing sector challenges, enhancing transparency and boosting competitiveness – have led to the award of over 30 concessions, thanks to new incentives for exploration and marginal field development, as well as a significant reduction in the ANPG’s response time to investors. 

“The world competition for access to capital has been increasing – the volumes of available capital have been reduced, especially for fossil fuel energies. One of the greatest incentives we can give investors is being fast in our response time. Before the ANPG was established, the concessionaire took four months to respond to investors – today, we respond in 30 days or less,” said Alcides Andrade, Executive Administrator, ANPG.

In the banking sector, these reforms have been felt by lending institutions like RMB. The South Africa-based corporate and investment bank has increased its exposure across the continent in the last five years – including co-funding the $4.9-billion Coral Sul floating LNG development in Mozambique – and is looking to grow its participation in financing both Angola’s mature assets and gas sector growth. 

“[ANPG reforms] are a differentiator across the continent. Time does matter,” said Elizabeth Williamson, RMB’s Head of Energy Corporate Finance. “For the last 10 years, the banks that are co-lending with us have changed dramatically – about 50% have disappeared and 50% are lending in much smaller quantities, usually supporting legacy clients. In Angola, there is a big opportunity to drive lending to later-life assets. We also want to be a part of the growth of the LNG story, which is pivotal for southern Africa.”

According to Paul Eardley-Taylor, Head of Oil & Gas Coverage Southern Africa for Standard Bank, Angola’s gas expansion could be a key driver of domestic project finance capabilities and a local syndicated loan market, which the country has lacked to date.

“As Angola’s gas master plan evolves, more money has to flow onshore from domestic parties.  As the energy sector evolves, we hope that Angola’s banking and capital markets deepen with it,” stated Eardley-Taylor, adding, “Angola has already been drilled – the gas has been largely reinjected. Assuming adequate reservoir management, it’s about how to get the gas out of the ground and turn it into revenue. It’s not ‘drill, baby, drill,’ but ‘produce, baby, produce.’”

Although Angola's reforms have primarily targeted the oil and gas sector, as the country's main GDP contributor, panelists underscored the need for reform to be extended to other sectors to promote economic diversification, boost local content and create opportunities for local businesses.

“All of these government policies should maintain and grow production, but also grow other sectors,” said Carlos Basto, Managing Partner of EY Angola. “The will is there, but there are still issues related to fiscal policies – those that have been applied to the oil and gas sector need to be transferred to other sectors. It’s important to have transparency and stability… as well as align with best investment practices globally.”

“Local content plays an important role,” said Francisco Monteiro, Chairman and CEO of Angolan services company Brimont. “We have to know our capacities, identify the market, know where we can aggregate value and occupy those spaces.”

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