The heads of state also discussed the potential for joint strategies in the mining sector – with a specific focus on critical minerals essential to the energy transition – as well as the oil and gas industry. Angola serves as one of sub-Saharan Africa’s top oil producers, while South Africa’s burgeoning sector has yet to reach its full capacity. As such, South Africa stands to learn a lot from its regional neighbor as it seeks to develop its oil and gas resources.

Deepwater Exploration

Angola has solidified its position as a prominent deepwater producer, with key projects like energy major TotalEnergies’ Koambo ultra deepwater project - the first project on ultra-deep offshore Block 32 - and the more recent Kaminho development – the first large deepwater development in the offshore Kwanza Basin. Koambo, launched in 2018, has a production capacity of 230,000 BPD while the Kaminho project achieved $6 billion FID in 2024. In October this year, marine geoscience and technology company Shearwater Geoservices secured a contract from TotalEnergies to conduct a deepwater survey in the country’s Louro and Mostarda fields – part of the Koambo development.

Meanwhile, South Africa’s deepwater potential for oil and gas, while largely untapped, is highly promising. Recent discoveries include Block 11B/12B – situated in the Outeniqua Basin - and Block 3B/4B – situated in the Orange Basin. Block 11B/12B is home to the Brulpadda and Luiperd discoveries – estimated to contain 3.4 TCF of gas – while Block 3B/4B features 4 billion barrels of oil equivalent and up to 24 prospective natural gas plays. Beyond Block 3B/4B, concessions in South Africa’s Orange Basin – which it shares with Namibia – has been shown to have significant potential for oil and gas, with Namibia having made a number of important discoveries there since 2022.

Multi-Year Licensing Round

Much of Angola’s upstream success can be attributed to its strategic licensing structure. The country launched a six-year licensing plan in 2019, seeking to award 50 concessions by 2025. To date, 41 concessions have been awarded with the most recent bid round – concluding in January 2024 – securing 53 bids from companies. Angola is preparing to launch its next limited public tender in Q1 2025, featuring blocks in the offshore Kwanza and Benguela Basins.

South Africa stands to learn a lot from this long-term investment plan and recent policy shifts signal new opportunities for competitive licensing. The country is expected to open offshore acreage to bidders in 2025. This comes as South Africa changed its licensing policy from an open-door system to competitive licensing rounds in 2023. A long-term licensing plan could generate greater interest by foreign E&P firms by strengthening investment competitiveness and attractiveness.

Collaborative Ecosystem

Angola has adopted an integrated approach to its logistics infrastructure that extends beyond resource extraction to include creating opportunities for a diverse range of businesses and entrepreneurs along the oil and gas value chain. Global industry leaders in the country can operate alongside small- and medium-sized enterprises, creating an ecosystem where companies can work together to provide integrated logistics support.

This synergy enhances efficiency and service diversity while providing growth opportunities for local entrepreneurs. For South Africa, this integrated approach can provide valuable lessons and opportunities, whereby it is possible to create an environment conducive to innovation, inclusive economic growth and environmental sustainability.

Strengthening Partnerships with IOCs

Angola has attracted substantial foreign investment from IOCs like TotalEnergies, Chevron and ExxonMobil. In addition to securing $6-billion FID for the Kaminho Development, TotalEnergies is also pursuing a multi-energy strategy in Angola, including the development of the $850 million Begonia project, the Quiluma and Maboqueiro gas projects and renewable developments. Meanwhile, Chevron is set to bring online an additional 300 million standard cubic feet of natural gas per day in Block 0 to feed the Angola LNG project by the end of this year.

South Africa could learn the importance of forging strong, mutually beneficial relationships with IOCs and offering favorable regulatory and fiscal terms to encourage investment in exploration and production. In November this year, TotalEnergies requested environmental authorization to drill up to seven exploration wells, offshore South Africa. While IOCs have long-been present in South Africa, greater collaboration could lead to greater investment.

Investment in Local Content and Skills Development

Angola is spearheading the growth of its domestic service industry within the oil and gas sector through local content regulation. These policies create revenue-generating opportunities for local service firms by strengthening their contribution to the industry. Angola anticipates an investment pipeline of $60 billion over the next five years across its oil and gas sector. With heightened investment and an expanded project portfolio comes newfound contractual opportunities for Angolan service companies.

South Africa is well-positioned to refine and implement more robust local content regulations within the oil and gas sector. By promoting local content through well-defined laws and incentives, South Africa has the potential to boost its economy, create jobs and develop new industries.