The growth and robustness of the Angolan economy in the next decade will largely be based on the increased productivity of public companies.
The profitability and productivity of these companies will be fundamental for the balance of public accounts and will allow the government to effectively manage or even divest the state’s stakes in these companies, creating many investment opportunities for existing and potential players.
Sonangol Drives Multi-Faceted Energy Growth
The cornerstone of Angola’s economic success is Sonangol, the national oil company (NOC), which continues to be essential for ensuring a growing and sustainable economy as oil remains the country’s primary source of revenue. While the country represents one of the biggest producers in Africa, natural declines in legacy fields and lack of investment in exploration will see production fall in coming years. As such, Sonangol’s directors have identified the maintenance of crude oil production and exploration levels in 2023 as strategic projects for the future and is engaging with investors and project developers to spur E&P efforts this year and beyond. These efforts include the introduction of tax incentives; opening of licensing rounds; the implementation of regulatory reforms among others.
On the production front, Sonangol also plays a decisive role in the development of the Angola Liquefied Natural Gas project, promoting regional development and generating new jobs. The project not only monetizes the country’s natural gas reserves, generating revenue and increasing job creation, but ensures consistent energy supplies are brought onto the regional market. Additionally, the construction of the Lobito, Cabinda and Soyo refineries led by Sonangol also represent crucial investments for increasing Angola’s refining capacity and stabilizing supply, ensuring the country’s remains resilient to global supply chain impacts.
Notwithstanding the company’s hydrocarbon efforts, to adapt to the changing times, Sonangol has adopted adequate instruments under its diversification strategy – which would see the NOC transform from a traditional oil company to a modern energy organization – for the period 2022-2030. This involves using hydrocarbons as a source of funding for the transition process through the development of renewable energy systems.
As such, investment in renewable energy represents a pillar of the future Angolan economy and Sonangol has already secured a contract for the acquisition of energy from the Caraculo solar photovoltaic plant and is also participating in the contracting process for the Quilemba solar power project. Additionally, Sonangol signed a letter of intent with two German-based engineering companies for the construction of a green hydrogen and derivatives plant in Angola. The plant would see the country become a major green hydrogen supplier, creating new opportunities for revenue generation, job creation and broader socioeconomic growth.
Mining Drives Diversification
Meanwhile, the increase in diamond production and the start of new mining prospecting projects provide further investment opportunities in Angola while enabling the diversification and resilience of the economy. Led by Endiama, the national diamond mining company of Angola, who serves as the operator and exclusive concessionaire in the management of the value chain of the diamond sector, the modernization of mining infrastructure and resurgence in exploration represent essential drivers for Angola’s growth. Towards heightened investment in this sector, the country has created the Diamond Exchange in Angola, set to open later this year, which is fundamental for reinforcing transparency and credibility in the diamond sector for the growth of the Angolan economy.
All this and more will be further unpacked during this year’s edition of the Angola Oil & Gas conference and exhibition. Covering the entire energy sector and its value chain, as well as other promising industries including mining, infrastructure and maritime logistics, the conference will drive new investment and development in pursuit of creating a strong and resilient Angolan economy.