Policy & Regulation
Background
Angola controls the exclave of Cabinda, located north of the mainland and surrounded by Congo-Brazzaville to the north and the Democratic Republic of the Congo to the south. It was in the shallow waters off Cabinda that oil was first discovered in 1968.
The Angolan exclusive economic zone is divided into 41 blocks which have been offered to international oil companies to develop in partnership with Sonangol. Total, ExxonMobil, BP and Chevron have acquired rights in Angola. Exxon is the largest operator in the oil sector.
There are a number of Asian oil companies active in Angola’s oil sector, including Sinopec and China National Offshore Oil Corp. The Asian firms have not competed for the more complicated deepwater fields, which are dominated by the supermajors.
The discovery of the Girassol field in the deepwater Block 17 launched Angola’s present day oil and gas industry. Blocks 0-13 are in shallow water, blocks 14-30 are in deep water and blocks 31-40 are in ultra-deep water. The blocks producing gas for the Angola LNG facility are some of the most prolific and operated mostly by the supermajors.
Regulation
The oil and gas sector is governed by the Petroleum Activities Law of 2004 and the Law on Taxation of Petroleum Activities 2004.
Since 2004, production sharing contracts (PSCs) have been the norm where Sonangol is the holder of the concession and appoints a contractor to conduct petroleum operations. The contractor provides the funds and bears the risks until commercial production is achieved. Before 2004, concessions or joint ventures were the norm. The joint ventures are between Sonangol and the oil companies, enabling the company to explore predetermined blocks.
The regulators in the oil and gas sector include the Ministry of Petroleum and Sonangol. The ministry regulates and supervises oil and gas operations carried out under various licences and leases. Sonangol holds all the oil concessions and manages and supervises the government’s interest in the industry.
Downstream
Angola has one, ageing refinery built in 1955 with a capacity of 39,000 barrels per day. The Sonaref refinery, based in Lobita, is scheduled to begin operations in 2016 and is expected to have a 120,000 barrel per day capacity, rising to 200,000 b/d. Sonangol has no partner for the refinery following the withdrawal of Sinopec. Angola does not have a large domestic demand for oil, but has to rely on imports of petroleum products for most of its needs. Consumption is growing steadily as transportation fuel is heavily subsidised.
Page updated: 17/07/2014