Angola’s downstream oil and gas sector is rapidly expanding as efforts to reduce the reliance on imported petroleum drive new investment into large-scale infrastructure facilities. From transportation to storage to 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 (https://EnergyCapitalPower.com), explored such opportunities, with speakers drawing attention to the challenges faced by players and how integrating local players can serve to drive economic growth.

Kickstarting the conversation, panel moderator Anibor Kragha, Executive Secretary, African Refiners & Distributors Association, drew attention to Africa’s downstream infrastructure deficit, citing challenges such as financing, pressures to immediately 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 make sure we can deliver on 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, then we can step those investments up.”

As one of Africa’s largest oil producers, Angola relies heavily on imported fuel to sustain its economy, and as such, focus has shifted towards stimulating development across the downstream industry. The implementation of Presidential Degree 208/19 sought 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, Sonangol Distribution and Commercialization, “One of the challenges companies face is finance. Many companies run to the bank for investment but don’t always find capacity to get the funding. Another challenge is deficit of infrastructure. Big projects are ongoing such as refineries but we still have deficits regarding other infrastructure. In Angola we normally use road transport, which is expensive. If we had pipelines, it would improve the efficiency of transport.”

Echoing these remarks, Oscar Sequesseque, Chief Commercial Officer at Pumangol Angola, stated that, “We have problems on a daily basis associated with lack of liberalization. Our assets, in particular those of Pumangol, have different problems when it comes to continuous supply. But one of the greatest barriers is the realization of liberalization.”

However, efforts are being made to address these challenges. Claire Dutertre, Managing Director, TotalEnergies Marketing, explained that the establishment of the IRDP has played an instrumental part in uniting downstream players while supporting the integration of local players into the value chain. She stated that, “There are two key points when we are talking about local content. The first is the importance of the IRDP and establishment of the IRDP, which was not long ago. The IRDP is a facilitator bringing players together and having discussions, facilitating licensing and the knowledge of how Angola is working. The weight of the IRDP in terms of what Angola wants to achieve is important. Secondly is 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 insert Angolan companies, integrate equipment that is manufactured locally and bring the workforce to industries in the downstream sector.”

He added that, “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 the 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, Famar – 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 is working hard.”