This page contains a Flash digital edition of a book.

ngola is the second-largest oil producer in sub-Saharan Africa. Crude production rose from 800,000 barrels per day (bpd) in 2003 to almost 2 million bpd in 2008. But output has been stagnant since 2009, when it dropped to 1.8 million bpd. Analysts generally believe national oil company (NOC) Sonangol’s prediction that exports will reach 2 million bpd by the end of 2015 are unrealistic. And even though oil firms are optimistic about largely untapped deepwater blocks, any finds will take a few years to come on stream. In recent years oil has accounted

for most of the nation’s GDP and between 90-95% of exports. The economy expanded at more than 10% annually in real terms, making it one of the fastest growing in the world. Much of the oil income was funnelled into national reconstruc- tion projects aimed at improving war-shattered infrastructure in the hope of transforming Luanda, the

country’s capital, into an African Dubai that would attract thousands of expatriates. However, this dependence has

made it one of the hardest-hit victims of the crash in oil prices. Recent increases in output are not enough to compensate for the loss of income from low prices. So far the government has managed the downturn, trimming its national budget for 2015 by one quarter. But dissatisfaction among the population is growing, particularly among those who did not benefit from the oil dollars even in the good times. Meanwhile, thousands of local staff are being laid off as oil-sector giants, including France’s Total, Spain’s Repsol and services firm Schlumberger, cut costs.

Economic growth

Angola is second only to Nigeria with regard to oil production in sub-Saharan Africa. The nation, which made its first commercial offshore discovery in 1966, was ravaged by civil war between 1975 and 2002, but has since enjoyed increasing stability and a steady rise in hydrocarbon production. That should be bolstered further

by the exploration of a pre-salt area that is geologically similar to Brazil’s much-vaunted Libra region. In this context, much is expected from the 11 pre-salt block licences that were awarded at the end of 2011. The Ministry of Petroleum (MoP)

is responsible for the regulation of all oil activities in Angola and for the implementation of local content requirements. Sonangol is the sole concessionaire of rights to all exploration and production activities, meaning international and foreign companies must undertake joint venture operations and production-sharing agree- ments (PSAs) with the NOC. The MoP’s regulatory tasks

include overseeing petroleum operations and the development of oil service companies, whereas operators are, for the most part, left to self-regulate their individual health, safety and environmental (HSE) standards and procedures. In the 2004 Petroleum Law there was a move to standardise future PSAs and further clarify the roles between the MoP, Sonangol and the operating companies. However, Sonangol’s role was broadly unchanged. As a result of the nation’s long

history of offshore oil production, Angola has mature fields with ageing assets. Officially, the country has a good safety track record, but questions have been raised relating to public access to possible incidents. The latest offshore accident was the sinking of the Perro Negro 6 in 2013 after the seabed collapsed under one of the rig’s legs. New production is anticipated to derive increasingly from fields in

deeper water, with the first ultra-deepwater subsea develop- ment expected to come on stream in 2017-18. As a result, Angola is not only faced with issues related to its ageing assets, but also the higher risk associated with the complex challenges of deep and ultra-deep subsea developments. The government sees the logic

behind a stable and transparent regulatory regime that will mitigate the risk of major accidents and also encourage private and foreign investment. The possibility of redefining the relationship between the MoP and Sonangol regarding licensing responsibility has been hinted at. This would give Sonangol a patina of independence from the government and allow it to become more involved in international ventures. This change may also be a step towards a clear separation regarding the HSE role. However, the entry of other NOCs into the market could reduce pressure for improvements.

Skills base

For meaningful change to take place, the MoP will have to increase its capacity, either through attracting competent Sonangol employees experienced in regulatory matters, or through new hirings. Attracting skilled staff from Sonangol would prove expensive, while hiring new employees is a challenge because of local content

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76