The “Agência Nacional de Petróleo, Gás e Biocombustíveis” (National Petroleum, Gas and Biofuel Agency), ANPG in short, is the Angolan petroleum regulator and “National Concessionaire”. It is also a sort of broker entity which collects the oil revenues that are allocated to the State and pays over such funds to the National Treasury account. As such, ANPG plays a pivotal role in the circulation of oil money and in ensuring the Angolan State receives its share of the oil revenue. How does this process actually work? The response is found in Presidential Decree 289/19, of October 9^th, 2019, which lays down the process whereby ANPG collects and transfers the oil revenues to the State, while keeping a slice to itself to cover its running costs. Below is a step-by-step outline of the process:

1. Under the existing Production Sharing Contracts with the investor oil companies, ANPG is entitled to a certain portion of the oil produced and to lift and export such oil. For each lifting, ANPG must determine whether such cargo is (A) committed to repay an oil-secured financing obtained by the State (“Committed Cargo”), or (B) is not associated with any financing (“Free Cargo”);
2. In case of a Free Cargo, the oil proceeds are deposited in a ANPG dedicated account and thereafter transferred to the National Treasury account. However, ANPG has the right to keep a portion of such proceeds (to be determined on an annual basis by the Angolan government), up to a maximum of 10%, to use for its running costs. This ANPG entitlement is currently (for 2022) set at 5%;
3. In case of a Committed Cargo, the process is a bit more complex. After each oil sale, ANPG must inform the Ministry of Finance of the sale amount and generate a credit note for such amount (insofar that the money was automatically used to repay a loan and not received by ANPG). This credit must be paid to ANPG (until the end of the following month) out of the surplus balance of the respective escrow account(s) which was/were created to secure/collateralize the oil loan(s);
4. If the said accounts do not have sufficient funds to pay ANPG, then the ANPG credit remains “open” until the accounts have surplus funds and/or a new Free Cargo is available so ANPG can be repaid;
5. At the end of each calendar year, a final-year reconciliation of the ANPG/MinFin “current account” balance must be produced to determine the amount of the ANPG credit (if any) which is rolled over to the following year.

One (very) important aspect of this mechanism is that the ANPG revenues are not based on actual oil sales but rather on an oil reference price which is established annually by the Angolan government. However, in case the market oil price is lower than the reference price, the lower price (market) will be used so that ANPG will not benefit from any “underestimation” of the oil price by the government. In the opposite scenario (market price higher than reference price), the reference price will prevail.

In brief, this is how the oil money circulates in the veins of ANPG and the State.

Have you ever wondered why the oil blocks in Angola are numbered and have names related to the Angolan oil basins? Are you curious why the oil fields within those blocks have names associated with, for example, flowers, musical instruments or fish species? This is not done randomly or on a whim. Quite the contrary, oil assets “nomenclature” in Angola is subject to very detailed rules and principles. These are contained in an Instruction (7/22, of August 17^th, 2022) issued by ANPG, the Angolan Petroleum Regulator. So, lets lift the veil on those rules.

Let’s start with the oil basins. There are 5 designated offshore oil basins along the Angolan coast with the following names (from north to south):

• Congo
• Lower Congo
• Kwanza
• Benguela
• Namibe

It goes without saying that Congo is Africa’s second largest river and Kwanza is the largest river that runs exclusively in Angola. Benguela and Namibe are the names of Angolan provinces. The vast majority of Angola’s oil production hails from the Congo and Lower Congo areas.

In addition, there are two inland basins designated as “Kassanje” (in the Malange and Uige provinces) and “Etosha/Okavango” (that straddles through the Cunene, Cuando Cubango and Moxico provinces). No oil is currently coming from these areas, although work in ongoing to assess their hydrocarbon potential.

Exploration and production areas are designated as “blocks”, and those that sit offshore are numbered from 0 to 50. Onshore blocks are numbered in relation to each basin and from 1 to a varying number. The exception is onshore Cabinda which is divided as Cabinda North, Centre and South.

Each block is assigned a “theme”. There are many themes and they can be very creative, including names of trees, fish species, birds, musical instruments, ethnic groups, traditional dishes, traditional dances, indigenous women names, locations, etc.. This is why we hear about the “Girassol” (sunflower) field in Block 17 or the “Kizomba” (Angolan dance) field in Block 15. These names are surely more fun than numbers or letters!

There are other more detailed rules regarding codes and IDs but they are not worth mentioning here.

We hope this information is useful or at least enjoyable to read!

Angola produced an average of 1.091 million barrels of oil per day in September 2022, a decline of 83.000 barrels compared to the August output. The September level is also roughly 5% below the 2022 average (1.147 million) that had been estimated by the Angolan petroleum regulator (ANPG) earlier in the year. Despite the lower output, Angola remains the biggest oil producer in Africa ahead of Libya and Nigeria. Africa’s top producer spot was conquered by Angola in May 2022 after overtaking Nigeria.

As regards oil exports, the daily average for the months of July and August was 1.092 m/b. Sonangol is the largest exporter by a wide margin, as it is responsible for about 42% of all exports. Of the total oil exported by Sonangol, some 70% constitutes the so-called “Concessionaire Oil” (oil share taken by ANPG on behalf of the state) and 30% is Sonangol’s “equity oil” (its own production as operator and investor). Angola’s oil exports have remained steady throughout the year.

The list of exports by oil company in July/August 2022 is as follows:

• Sonangol – 462.572 b/d monthly average
• TotalEnergies – 127.432
• ExxonMobil – 95,957
• ENI – 92,158
• Sinopec – 90,476
• BP – 63,700
• Equinor – 61,508
• Chevon – 60,171
• All others – 38,464

Of note is that two of the above companies (Sinopec and Equinor) are not operators, so all of their exports derive from their non-operator interests in several blocks operated by other companies.

As regards production, TotalEnergies remains the largest producer by far. Some 34% of all oil produced in Angola is originated in blocks operated by TotalEnergies. 

Angolan national oil company Sonangol has taken the helm of the Forum of the African National Oil Companies within the African Petroleum Producers’ Organization (APPO). The appointment took place last week in Luanda during a meeting of the CEOs of the African NOCs.
 
A central topic of last week’s meeting was the urgency of Africa chartering its own course in terms of energy transition and developing independent sources of financing for oil and gas projects in the continent. Western nations and banks have been significantly scaling down funding for hydrocarbon exploration in Africa and across the world and this poses an existential challenge to the long term survival of Africa’s oil industry. Against this threat, the NOC CEOs reaffirmed their commitment to support the establishment of a Pan-African bank (designated as “Africa Energy Transition Bank”) dedicated to provide critical financing for oil and gas projects in Africa. The new bank is to be set up as a joint effort of APPO and the African Export Bank (Afreximbank), and the African NOCs, including Sonangol, are expected to contribute financially to this initiative in terms to be decided.
 
This is a critical time for Africa’s oil and gas industry and the stakes could not be higher for Sonangol’s leadership of the NOC Forum.

Angola is meticulously implementing its strategy of attracting new companies to its oil sector and is using the licensing of new blocks in unexplored areas to pursue this goal. Last August a total of 7 new companies (which hitherto had no activity in Angola’s E&P landscape) signed contracts for the exploration of onshore oil blocks in the basins of the Congo and Kwanza rivers. These comprise a mix of international independent companies and local companies, of which 3 will become operators. The Angolan concessionaire and regulator ANPG signed contracts with newcomers MTI Energy, Mineral One, Alfort Petroleum, Intank Oil, Brite’s Oil & Gas, Monka Oil, Omega Risk Solutions and Upite Oil Company, together with other companies with an established presence in Angola’s oil sector. The number of companies with Angolan E&P assets has now surpassed 30.

Angola’s oil output is currently hovering above 1.1 million barrels per day, which puts it neck to neck with Nigeria as the largest producer in sub-Shaharan Africa. The government is hoping successful exploration and development of the new blocks will increase this output.

After a few years of relative calm, M&A activity in the Angolan oil industry is picking up steam. In recent weeks, a number of deals have been announced involving international oil companies (IOCs), small independents and local players. One of the most significant transactions was the acquisition by Angolan independent Somoil of a 20% interest in Block 14 held by TotalEnergies jointly with Inpex. The sale was approved by the Angolan Ministry of Mineral Resources and Petroleum through Executive Decree 424/22, of September 8th, 2022. Operated by Chevron, Block 14 has mature fields which have been producing since 1999 with a present output of around 45.000 barrels per day. Somoil is the biggest and most active Angolan homegrown upstream operator with a portolio of stakes in 14 operated and non-operated blocks.
 
Meanwhile London-listed Afentra is in the process of purchasing from Croatian INA – Industrija Nafte a 4% interest in Block 3/05 and a 5.33% interest in Block 3/05A, both operated by Sonangol P&P. These transactions will build upon the earlier (April 2022) acquisition of a 20% interest in Block 3/05 from Sonangol, which will take Afentra’s combined interest in the Block to 24%. The acquisitions are still subject to Angolan regulatory approval, which Afentra expects to occur before the end of the year. Block 3/05 production is currently sitting at just under 20.000 barrels per day but has material growth potential.
 
Concurrently with Afentra’s acquisitions it is anticipated that the Block 3/05 and 3/05A licenses will be extended to 2040 by the Angolan government under improved commercial and fiscal terms to stimulate investment and boost production. These blocks represent Afentra’s first foray into Angola.
 
Finally, the Angolan petroleum regulator ANPG has just announced that Block 33/21 is available to be awarded by direct negotiation following an expression of interest submitted by the joint venture T-North Trading and Brubell Investimentos. Other interested companies are invited by ANPG to apply for this block (as operator or non-operator) until the end of September. Block 33/21 is located in offshore Lower Congo Basin.