The Angolan petroleum regulator and National Concessionaire ANPG will launch on 30 September 2023 a licensing round for the onshore basins of Lower Congo and Kwanza (the “2023 Licensing Round”). A total of 12 blocks will be awarded, of which 8 are located in the Kwanza basin (KON1, KON3, KON7, KON10, KON13, KON14, KON15 and KON19) and 4 in the Lower Congo basin (CON2, CON3, CON7 and CON8). The blocks are depicted in the following map:

Bids must be submitted until 4 November 2023. The licensing round is open to Angolan and international companies.

Technical data about the blocks can be obtained virtually or in person by application through the ANPG website www.anpg.co.ao. 

ANPG will organize presentation sessions to be announced soon.

The Angolan Privatization Program has been updated and extended for 3 additional years until the end of 2026. In addition, the list of companies covered by the program in 2023 and 2024 has been revised and now includes the companies described below. It is planned that the Angolan state will sell its (direct or indirect) stake in these companies, up to percentages to be decided on a case-by-case basis. The updated program has been approved by Presidential Decree 78/23, of 28 March 2023.

List of companies covered by the Privatization Program

Group A – Large Companies (“National Reference Companies”)

2023

• ENSA SEGUROS
• BFA
• CIF CEMENT
• CIF SGS AUTOMÓVEIS
• CIF LOWENDO CERVEJAS
• CIF LOGÍSTICA
• NOVO AEROPORTO INTERNACIONAL DE LUANDA (NAIL)
• SGA
• ZEE
• MULTITEL
• TV CABO ANGOLA
• ENCTA
• ANGOLA TELECOM
• UNITEL

2024

• SONANGOL
• ENDIAMA
• BODIVA
• TAAG
• ALDEIA NOVA
• NOVA CIMANGOLA
• MSTELCOM

Group B – Sonangol Group Companies

2023

• SONASING SAXI BATUQUE
• SONASING XIKOMBA
• OPS – SERVIÇOS DE PRODUÇÃO PETROLÍFERA
• OPS PRODUCTION LIMITED
• PETROMAR
• ENCO
• SOCIETÉ IVOIRENE DE RAFFINAGE
• SONACERGY
• SONAMET INDUSTRIAL
• CENTRO INFANTIL FUTURO DO AMANHÃ
• CENTRO INFANTIL 1 DE JUNHO
• DIRANI PROJECT III
• GENIUS

2024

• HOTEL MIRAMAR

Group C – Other Companies/Assets

2023

• ACREP
• SECIL MARITIMA
• UNICARGAS
• TCUL
• CAMINHOS DE FERRO DE MOÇÂMEDES
• GRÁFICA DAMER
• TOFA
• STARS MOTORS
• CERÂMICA SASSA ZAU
• MOAGEIRA DE FARINHA DE TRIGO DE CABINDA
• ARMAZÉM DO CHIMBODO
• REDE DE LOJAS POUPA-LÁ
• EDIPESCA – LUANDA
• EDIPESCA – NAMIBE
• COMPLEXO DE FRIO DE CABINDA
• MATADOURO MODULAR DE LUANDA
• COMPLEXO DE SILOS DE CATETE

2024

• MUNDIAL SEGUROS
• TV ZIMBO
• GRUPO MEDIANOVA

By way of Order 2/23, of 9 February 2023, the Angolan Central Bank (BNA) has enacted a new foreign exchange regime for mining activities in Angola (“Mining Forex”). Below is an outline of the Mining Forex:

Entities covered: The Mining Forex is applicable to the following entities:

• Holders of rights for reconnaissance, prospecting, exploration, exploitation, cutting, commercialization and marketing of minerals;
• Diamond cutters;
• Sellers and buyers of rough diamonds or other minerals;
• Exporters of rough or cut/polished minerals;
• The state-owned Diamond Trading Company, SODIAM;
• Other state-owned mining companies;
• Other related entities involved in the extraction of minerals.

Export: All exports of Angolan minerals (in a rough or cut/polished state) must be paid in hard currency;

Revenues: Export revenues are processed as follows:

• Angolan investors – they must bring the funds to local (Angolan) bank accounts, except as needed to reimburse external loans;
• Foreign investors – they can keep the funds outside Angola, except they have to import funds to (i) pay local taxes, and (ii) pay local suppliers.

Payments: Payments between local entities must be settled in local currency (Kwanza),  except in the following cases where settlement in hard currency is permitted:

• Transactions between the producers and SODIAM;
• Transactions between the producers and the diamond cutters;
• Transactions between the diamond cutters and SODIAM.

All payments must be made by electronic transfer between bank accounts with local banks. Cash withdrawals and payments are prohibited.

Bank accounts: Entities covered by the Mining Forex must open accounts with local banks in both local (Kwanza) and hard currency. Hard currency accounts are funded by exports. These accounts (hard currency) can be used for the following purposes:

• Reimbursement of hard currency loans (bank and shareholder loans);
• Payment of dividends to foreign shareholders;
• Payment of imports of goods and services;
• Purchase of local currency;
• Other hard currency operations permitted by law.

External loans: Entities covered by the Mining Forex may obtain foreign loans to finance their mining activities without need to seek BNA approval. In the context of such loans, foreign escrow accounts may be opened and the buyers of Angolan minerals may be instructed to make payments into these accounts directly for repayment of the loans.

The previous regulations dealing with the subject matter are revoked, including BNA Order 13/20, of 29 May 2020.

By way of Order 1/23, of 30 January 2023, the Angolan Central Bank (BNA) has issued regulations on the opening, operation and closing of bank accounts by the Angolan commercial banks. Below is an outline of the new rules:

• Any individuals or companies, including non-resident entities, may open accounts with Angolan banks in local currency (Kwanza) or hard currency;
• Accounts may be opened in person or online;
• Clients cannot use third-party funds to open an account unless a “credible justification” is provided;
• Banks must organize an individual file for each client with the client details, signature sample and other information;
• A Bank Account Contract must be provided to each client with the terms for using the account, bank charges and fees, treatment of client information, communications between the bank and the client, and other mandatory information;
• Regular account extracts must be provided to clients free of charge;
• Accounts are considered “dormant” if no debit entry is registered for a period of 24 months. Banks must establish restrictions to the movement of dormant accounts;
• Transfer of hard currency between accounts domiciled in Angola is only permitted between the same client, affiliated companies or parents/children;
• Credit facilities cannot be extended to hard currency accounts unless the client is an exporter entity;
• Upon learning that a client has passed away, banks must immediately block the transfer of funds from the account. Movement of the account is only permitted to the heirs of the deceased client provided appropriate legal documentation is provided the bank;
• If a client is declared bankrupt or insolvent, banks must immediately block access to the account and comply with the instructions received from the relevant judicial authority;
• Banks can discretionarily close any account subject to providing 60-day advance notice to the client;
• Banks can close an account immediately in the following cases:

1. The client has provided false or incomplete information to the bank;
2. The client has breached the Bank Account Contract;
3. The bank is unable to comply with the Know Your Client (KYC) obligations;
4. The client’s risk profile is unacceptably high to the bank;
5. The client (company) is extinguished;
6. By decision of a judicial authority.

• Banks can close accounts that are dormant for 15 years if the bank is unable to contact the client (including through newspaper notices) during this period. Funds in closed accounts must revert to the State.

Banks have a grace period of 90 days to ensure compliance with the new regulations.

The previous regulations dealing with the subject matter are revoked, including BNA Orders 3/09, of 5 June 2009, 10/16, of 5 September 2016 and 2/17, of 3 February 2017.

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.