Angola bounces back after slump in fuel production

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Angola is bouncing back after its fuel production slumped last year to a decade low as President Joao Lourenco steers reforms vital to the country’s economy and wins approval from oil majors. “It is a new era. I see a growing interest from investors,” says Guido Brusco, vice-president for sub-Saharan Africa of Italian giant ENI.

“We should come back to 2012/2013 to see the same level of interest” as that now being shown by investors, Brusco told AFP on the sidelines of a conference earlier this month in Luanda.

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France’s Total, the premier operator in Africa’s second-largest oil producer after Nigeria with output of 650,000 barrels per day, confirms as much.

“There is a business environment which could lead us soon to sign several agreements,” says a Total spokesperson. “A new page of Angola’s petrol industry is clearly opening.”

The arrival of Lourenco, who succeeded Jose Eduardo dos Santos who ruled for 36 years, has marked a radical step for the OPEC-member country.

When Lourenco took office oil prices were struggling to come back from a slump going back to 2014 but he has launched a string of initiatives in order to tackle falling production.

With oil Angola’s primary resource, that was an overriding priority given that production of “black gold” last year slid just below 1.5 million bpd, its lowest level for 10 years — the consequence of low prices and a freezing of new projects.

“We were in an environment of low prices and firms found it difficult to get responses from (state producer) Sonangol to advance dossiers,” an oil sector source who requested anonymity told AFP. Before embarking on reforms Lourenco first spent several months consulting the industry to pinpoint means of relaunching activity.

A series of policies, including tax perks, were introduced, enshrined in several presidential decrees which, Brusco says, have managed to “improve the investment climate.” Brusco says he served on a committee to deliver proposals to that effect “and the government endorsed those proposals.”