Nigeria’s dominance over Africa’s oil production is beginning to slip as neighboring Angola gains more favor with foreign oil companies.
Data from Angola’s National Oil, Gas and Biofuels Agency (ANPG) shows that investments in the country’s oil sector climbed by 96% between 2022 and 2023, totaling about $50 billion during the previous five years.
As per the investor note released by the state-owned corporation, ANPG, Jerónimo, the chairman of the board of directors, has announced plans to invest approximately $71 billion over the next five years, excluding any expenditure for additional output.
Angola has been aggressively implementing industry changes since 2017 in order to guarantee a transparent and competitive oil and gas sector.
In 2019, the nation launched a six-year licensing process that ensures international players would have annual investment possibilities in exploration.
53 bids were submitted for the most recent of them, a 12-block contract that included blocks in the Kwanza and Lower Congo Basins. This demonstrated the level of interest in Angola’s oil and gas.
Angola’s secretary of state for oil and gas, José Barroso, clarified that the nation’s concessionaire and national regulator, ANPG, will keep promoting the sector vigorously and advancing bid rounds in accordance with national production goals.
Barroso noted that Angola provides regulatory freedom in terms of oil and gas agreements.
“In addition to production-sharing agreements under the six-year licensing round, the country introduced a risk-reducing alternative in 2020, enabling the awarding of risk service contracts when the public bid process is unlikely to succeed,” Barroso stated in an interview monitored by The News Chronicles.
He continued, saying, “The ANPG can also negotiate new contracts with operators without holding a bid round thanks to a permanent offer program that was started in 2021. A Tax Benefits Code that was passed in 2022 and provides benefits for oil firms is one of the additional reforms.”
Barroso claims that the administration is willing to negotiate and find a fair solution that gives investors the correct kind of returns.
He went on to say that the government is amenable to license renewals, guaranteeing an enduring and robust partnership between the state and oil firms.
“The plan guarantees that oil and gas production remains a top priority for the next ten years, given that oil accounts for over 30 percent of GDP, 70 percent of government revenue, and 90 percent of exports,” Barroso stated.
Nigeria is underperforming compared to its massive oil reserves, which are estimated to be 37.1 billion barrels.
The largest economy in Africa depends heavily on oil. It contributes significantly to the government’s global presence, around half of its revenue, and almost all of its foreign exchange earnings.
However, in the 64 years since its discovery, it has also been underutilized as a resource for the 200 million people who live in Nigeria because of poor local engagement, contracting delays, and bureaucratic bottlenecks. This is because Royal Dutch Shell was the first company to tap a well in the Niger Delta’s marshes.
“Nigeria enjoys opening discussions rather than closing them. You enjoy debating a lot. Nigerian legislatures constantly pass new laws pertaining to petroleum. When there are such constant arguments, it is difficult for investors looking for long-term structure to know which way to go,” said Patrick Pouyanne, CEO of TotalEnergies.
Speaking to panelists at the Africa CEO Forum in Kigali, Rwanda, Pouyanne claimed that inconsistent policy decisions caused the project to be redirected from Nigeria to Angola, a nation with a more solid legal system.
“We have countries with perfectly integrated policies, such as Angola. So we went to Angola and announced a massive $6 billion deal at the start of the week because their structure is stable. So we know where to go,” Pouyanne remarked.
According to experts contacted by The News Chronicles, investors have historically been discouraged by security worries in the Niger Delta, which is the epicenter of Nigeria’s oil industry.
The Nigerian government started the 2024 oil bid round early this month, but recurring worries about a forced merger of bidders, accusations of favoritism, and large signing incentives might taint the proceedings.
There are 12 oil blocks and five deep offshore assets up for grabs from the previous year’s bid process.
According to TNC’s research, just roughly five of the more than 60 companies that received authorization in the most recent minor bid round have begun production.
