Angola: Local businesses in the spotlight thanks to local content standards

Angola, consistently ranked among the top three crude oil producers in Africa, continues to transform its oil industry by focusing on developing local content. After leaving the Organisation of Petroleum Exporting Countries (OPEC) a few months ago, the country has committed to increasing the participation of its national companies in the oil and gas sector, with a particular focus on the downstream segment of the industry.

According to a statement by the Institute for the Regulation of Petroleum Products (IRDP) on 11 October, Angolan companies now dominate this strategic segment, accounting for 90% of the market share of downstream activities. This success is attributed to the Angolan government's concerted efforts to promote the development of local content, a key strategy that has preserved and strengthened oil expertise on the African continent.

Luis Fernandes, head of the IRDP, stressed that this result was the fruit of the initiatives launched by his organisation, aimed at attracting investment and building the capacity of local companies. Local content, which requires Angolan companies to play a leading role in the industry's value chains, has helped to create an environment in which national players have become the main drivers of the sector's development.

Angola has put in place a solid regulatory framework to encourage the participation of local companies in the oil and gas industry. This framework has encouraged job creation, skills transfer and the integration of local suppliers into large-scale projects. By consolidating this local expertise, the country intends to reduce its dependence on foreign companies and maximise the economic benefits of its natural resources.

One of the cornerstones of this strategy is the development of new refining infrastructures. Angola is currently in the process of installing three large refineries in Cabinda, Soyo and Lobito, which should considerably increase local production capacity for petroleum by-products. Once completed, these projects will not only help to reduce imports of petroleum derivatives, but also consolidate the position of local companies in the process of transforming the country's petroleum resources.

In addition to these refineries, Angola is developing additional storage infrastructure and expanding its network of service stations across the country. These initiatives are designed to increase the capacity to distribute petroleum products on the local market and ensure a stable supply for the population.

Despite its vast oil reserves, estimated at around 9 billion barrels, and its 11 trillion cubic feet of natural gas, Angola continues to spend more than $1.7 billion a year on imports of oil-derived products. This paradox is largely explained by the lack of sufficient refining infrastructure to process locally the hydrocarbons produced in the country.

The African Chamber of Energy has stressed that this dependence on imports represents a major economic challenge for Angola. The construction of new refineries and the expansion of local capacity are therefore crucial to improving the country's energy self-sufficiency and reducing its foreign currency expenditure.

With the development of refineries and storage facilities, Angola is well on the way to reducing its costly dependence on imported petroleum products. By relying on local companies to take on a growing share of downstream activities, the Angolan government also hopes to strengthen the resilience of its economy in the face of fluctuations in international markets.

Luis Fernandes is optimistic about the future of the sector. He believes that the contribution of local companies will only increase as the new refineries come on stream, enabling Angola to maximise the benefits derived from its oil resources while consolidating its national industry.

Angola's commitment to promoting local content in the oil and gas sector provides an inspiring model for other resource-rich African countries. By consolidating local capacity and investing in processing infrastructure, Angola is not only ensuring greater control over its oil value chain, but also greater long-term economic stability.