Owing to a state-led agenda to expand refining, storage and distribution capacity, and with plans to increase its refining capacity to 425,000 bopd, the Angolan economy is set to become a more lucrative and competitive investment space by revamping, modernising and liberalising its downstream sector
During the second day of Angola Oil & Gas 2022, a 'Downstream in Focus' panel discussion took place featuring speakers such as António Feijó, deputy general manager, IRDP; Eusébio Vunge, director, UNDC Sonangol EP; Anders Østergaard, Group CEO, Monjasa; Ivanilson Machado, CEO, Pumangol; Tarik Berair, business development and sales manager, Africa, Technip Energies; Mauro Carvalho, managing partner and founder, Famar, and Luis Coelho, executive director, Zambezi Refined Petroleum Multi Product and Natural Gas Pipelines Ltd. Moderated by Hasnayn Ebrahim, managing director for Africa international advisors, the session was opened with a keynote address given by Anibor Kragha, executive secretary for the African Refiners and Distribution Association, who spoke on the importance of the downstream sector in improving the delivery and reliance on cleaner fuels for Africa.
“We must champion investments across the African downstream, and we are promoting African energy security,” Kragha stated, adding, “We need to ensure that the downstream players get the right financing in place to deliver cleaner fuels and must add value and put investment in the continent to create further energy security.”
Thereafter, the discussion kicked off with Coelho stating, “Investments in the downstream sector will create dynamism and strike a balance within the industry and thus result in profitability.”
Representing sub-Saharan Africa’s largest oil producer and boasting remarkable upstream developments, Angola’s downstream market is currently in the midst of a major transformation, owing primarily to the prolific development of the country’s refining capacity. Plans to increase its refining capacity by 360,000 bpd have been expediated by the recent completion of an additional gasoline production unit at the existing Luanda Refinery and will include the construction of several new refineries in Cabinda, Lobito, and Soyo.
“Today, we only rely about 69% on imported refined petroleum products since our Luanda Refinery is already supplying about 61% of our needs,” stated Vunge, adding, “The expected increase represents a huge opportunity for our company and our country so we can expand our presence in the region.”
Meanwhile, speaking on the importance of improving Angola’s refining capabilities, Berair said, “We definitely need to bring flexibility into the design of the refineries on the downstream side because of the changing nature of the demand, but also due to the environmental constraints we have.”
Aggressively pursuing the progressive liberalisation of the downstream sector by establishing the legal regime governing the activities of importing, receiving, supplying, storing, transporting, distributing, marketing and exporting petroleum products, the market is expected to see increased competition and efficiency, resulting in improved domestic access to fuels at a lower price.
“Liberalising the downstream market in Angola is the way forward and will attract further foreign investments,” said Østergaard, adding, “The demand is there: demand for Angolan crude, but also for Angolan refined products. We proudly work with Sonangol and the government and we have seen, over the last decade, that liberalisation is happening. An ideal liberalised market is a free market which would cater to foreign investments coming in to build storage, expand gas station networks, and from a bunkering perspective.”
“The issue of liberalisation has been discussed for quite some time,” added Machado, indicating, “We all know that the market and the investors have made deals with the government and the liberalisation of the downstream will continue to provide jobs and brings developments to Angola.”
Meanwhile, in addition to increasing its refining, storage and distribution capacities, the Angolan government has sought to spearhead development with regards to energy storage and distribution through the expansion of filling stations throughout the country.
Following the ramping up of these downstream developments, Angola is poised to become well-positioned to export and distribute refined petroleum products and associated petrochemicals to neighboring countries such as the Republic of the Congo, Zambia, Cameroon and the Democratic Republic of the Congo.
“With regards to the storage capability and distribution, we need to take into consideration some crucial aspects in order to optimise our products. In order to achieve these goals, storage commercialisation and distribution will result in a reduction of associated costs and mobilisation of the distribution of refined products, regionally and continentally,” said Carvalho.