6.000
%
Positive
54
mm boe
77
%
While changes to the tax regime have been limited, there is an acceptance in the country that opening access to independents will bolster the flagging interest in the Country's O&G sector. Recent attempts to open the licencing round are seen as a step in this direction, hence the upgrade in outlook (Positive) and modest reduction in risk premia (0.25%).
April 23, 2024
Africa - South
mm bbl
bcf
Southern Africa, bordering the South Atlantic Ocean, between Namibia and Democratic Republic of the Congo.
Multiple (PSC/Concession)
Companies operating in Angola do so under two different fiscal regimes: offshore production is subject to production sharing contracts (PSCs), whereas a concession agreement, with tax and royalty payments, applies to onshore production and the shallow water Cabinda concession. Within the PSC regime bonuses and profit oil/gas shares are negotiable – negotiated terms vary widely but generally reflect the perceived strong prospectivity of the area. Oil profits are divided between the investor and the government on a sliding-scale basis linked to rates of returns (IRRs). Deepwater developments benefit from uplift; in situations where large, high-cost development projects are required (i.e., the majority of Angola's deep-water discoveries), capital costs can be uplifted by 40%.
In 2023, Angola is set to solidify its spot as one of sub-Saharan Africa’s five largest economies, driven by higher oil prices and a growing non-oil sector, according to the IMF’s outlook. Positive economic momentum took hold in 2022, with the economy growing by 2.6% after ending a five-year recession with 0.7% growth in 2021. The economy is expected to grow 3.2% in 2023, alongside annual population growth of 3.3%. In May 2022 Angola briefly moved into the position of Africa’s top oil producer for the first time in over five years; the country currently stands as the continent’s fourth largest producer of crude oil. Angola is also a significant producer of rough diamonds, has reserves of more than 50 critical minerals, and is expanding the Lobito Corridor rail network as an outlet to link DRC mineral exports to the Atlantic. Angola joined the Extractive Industries Transparency Initiative in June 2022 to increase transparency in the oil, gas, and mineral resource sectors. The United Nations announced Angola will graduate from the Least Developed Countries category in February 2024.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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