Angola’s oil and gas sector is witnessing an accelerated pace of new investments over the past few months thanks to the rising oil prices, Deutsche Bank said in a new report.

Angola, Africa’s second-biggest oil producer, holds the continent’s second-greatest oil reserves, estimated at nearly nine billion barrels of proven crude oil reserves and 1.6 trillion cubic feet of proven natural gas reserves.

“A lot of investment is pouring in from the oil majors,” said Danai Koutra, Head of Natural Resources Finance UK at Deutsche Bank. 

Last week, the Organization of Petroleum Exporting Countries (OPEC) monthly oil market said Angola recorded 1.06 million barrels per day (bpd) of crude production in April, becoming the top African crude oil producer for the month.

According to the bank, the new investment and bank lending supports the Angolan government in its ESG objectives and energy security, the report said, citing Azule Energy’s seven-year $2.5 billion pre-export financing signed in August 2022.

The company was formed as a 50/50 joint venture between the Angolan operations of oil industry leaders BP and ENI, making it Angola’s largest independent equity producer of oil and gas. 

The venture holds two billion barrels equivalent of net resources and growing to about 250,000 barrels equivalent a day (boe/d) of equity oil and gas production over the next five years.  

Koutra added that “the oil and gas industry has the appropriate skillset to help us all move towards net-zero… with opportunities for investment and further employment”.

Angola already draws more than half its energy from hydroelectric power thanks to its vast waterway network and is well placed to harness its on and offshore wind resources. 

“Angola is looking towards other continents such as Europe, which is home to a plethora of companies with extensive expertise in successfully executing wind energy projects and can serve as ideal partners,” noted Energy, Capital and Power in 2022. 

Value-added Agriculture 

The African nation has a potential 35 million hectares of arable land, but at present, only around 10% of this is cultivated. 

With agriculture comprising only around 10% of Angola’s GDP, the scope for further investment and lending to add value here is significant.

Banco de Desenvolvimento de Angola is a public financial institution created with the aim of supporting Angola’s sustained economic growth. Deutsche Bank acted as sole arranger, agent and lender on the €56.9 million export agency-covered financing to support a private sector project in Angola.

“This production facility supports the local economic transition from reliance on commodities production to creating higher value-add food processing, thereby reducing food imports and enabling local economic activity to rise up the value chain,” said Werner Schmidt, Deutsche Bank’s Head of Structured Trade Export Finance.

(Editing by Seban Scaria seban.scaria@lseg.com)