Angola's Oil Export: A Key Economic Driver

Angola exports a significant amount of oil, with 94% of its oil production exported in 2016. Angola's oil exports reached an all-time high of 1,770,410 barrels per day in 2009, with a record low of 328,300 barrels per day in 1981. In the fourth quarter of 2020, China was the main destination for Angolan crude oil exports, importing nearly 72% of the country's crude oil. Angola holds an estimated 8.42 billion barrels of proven oil reserves as of 2016, ranking 18th in the world. The country's oil sector is key to its economy, accounting for almost 75% of its revenues.

Angola's oil exports in 2022

Angola exported a large amount of oil in 2022, with some sources placing the figure at $39.4 billion, and others at over $40 billion. This made Angola the 12th largest exporter of crude petroleum in the world in 2022. The country's oil exports exceeded those of 2021, with a greater volume of oil exported, and higher revenues generated.

The country's oil exports are a key part of its economy, with the sector making up more than 90% of Angola's exports and accounting for up to $39.94 billion in revenue in 2022. Angola's government has implemented reforms and changes to boost the sector, including transferring rights from the national oil company Sonangol to the National Agency for Petroleum, Gas and Biofuels (ANPG). The country has also been working to develop its refinery capabilities to reduce its dependence on imported refined petroleum.

Angola's oil production levels have been declining in recent years, with current production at around 1.1 million barrels per day, down from 1.8 million barrels per day in 2015. However, the country still holds abundant untapped oil resources, with reserves estimated at 9 billion barrels of crude oil. Angola's oil and gas upstream market is expected to record growth during the forecast period of 2022-2027, with the recent increase in crude oil prices benefiting the country's economy and finances.

China as the main importer

Angola exports oil to several countries, with China being the main importer. In 2020, Angola was the fifth-largest provider of oil imports to China, and in the fourth quarter of 2020, China imported nearly 72% of Angolan crude oil. Angola's trading power with China has decreased since 2007 when it was China's biggest trading partner in Africa. In 2016, Angola became China's third-largest trading partner in Africa, with trade between the two countries valued at US$15.6 billion. Angola's oil industry is a key sector, accounting for almost 75% of the country's revenues. The country has an estimated 9 billion barrels of proven crude oil reserves.

China and Angola have a long-standing relationship that predates Angola's independence. In 1983, the two countries established formal relations, and since the early 2000s, Angola has been a consistent supplier of oil to China. In 2006, Angola even surpassed Saudi Arabia as China's top supplier of oil. China has invested heavily in Angola, particularly in infrastructure projects, in exchange for reduced-price oil. This exchange has benefited both countries, enhancing Angola's fiscal capacity.

In 2024, the two countries upgraded their bilateral relationship to a comprehensive strategic partnership. Angola's President João Lourenço visited China, and the countries announced their intention to further strengthen their ties. China's Prime Minister Wen Jiabao visited Angola in 2006 and offered a US$9 billion loan for infrastructure improvements in return for petroleum.

Despite the strong relationship, there have been some challenges. During Angola's civil war, China backed opposing factions, and relations with the new MPLA government were strained due to tensions with the Soviet Union. In recent years, Angola's President João Lourenço has sought to diversify the country's economy and reduce its dependence on China. Additionally, Angola has faced difficulties in fully exploiting its oil resources due to industry barriers, macroeconomic threats, and restrictions on foreign exchange.

Oil exports by destination

Angola exported $39.4 billion in crude petroleum in 2022, making it the 12th largest exporter of crude petroleum in the world. In the same year, crude petroleum was Angola's most exported product.

The main destinations of Angola's crude petroleum exports in 2022 were:

• China ($21.5 billion)
• India ($3.59 billion)
• France ($2.37 billion)
• The Netherlands ($1.78 billion)
• Spain ($1.57 billion)

The fastest-growing export markets for Angola's crude petroleum between 2021 and 2022 were:

• France ($2.19 billion)
• China ($2.08 billion)
• India ($1.76 billion)

The United States also has a vested interest in Angola's oil and gas sector, with US companies such as Halliburton, Baker Hughes, and Schlumberger actively involved in the Angolan upstream market.

Angola's oil reserves

Angola's oil sector is of utmost importance to the country, accounting for almost 75% of its revenues. The country is the second-largest oil producer in Africa and joined OPEC in 2007. In 2010, during prosperous oil production years, Angola produced as much as 2 million barrels of oil per day (bpd). As of 2016, Angola was producing 1,796,742.75 barrels of oil per day, ranking 16th in the world. In 2022, Angola exported $39.4 billion in crude petroleum, making it the 12th largest exporter of crude petroleum in the world.

Angola's oil and gas sector remains challenging to navigate due to industry barriers, high production costs, and macroeconomic threats. However, the country's oil reserves present significant opportunities for investment and development, with the recent hike in crude oil prices benefiting Angola's economy and finances.

Oil production in Angola

Angola holds abundant untapped oil and gas resources, with proven crude oil reserves of around 9 billion barrels and 11 trillion cubic feet of proven natural gas reserves. The country is a significant player in the oil industry, currently producing approximately 1.16 million barrels of oil per day, though it reached a high of 2 million barrels per day in 2010. The petroleum industry is vital to Angola's economy, accounting for about 75% of the country's revenues.

Angola has implemented reforms to boost its oil sector, including transferring concessionaires' rights from the national oil company Sonangol to the National Agency for Petroleum, Gas and Biofuels (ANPG). The ANPG is responsible for regulating upstream operations and awarding concessions for onshore and offshore exploration and production fields. To stimulate investment, the ANPG planned a six-year licensing round to auction a total of 50 new blocks on the Congo, Namibe, Benguela, Etosha, Okavango, and Kassange basins.

Despite its vast resources, Angola has not fully unleashed the potential of its hydrocarbon sector. The country faces challenges such as high production costs, restrictions on foreign exchange, and bureaucratic processes for contract signing and renewal. Angola is working to address these issues and attract more investment to its oil and gas sector.

Angola is a leading oil producer on the African continent, recently surpassing Nigeria and Algeria. However, it is heavily dependent on imported refined petroleum, spending over $2 billion annually on petroleum imports. To address this imbalance, the Angolan government is prioritizing refinery development, with upgrades to its only operating facility in Luanda and three new projects in the pipeline. The aim is to achieve self-sufficiency in refined hydrocarbons through public-private partnerships.

Angola's oil exports play a significant role in its trade. In 2022, Angola exported $39.4 billion in crude petroleum, making it the 12th largest exporter of crude petroleum worldwide. The main destinations for Angola's crude petroleum exports include China, India, France, the Netherlands, and Spain.

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