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Challenges create downstream opportunities for entrepreneurs in Angola

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Companies operating in Angola still face many challenges in terms of road infrastructure. Image credit: Leon Louw forWhyAfrica on the WhyAfrica Road Trip2023

Challenges create downstream opportunities for entrepreneurs in Angola  

Angola’s downstream oil and gas sector is rapidly expanding as efforts to reduce the reliance on imported petroleum drive new investment into large-scale infrastructure facilities. From transportation to storage to processing and distribution, the industry has opened lucrative opportunities for local businesses and entrepreneurs.

A panel discussion during last week’s Angola Oil & Gas (AOG) 2023 Conference & Exhibition in Luanda, organised by Energy Capital & Power (https://EnergyCapitalPower.com), explored these opportunities, with speakers drawing attention to the challenges faced by players and how integrating local players can serve to drive economic growth.

Kickstarting the conversation, panel moderator Anibor Kragha, Executive Secretary, African Refiners & Distributors Association, drew attention to Africa’s downstream infrastructure deficit, citing a range of challenges including financing and pressures to transition to renewable energy sources.

“Any project without financing will remain an idea. We need to invest in our regional infrastructure to make sure we can deliver on demand. Between now and 2030, our focus should be on upgrading our refineries, regional infrastructure, and some renewable investments. As renewable technologies become more mature, we can increase investment in these projects,” said Kragha.

Focus on downstream development (Challenges create downstream opportunities for entrepreneurs in Angola)

As one of Africa’s largest oil producers, Angola relies heavily on imported fuel to sustain its economy, and as such, focus has shifted towards stimulating development across the downstream industry.

The implementation of Presidential Degree 208/19 sought to incentivise investment in infrastructure while boosting competition and local participation. Four years on, Angola’s downstream sector continues to face some challenges.

According to Kid Carvalho, Board Member, Sonangol Distribution and Commercialisation one of the main challenges companies faces is finance. “Many companies run to the bank for investment but don’t always find capacity to get the funding. Another challenge is deficit of infrastructure. Big projects are ongoing such as refineries, but we still have deficits regarding other infrastructure. In Angola we normally use road transport, which is expensive. If we had pipelines, it would improve the efficiency of transport,” said Carvalho.

Echoing these remarks, Oscar Sequesseque, Chief Commercial Officer at Pumangol Angola, said that the company must deal with problems of continuous supply on a daily basis. “One of the greatest barriers for us is the realisation of liberalistion,” said Sequesseque.

Efforts to address challenges  (Challenges create downstream opportunities for entrepreneurs in Angola)

However, efforts are being made to address these challenges. According to Claire Dutertre, Managing Director, TotalEnergies Marketing, the establishment of the IRDP has played an instrumental role in uniting downstream players while supporting the integration of local players into the value chain.

“There are two key points when we talk about local content. The first is the importance of the IRDP and establishment of the IRDP. The IRDP is a facilitator bringing players together and having discussions, facilitating licensing and the knowledge of how Angola business is conducted in Angola. The weight of the IRDP in terms of what Angola wants to achieve is important. Secondly is strategy and the development of new services,” said Dutertre.

Representing the IRDP, Deputy General Director Antonio Feijo added to Dutertre’s comments on local content. “The objective in Angola regarding local content is to insert Angolan companies, integrate equipment that is manufactured locally and bring the workforce to industries in the downstream sector.”

“There is no doubt that the capacity building of human capital in Angola will be a determining factor for the development of the downstream segment. Without the participation of the local people, we will not have a developed downstream,” he added highlighting the importance of advancing local content and investment in this industry.

Mauro Carvalho, Co-Managing Partner, Famar concluded: “In terms of professionals for the downstream sector Angola has an advantage. Compared to other countries, we are well-served. We have a lot more to share than to learn and I think we are on the right path. The downstream is working extremely hard,” said Carvalho.

Challenges create downstream opportunities for entrepreneurs in Angola

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Challenges create downstream opportunities for entrepreneurs in Angola  

 

 

 

 

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