Angola is spearheading the growth of its domestic service industry within the oil and gas sector through local content regulation. These policies create revenue-generating opportunities for local service firms by strengthening their contribution to the industry.
Policy Creates Inroads for Domestic Companies
The Angolan government is driving local content through its Angolanization initiative – an agenda which strengthens national entrepreneurship by granting local service providers preference regarding oil and gas contracts. Legislated via official decrees such as Law 10/79 and Decree 13/03, the initiative prioritizes Angolan employment and ownership rights, advocates for capacity building and skills transfer, and fosters socioeconomic development.
In addition to these laws, the amendment of Angola’s Local Content Policy (LCP) in October 2020 – underscored by Presidential Decree No. 271/20 – provides greater clarity on local content requirements while creating new avenues for all companies providing goods and services to the oil sector. The amended LCP features a definition of an Angolan company; prioritizes the utilization of Angolan service companies; outlines registration requirements for domestic firms; and stipulates all oil and gas contracts to include a local content clause.
With these changes, Presidential Decree 271/20 extends opportunities to Angolan service companies, previously dominated by international players.
Enabling Market Entry Through Agency Support
Regulatory bodies, such as Angola’s national concessionaire the National Oil, Gas and Biofuels Agency (ANPG) and Angola’s downstream regulatory body the Petroleum Derivatives Regulatory Institute (IRDP), play key roles in supporting the success of local companies. These regulators ensure adherence to LCP while cultivate an environment conducive to the growth of Angolan service companies.
The ANPG recently announced the launch of the ‘Competition for the Attribution of Petroleum Concessions for Bid 2023’ – open to both national and foreign entities. This initiative not only encourages competition but also presents opportunities for local service companies to participate in and contribute towards exploration and production activities in the Lower Congo and Kwanza Onshore Basins.
Simultaneously, service company organization the Association of Angolan Petroleum Service Companies (AECIPA) champions professional initiatives within Angola’s energy sector. Representing 150 company-members, AECIPA addresses concerns, advocates for members with officials, cultivates relationships, and encourages good business practices, aligning with the objectives of local content initiatives.
Angolan Service Companies Drive Industry Growth
Through policies and with the guidance of regulatory bodies, Angola’s service companies are making strides towards developing the market. As a member of AECIPA, Angolan service company Brimont Angola secured a contract in 2021 to procure specialty chemicals for Angola’s national oil company Sonangol across its operated blocks. Leveraging Sonangol’s focus on local expertise, Brimont demonstrated its services in Angola’s energy sector, fulfilling the contract and establishing itself as a service provider for other industry operators.
Similarly, Angolan maritime services provider OCTOMAR entered a joint venture with Angolan logistics services provider Cabship to establish a diving and offshore marine support company in the Cabinda Special Economic Zone. The venture aims to enhance the value chain for service provision in Angola’s oil sector by domestic companies. Meanwhile, oilfield service provider, Certex Angola, has concentrated on establishing partnerships with global entities like American multinational ExxonMobil. This strategic effort aims to create synergies between local Angolan players and international oil and gas companies.
During the Angola Oil and Gas (AOG) conference in 2023 – the country’s premier energy event -, Mauro Carvalho, Co-Managing Partner at Angolan marine service company Famar, emphasized the efficiency of local service companies in the downstream sector. He stated that Angola holds a comparative advantage in this area as the country’s downstream services are well-established. At the upcoming AOG conference – scheduled for October 2-4 – local service companies will return to showcase progress made in the sector and how local content initiatives have been driving this progress.
