Angola’s crude output falls below 1mn bpd amid investment drive and mature field decline

Angola’s oil output has fallen below 1mn barrels per day (bpd) for the first time since the southwestern African country left OPEC two years ago. Angola’s upstream oil, gas and biofuels regulator (ANPG) said crude production declined to 998,757 bpd in July.

According to the regulator’s data, this is the lowest level since March 2023, when average monthly production last dropped below 1mn bpd, Bloomberg reported on August 21.

Angola’s crude production is declining mainly because its mature oilfields are experiencing natural depletion, and new projects are not coming online fast enough to offset the losses. Despite the country’s recent initiatives to attract investment and launch new developments, output continues to fall below expectations.

Angola’s efforts to sustain production above 1mn bpd highlight the challenge its government is facing. With crude prices falling below the $70 per barrel benchmark assumed in Angola’s 2025 budget, the drop in output underscores the difficulty the government likely will have in meeting its revenue targets.

Angola is currently weighing the possibility of seeking support from the International Monetary Fund (IMF), although no formal request has been made yet, according to Bloomberg.

In December 2023, Angola left OPEC after 16 years of membership because it opposed the production quotas imposed by the group, according to the Washington-based media agency. While OPEC wanted Angola to cut its output to reflect its declining capacity, Angola argued that the quotas were too restrictive and undermined its efforts to attract investment and maintain production above 1mn bpd. In the end, the government preferred to have more flexibility to manage its own output and support its oil sector independently.

In a bid to prevent a further decline in production, the ANPG through a series of exploration and production projects is now rolling out a $60bn investment initiative across its upstream oil and gas industry between 2025 and 2030, as recently reported by NewsBase.

The ANPG aims to award 50 concessions in 2025, with 30 new concessions already awarded to date to a mix of international oil companies (IOCs) and regional players. Angola also launched five marginal fields for investment in 2024 to open doors to new operators. These fields are suited for smaller independent players seeking near-term production and are situated in producing blocks with proven petroleum systems, the African Energy Chamber (AEC) said in its report on Angola’s oil and gas initiatives.

Furthermore, the ANPG introduced an Incremental Production Initiative, aimed at enticing investment in producing and maturing assets. The initiative offers more attractive fiscal terms for companies looking to reinvest in mature assets and has already shown success, says the AEC. In 2024, US energy giant ExxonMobil announced a discovery at the Likember-01 well in Block 15 - the first find made under the programme.

IOCs already active in Angola, including Equinor (Norway), Chevron (US) and TotalEnergies (France) have praised the country’s initiatives to boost activity in the oil and gas sector.

However, output from the country’s oilfields is set to decline, with Angola’s Minister of Mineral Resources, Petroleum and Gas Diamantino Pedro Azevedo calling it the government’s “biggest challenge.”

The ANPG said it had previously projected production of 1.07mn bpd for July. However, the decline in production occurred ahead of plans to cut Angola’s oil exports to 994,000 bpd in October from 1.09mn bpd in September, according to a preliminary schedule seen by Bloomberg.