Wednesday, Jun 12, 2024
Update At 14:00    USD/EUR 0,92  ↑+0.0002        USD/JPY 151,69  ↑+0.174        USD/KRW 1.347,35  ↑+6.1        EUR/JPY 164,16  ↑+0.143        Crude Oil 85,49  ↓-0.76        Asia Dow 3.838,83  ↑+1.8        TSE 1.833,50  ↑+4.5        Japan: Nikkei 225 40.846,59  ↑+448.56        S. Korea: KOSPI 2.756,23  ↓-0.86        China: Shanghai Composite 3.015,74  ↓-15.745        Hong Kong: Hang Seng 16.512,92  ↓-105.4        Singapore: Straits Times 3,27  ↑+0.018        DJIA 22,58  ↓-0.23        Nasdaq Composite 16.315,70  ↓-68.769        S&P 500 5.203,58  ↓-14.61        Russell 2000 2.070,16  ↓-4.0003        Stoxx Euro 50 5.064,18  ↑+19.99        Stoxx Europe 600 511,09  ↑+1.23        Germany: DAX 18.384,35  ↑+123.04        UK: FTSE 100 7.930,96  ↑+13.39        Spain: IBEX 35 10.991,50  ↑+39.3        France: CAC 40 8.184,75  ↑+33.15        

Diversification aims to re-launch economy

Interview - December 4, 2014

Petroleum will continue to dominate Angola’s economy for the foreseeable future. But as Petroleum Minister José María Botelhos de Vasconcelos points out in this interview, Angola’s dependence on oil has been reduced in recent years, as other industries contribute more to tax revenues and to overall economic growth.


Angola’s economy registered average growth rates of 10.5% between 2001 and 2010. How do you assess the country’s current climate of economic development and what are its prospects as a regional power?

Judging by the indicators obtained prior to 2010, there is a clearly visible image of an economy that is on the rise. We should take into account the reality of the international economic and financial crisis of recent years, but the truth is that Angola has been maintaining a positive level of growth, currently above 3%.

As you must know, oil has been the catalyst for our development, and we will continue to work in that direction with objectives and programs implemented by the government. Our economy should not be permanently held hostage to oil sector revenues, and so we must take advantage of these (other) resources to re-launch our economy.

If we look at the macroeconomic indicators, we can see that Angola, in terms of exports, maintains practically the same levels that we had before. That is, 98% of our exports consist of oil and diamonds, although there are other mineral resources that are starting to be integrated into the revenue mix.

In terms of revenues, we also had a decline from 75% to 70% (of the total) in the tax revenues that originate from oil. In another extremely important indicator, GDP, (oil) used to comprise 60% and today it represents about 43%....

We are a country with about 20 million inhabitants and we need to provide the people with the conditions required to reduce the differences between the various social strata of Angolan society. This translates into reducing poverty as much as possible.

International institutions, connected to UN itself, have been making positive assessments of the levels of human development in Angola. Just to give you an idea, the level of poverty, which used to be at around 70%, is now down to 36%.

Following the 20th anniversary (in 2013) of diplomatic relations between the USA and Angola, what would you say is the importance for Angola of having the United States as a partner?

We have a very positive relationship, because we always maintained cooperation with regard to energy. I mean, our greatest partners have been American companies, such as Exxon, Chevron, Halliburton, among other service providers from the sector. I can say that it is a relationship in which the dialogue has flowed very well.

In a sector in which there are major international players, what would be the policies to facilitate allowing local companies to enter the sector?

We already have some local companies participating in this industry, but as you must know, most of our activity is developed offshore. Nevertheless, we are starting a bidding process for some onshore concessions, where the policy that we defined is to promote the integration of more local companies, which may overcome their deficiencies by establishing partnerships with foreign companies with the required technical knowhow and financial resources.

In terms of the provision of services, there is a whole process being implemented, in which some local providers are already present in the oil industry, involved to a degree based on the complexity of each of them. As I mentioned above, given the complexity of this sector, there are only three or four national companies that are in fact operating (Somoil, Crete, Falcon and Initial Oil).

You recently said that the Angola LNG project signals a new stage for the hydrocarbons industry in Angola. How do you foresee the development of that industry and how is the project coming along?

We all know that, when it was conceived, the Angola LNG project had the USA as its target market. But with the current reality, after the discovery of non-conventional gas three years ago, the American market is no longer as attractive.

With regard to the project’s evolution, it is still moving forward and, as you know, there are regions in the world with greater need for gas than others, as is the case of Europe and Asia. At the moment, this is the target market for Angola’s natural gas. This is the project’s first stage of development and there will be a second stage, in which we will take advantage of this resource for the production of some petrochemical products.

With regard to the introduction of the New Law on Foreign Exchange Policy, how was it received by the industry in Angola?

I am certain that its implementation has been positive and there is, in fact, full compliance by the operating companies. But as you know, any new law sometimes causes concerns. Nevertheless, as I said, the implementation itself has been good and made incrementally. We established 24 months for its effective implementation until October (of 2013). In short, it is a process that is ongoing, safely and soundly, although there were some small negative reactions at the beginning, but overall, it has been developing in a very positive manner.

In  your opinion, what makes Angola one of the most competitive countries for the oil and gas business, when compared to other countries in the continent?

Fundamentally, I think that it comes down to the instruments and mechanisms used in contractual relations in Angola that attract investments to the country. In this regard, we can mention our tradition in the oil industry, because we have always rigorously honored our contractual relations with our partners, which gives us conditions that maybe other countries do not have. Our Law on Private Investment is very well adapted to the reality of the country and contributes toward the great attractiveness that we have always had, since far back in time.