Angola’s President João Lourenço will attend and address the fifth annual Gas Exporting Countries Forum (GECF), hosted by Equatorial Guinea as part of its ‘Year of Energy’ initiative.
The Gas Exporting Countries Forum is an intergovernmental organization of 11 of the world’s leading natural gas producers made up of Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago and Venezuela.
Angola joined the GECF as an observing member in November 2018. President’s Lourenço active participation in this year’s summit reflects the growing importance of the natural gas sector to his administration’s long-term plan to grow and diversify Africa’s third largest economy.
Angola’s oil sector has faced challenges in recent years. Production has fallen from a peak of 1.9m barrels per day in 2010 to just above 1.4m bopd. Furthermore, with limited refining capacity, Angola’s large oil production has done little to power the economy’s industrial sector, leading to fuel shortages like the one which hit Luanda recently.
Upon taking office in September 2017, President Lourenço’s priorities were clear: reform oil and grow gas.
In May 2018, President Lourenço issued a presidential decree which included specific policies to attract new investment into the natural gas sector.
This includes a five percent tax on gas production, compared to ten percent for oil; as well as a 15 percent income tax rate for non-associated gas (compared with a 25 percent rate for associated gas and oil). These attractive incentives, combined with a reformed licensing process and a renewed focus on reducing corruption, have put Angolan gas on the map.
There is presently just one operational gas facility in the country, located in Soyo, at the mouth of the Congo River.
The Angola Liquefied Natural Gas (LNG) plant is a $12 billion joint venture between Sonangol, Chevron, BP, Eni and Total. It reportedly has the capacity to produce 5.2 million tons of LNG per annum.
But with proven natural gas reserves of 383 billion cubic meters, there is massive growth potential in this sector. The country’s government now plans to capitalize on his opportunity.