For more than a decade now, Angola’s oil sector has battled declining output, underinvestment, and the natural decline of its mature deepwater fields.
Once Africa’s second-largest producer after Nigeria, the country has now slipped below the set one million barrels per day (bpd) mark in July 2025, raising concerns about its long-term viability.
Global investors, cautious about political risks and unattractive fiscal terms, began shifting attention elsewhere to booming frontiers like Namibia’s Orange Basin or Guyana’s offshore plays.
But lately, a new wave of optimism is sweeping through Angola’s oil industry that not only suggests but also proves that the country is in for another round of economic boom.
At the centre of this resurgence is Azule Energy.
The joint venture co-owned by BP and Eni committed $5 billion to expand exploration and production activities in Angola.
To many, this planned capital injection is a clear vote of confidence in the country’s new investment climate and reformative leadership.
But can Angola’s bold reforms and renewed partnerships help deliver a genuine oil comeback?
Also, in a world that’s already rapidly shifting toward cleaner energy, how long will the revival last?
Does Azule’s $5 billion plan really signal renewed confidence?
Azule Energy, a 50:50 joint venture between Eni and BP formed in 2022, has quickly positioned itself as Angola’s largest independent oil and gas producer.
The company combines both firms’ upstream portfolios in the country and is also expanding into solar power and low-carbon technologies.
Over the years, Azule has invested more than $5 billion in Angola, holding stakes in 16 licences and maintaining daily production of more than 200,000 barrels of oil.
Currently, the company is advancing two major developments: the Agogo integrated oilfield project in Block 15/06 and the Quiluma and Maboqueiro (Q&M) gas projects, which mark Angola’s first non-associated gas development.
In May, the Agogo FPSO vessel, built by Yinson Production, arrived in Angola from Singapore.
The facility is equipped with carbon reduction technologies, including the first pilot post-combustion carbon capture system on an FPSO.
With a production capacity of up to 175,000 barrels of oil per day (bpd), the offshore unit is currently producing 30,000 bpd, according to Azule.
“Since we started operations just over a month ago, everything has run smoothly. Together we are ready to load the first cargo from Agogo FPSO. Currently, we produce about 30,000 barrels of oil per day,” a senior engineer from the company said.
Jahn Hoegberg, COO at Yinson Production, added: “Agogo is more than just a project, but represents collaboration, as well as Angola’s growing role in global energy security.”
At the recently concluded annual oil and gas conference in Luanda, Azule Energy also revealed plans to invest an additional $5 billion in Angola’s oil sector over the next four to five years.
The funds will support new oil and gas exploration projects as well as upgrades to existing brownfield assets.
“We have in the next four to five years 18 wells to be drilled, on which two-thirds are operated by Azule and one-third operated by others,” said Guido Brusco, COO of Azule’s global natural resources.
Production woes and struggle to meet targets
Angola’s oil production has faced significant challenges in recent years, which have made it difficult to meet government targets.
As of July 2025, Angola’s oil output fell below 1 million barrels per day (bpd), marking the first time this has happened since March 2023.
This decline is a stark contrast to the peak production of about 2 million bpd in 2008.
The output fall is attributed mainly to challenges faced at mature fields like Girassol and Kizomba where there are declining reservoir pressures amidst several delayed projects.
In October 2024, Oil Minister Diamantino Azevedo stated that reducing the pace of decline remains the government’s “biggest challenge”.
Despite new projects like Azule beginning production from the Agogo FPSO project and TotalEnergies adding an extra 60,000 bpd from the CLOV-3 and Begonia offshore fields, output still lags behind expectations.
After 16 years of membership, Angola decided to exit the Organisation of the Petroleum Exporting Countries (OPEC) in December 2024 citing concerns that the bloc’s production cut goal doesn’t align with the national policies at home.
Azevedo said the country gained “nothing by remaining in the organisation and, in defence of its interests, decided to leave.”
However, the current output fall has posed a serious concern for the government which depends on the sector for over 80% of its export revenue.
The country’s 2025 budget, benchmarked against a global oil price of $70 per barrel, is facing a huge deficit as current prices fall below the national target.
The current situation puts the government, which is already heavily indebted to China, under pressure to explore loans.
Bold reforms that are rewriting the energy game
Over the last 7 years, Angola has introduced several reforms aimed at addressing declining oil output and boosting investor confidence.
Firstly, and most importantly, the concessionaire rights have been transferred from the state-owned oil company Sonangol to the National Agency for Oil and Gas (ANPG).
ANPG was established in February 2019 through Presidential Decree No. 49/19 to enhance regulatory oversight and improve operational efficiency.
Secondly, the government has introduced various fiscal and regulatory measures to attract investment, particularly in marginal fields like the Kwanza basin where local players are keen on.
These incentives are designed to stimulate exploration and production activities, which have been lagging.
“We have a production profile that has generally been negotiated over the years with operators, and those who produce above average have an incentive,” said Paulino Jeronimo, CEO of ANPG.
Thirdly, Angola launched a new type of contract in 2020 known as risk service contracts (RSC) to facilitate high-risk projects that are anticipated to have trouble securing investment commitments.
For such projects, investors are now expected to provide exploration and development services in exchange for guaranteed payments.
This is different from production sharing agreements (PSAs), where investors are entitled to claim a share of production when exploration leads to commercial development.
Fourthly, there is an offer scheme that allows ANPG to award certain oil acreage only through direct negotiation with IOCs instead of carrying out competitive bidding rounds.
In fact, about 5 out of the total 10 blocks scheduled for the 2025 oil round have already been awarded to certain foreign players through direct negotiations.
“These new blocks represent the government’s effort to open the sector and ensure the country continues to benefit from oil revenues,” Azevedo stated.
In addition, following the creation of ANPG, the government has taken further steps towards partially privatising Sonangol that has historically operated as both an arm of the government and oil company.
Now, the government is preparing for an initial public offering of up to 30% that will allow local and international investors to have a share of the company.
“The IPO is part of our broader plan to make Sonangol more competitive and accountable, while creating room for private sector participation in the oil sector,” said Sonangol CEO Sebastião Martins in April.
Like Nigeria’s petroleum industry act (PIA), these reforms are geared towards revitalising Angola’s oil sector and making it more competitive and sustainable in the long term.
Global partnerships and new wave of foreign players
Of late, Angola has witnessed a renewed commitment by foreign players, thanks to its increasingly stable fiscal and regulatory frameworks.
Chevron and Equinor have expanded operations, while TotalEnergies approved a $6 billion deepwater project last year.
In June, the Angolan government signed fresh concession agreements with five major oil companies including:
- TotalEnergies (40%)
- Equinor (23.33%)
- ExxonMobil (20%)
- Azule Energy (16.67%)
The renewed license will extend the block’s operational timeline until 2045.
“We have opened a new chapter in the Dalia journey, which is a 20-year-old Block 17 platform that still produces 140,000 barrels per day,” Martin Deffontaines, TotalEnergies CEO for Angola, said.
These agreements are expected to unlock significant investments of up to $6 billion until 2030 to revitalise production in the country’s Block 17 oil field, particularly the Dalia field.
The field was discovered in the 1990s and remains one of Angola’s largest oil assets. Currently, up to 120 million barrels but the investment will push its production potential to some 500 million barrels.
Under the new terms, the government will own 90% of the production share from the mature field while the investors have the remaining 10%.
Similarly, Shell has returned to Angola after a 20-year break, with the recent signing of a preliminary agreement with ANPG to explore Block 33 in the Congo Basin.
Contracts have also been signed between Sonangol and local players like Acrep and Red Sky Energy for Block 24 in the Kwanza Basin.
These blocks are expected to support future drilling and boost the country’s production.
In all of these, Azule’s expansion projects stand tall as the icing on the cake.
Its Agogo platform alone when fully utilised can increase the nation’s oil output by up to 175,000 barrels per day.
It also has several projects that will come online in the near future.
Beyond oil: Can Angola leverage reforms for a diversified energy future?
Moreover, Angola is increasingly shifting its focus to natural gas as oil ambitions have proven shaky in recent years, despite new projects coming online.
The country holds 38 trillion cubic feet (tcf) of proven natural gas reserves and another 56 tcf of prospective resources.
In 2013, it took a bold step toward developing this largely untapped resource with the launch of the $12 billion Angola LNG project in Soyo.
The project is jointly owned by Chevron, TotalEnergies, Sonangol, and Eni was designed to monetize flared associated gas from offshore operations to meet both local demand and exports.
Built with a single-train capacity of 5.2 million tons per year, the LNG plant has struggled with limited feedstock supplies.
To address this, Angola launched a new Gas Master Plan earlier this year, aimed at closing the supply gap by unlocking non-associated gas reserves.
The $2.4 billion New Gas Consortium project developed by Azule Energy, which covers the Quiluma and Maboqueiro fields, is expected to produce 330 mmscf/d by late 2025 or early 2026.
This will mark Angola’s first non-associated gas project.
Chevron’s Sanha Lean Gas Connection project is also set to deliver an additional 220 mmscf/d over the coming years to the Angola LNG plant.
Sanha made history last year as the world’s first LNG plant to be supplied exclusively by associated gas.
When completed, the project alone is expected to boost the LNG plant’s supply by about 40% over 15 years.
Beyond feeding the LNG facility, gas from these projects will also power the phase 2 expansion of the Soyo power plant, currently under development.
Azule’s planned $5 billion investment will support Angola’s national goal of increasing gas to 25% of the energy mix by 2025, up from the current 10%.
Progress is already evident, highlighted by the company’s discovery of over 1 tcf of gas and 100 million barrels of condensate at Gajajeira-01.
In addition, the Angolan government announced plans to invest $60 billion in oil and gas projects over the next five years.
A significant share of this funding will be allocated to natural gas development, including the drilling of 23 new exploration wells.
This aligns with the country’s Gas Master Plan, which outlines the development of more than 40 gas fields in the coming years.
Ultimately, Azule’s $5 billion bet is more than a single investment but a litmus test of Angola’s ability to turn bold reforms into real, lasting results.
The stakes are high.
Failure to leverage this chance risks returning the country to a cycle of missed opportunities, while success could secure its return as one of Africa’s leading energy hubs.
But in a region where Nigeria is witnessing an uptick in its upstream sector and Libya is fast reclaiming lost ground, Angola cannot afford half measures.
Its comeback story must be about more than attracting capital. It must be about sustaining momentum, diversifying energy opportunities, and proving it can compete with its fiercest rivals.
As Eni’s CEO Guido Brusco put it: “Our mission is to deliver reliable energy while investing in Angola’s long-term growth.”
For Angola, that mission is now a national imperative.
