Africa

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Algeria is among the leading oil producers and exporters worldwide. Amounting to over 12 billion barrels, its proven crude oil reserves are the third-largest in Africa after those of Libya and Nigeria. In 2021, crude oil production stood at around 1.4 million barrels per day. Oil and fossil fuels dominate Algeria's industrial sector, create significant export value, and impressively contribute to the economy. In fact, oil revenue is the main source of income for the country and accounts for nearly 25 percent of the GDP. Algeria is essentially dependent on the hydrocarbon industry, and at the same time vulnerable to the volatile oil market.

The first oil discoveries in Algeria date back to 1956. While French colonizers initially had control of local production, Algeria started to directly manage its oil resources after the 1962 War of Independence. During the process of nationalization of the oil industry, the state-owned enterprise Sonatrach was founded in 1963. Sonatrach has, since then, controlled all the processes of oil production, including exploration, extraction, refining, and marketing. This has allowed them to become one of the largest oil companies in Africa. In addition, Algeria solidified its role as a main oil producer and exporter in the international landscape by joining the Organization of the Petroleum Exporting Countries (OPEC) in 1969.

Hydrocarbons massively contribute to the Algerian foreign trade, as oil and mineral fuels account for around 95 percent of the total exports. Nevertheless, after peaking in 2008, the value of petroleum products exported from Algeria has been declining in recent years. This gradual fall was due in part to decreasing production, fluctuating oil prices, infrastructure issues, as well as increasing domestic consumption. In 2020, the coronavirus pandemic caused a severe global crisis with a dramatic decline in oil prices worldwide. That year, crude oil exports from Algeria fell by around 30 percent compared to 2019.

The decline in petroleum exports substantially affected the Algerian economy. Since the discovery of oil, the country has been relying on hydrocarbons. The high oil rents resulted in generous government subsidies, especially within the energy sector. Despite the growing service focus and attempts to increase agricultural production, the economy is still heavily dependent on oil resources. For instance, crude oil accounts for approximately 34 percent of the primary energy produced and, together with natural gas, makes up around 88 percent of the country’s energy mix. Algeria has, however, ambitious renewable energy targets, with the aim that clean energy would represent 40 percent of the power generated by 2030.

Algeria's national oil and gas company, Sonatrach, dominates the country's hydrocarbon sector, owning roughly 80 percent of all hydrocarbon production. By law, Sonatrach is given majority ownership of oil and gas projects in Algeria. 

Algeria had 12.2 billion barrels of proven oil reserves, as of January 1, 2013. All the proven oil reserves are held onshore, since there has been limited offshore exploration. The country produced 1.87 million bbl/d of total petroleum liquids in 2012 which includes crude oil, condensate, natural gas liquids, and refinery processing gain. The three largest oil fields, Hassi Messaoud, Ourhoud, and Hassi Berkine, contribute to about half of total crude oil production, which averaged 1.25 million bbl/d in 2012. 

Most Algerian crude oil exports, roughly 85 percent, are sent to Europe and North America. The United States is the single largest destination; however, U.S. imports of Algerian crude oil have substantially declined over the last five years. 

Angola is among Africa’s largest oil producers. Its current challenge is how to reverse the decline in oil production observed in the last decade. To recover oil output also means getting the economy back on track, as the country’s finances rely strongly on this resource. Around one third of Angola’s GDP is rooted in the oil industry. Crude oil, natural gas, and refined oil account for almost all national exports. As of 2020, unexpected circumstances jeopardized the Angolan oil industry. The coronavirus (COVID-19) pandemic led to a decrease in global demand, while the crude oil prices declined sharply amid an international price war.

Angola produced 1.3 million barrels of oil per day in 2020, the lowest level in the last decade. For comparison, in 2010, production reached a peak of around 1.8 million barrels daily. Though the African country still hast vast oil reserves, there is a lack of private and public investment. To change this scenario, the Angolan government released a strategic plan for the exploration of hydrocarbons during 2020-2025, which includes bidding on 50 oil blocks, and investments reaching 800 million U.S. dollars. Moreover, the Angolan parliament has recently approved new tax incentives to boost the oil industry in the country.

Besides the stimulus to increase exploration and production of crude oil and natural gas, Angola also developed a strategy to support the domestic oil refining sector. After all, despite the vast production of oil, the country constantly struggles to supply the national demand for refined products. In 2020, around two million metric tons of refined petroleum products were imported to fuel the local consumers. The supply issue is due to the fact that Angola has only one active refinery in Luanda, with the capacity to produce 65 thousand barrels of refined oil per day. Additionally, 15 thousand barrels of fuel are generated in the Malongo-Cabinda area. To change this situation, several new refineries are planned, and Angola expects to increase the oil refining capacity to 425 thousand barrels per day in 2025.

Among further efforts to revitalize the oil sector, Angola plans to attract more foreign investment. In the first quarter of 2021, inflows of foreign direct investment in the petroleum industry amounted to 1.6 billion U.S. dollars. Currently, major international oil companies dominate the sector, with a market share of over 90 percent in the production of crude oil. The state oil firm Sonangol holds a roughly two percent share of the crude oil market.

Cabinda 

The crude oil is produced in Angola. It is loaded from the ChevronTexaco-operated Malongo Terminal, which can accommodate Very Large Crude Carrier (VLCC) loading. Nemba also loads at Malongo, and combined cargoes of Cabinda and Nemba on VLCC’s are possible. The typical cargo size is 950 thousand barrels, but alternate cargo sizes can be arranged with planning. The minimum cargo size is 600 thousand barrels. The production rate of the contributing fields is approximately 270.000 b/d. This medium sweet Angolan crude represents commingled material from the Takula and Malongo systems. Its API gravity is 32.0 with a sulfur content of 0.12%. The typical Cabinda output from Malongo is approximately 350,000 b/d. The current bbl/mt conversion factor for Cabinda crude oil is 7.28. Other specifications: Pour point 16 °C, TAN 0.06 mg KOH/g, Nickel 16. wppm, Vanadium 2.2 wppm, Visc. (50°C) 9.90 cSt.

Hungo

The crude is produced from the Hungo and Chocalho fields. The operator is Exxon Mobil, and the loading port is Kizomba A FPSO offshore Angola. Standard cargo size is 1 million bbl (with the option to increase/ decrease). Crude production is 210,000 bbl a day. Hungo Blend is classified as a medium density, medium sulphur, and medium TAN crude. Specifications are API 28.5°, S.G. 0.8844 (conversion rate 7.06), Sulphur 0.71 mass%, Pour point -36°C, TAN 0.43 mg KOH/g, Nickel 19.0 wppm, Vanadium 17.0 wppm, Visc. (40°C) 12.9 cSt. Hungo Blend was formerly known as Kizomba A. 

Kissanje

The grade is produced from the Kissanje and Dikanza fields and the operator is ExxonMobil. The loading port is Kizomba B FPSO offshore Angola. Standard cargo size is 1 million bbl. Production is 250,000 bbl/day. Kissanje Blend is classified as a medium density, medium sulphur, and medium TAN crude. Specifications are API 28.2°, S.G. 0.8858 (conversion rate 7.06), Sulphur 0.44 mass%, Pour point -21°C, TAN 0.64 mg KOH/g, Nickel 16.1 wppm, Vanadium 5.7 wppm, Visc. (40°C) 15.62 cSt. The first cargoes moved at the end of July 2005.

Nemba

The grade is produced offshore Angola and loads at the Malongo terminal, where Cabinda also loads. The typical cargo size is 950,000 and production typically totals 140,000 b/d.

Nemba is categorized as a low density, low sulfur crude. Specifications are API 38.6°, Sulfur 0.22 mass%, Pour point -6.7°C, TAN 0.18 mg KOH/g, Visc. (40°C) 4.15 cSt, Vanadium 3.83 ppm. Production began at South Nemba in June 1998, with North Nemba following in August 2001. 

Dalia

The grade is produced from Block 17 offshore Angola and the operator is Total. The loading port is the FPSO Dalia offshore Angola. Standard cargo size is 950,000 barrels. Production is 240,000 b/d. Daila is classified as a medium density, low sulfur, and medium TAN crude. Specifications are: API 23.6°, Sulfur 0.50 mass%, Pour point -45°C, TAN 1.54 mg KOH/g, Nickel 24 wppm, Vanadium 11 wppm, Visc. (20°C) 117.2 cSt. First cargoes moved in December 2006. 

Palanca

The crude oil is produced in Angola from five different concessions. It is loaded from the Total operated Palanca Terminal, which can accommodate Very Large Crude Carrier (VLCC) loading. The typical cargo size is 985 thousand barrels; however, alternate cargo sizes can be arranged with advance planning. The production rate of the contributing fields is approximately 140 thousand barrels per day. Specifications are API 37.2°, S.G. 0.8388 (conversion rate 7.5), Sulphur 0.18 mass%, Pour point 10 °C, TAN 0.03 mg KOH/g, Nickel 1.4 wppm, Vanadium 1.1 wppm, Visc. (40°C) 4.52 cSt.