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Angola Marketing
Exports of crude oil have outpaced exports of refined
oil
because refining facilities have not been expanded at the
same rate
as crude oil output. In the late 1980s, all of the oil
produced
offshore (in Cabinda and Block 3) was exported, while the
crude oil
found onshore was refined domestically.
Petrangol's output was about 32,000 bpd in 1985,
sufficient to
meet domestic demand for most products except butane and
jet fuel,
while a large surplus of fuel oil was produced for export
(585,900
tons in 1985). The facilities for bottling propane and
butane were
also expanded at a cost of US$7 million. The capacity of
the
Petrangol oil refinery on the outskirts of Luanda was
increased to
1.7 million tons a year in 1986. In 1987 Sonangol was
exploring the
possibility of having some of its crude petroleum refined
in
Portugal.
The supply of petroleum products for the domestic
market was
controlled by Sonangol and increased 8 percent between
1980 and
1985. Initially, Sonangol shared the market with Shell and
Mobil,
but Sonangol bought out the Angolan subsidiaries of these
companies
in 1981 and 1983. Subsequently, Sonangol also purchased
two
Portuguese companies that bottled gas, gaining a monopoly
over the
distribution of refined products. Among these products,
butane gas
accounted for 65 percent of the total gas consumed locally
and was
used primarily in homes in urban areas. In addition,
Sonangol
distributed gasoline, gas oil, and lubricating oils. Its
greatest
distribution problems were the lack of storage facilities
throughout the country and problems associated with the
domestic
transportation network.
In response to the fall in oil prices in 1986, the
Angolan
government began considering regional cooperation to
protect the
interests of oil suppliers. In that year, Angola was
invited to
join the Organization of Petroleum Exporting Countries
(OPEC).
Although it declared its willingness to act in concert
with OPEC
members to avert the growing crisis in oil prices, Angola
joined
the African Petroleum Producers' Association, which
included four
OPEC members (Algeria, Gabon, Libya, and Nigeria) and
three
non-OPEC oil producers (Cameroon, Congo, and Benin).
Together,
these eight countries produced 188 million tons of oil in
1986,
equivalent to about one-fifth of OPEC's production and 6.4
percent
of world production.
In the late 1980s, the major foreign oil companies
operating in
Angola were American. Chevron, which had taken over Gulf,
owned 49
percent of the shares in the offshore Cabinda blocks,
Angola's
largest production area, where output was fairly stable in
1986 and
1987 at about 200,000 bpd. In 1986 President Ronald
Reagan's
administration pressured American oil companies and
equipment
suppliers to withdraw their interest in the Angolan oil
industry to
protest the presence of Cuban troops in Angola. Chevron
therefore
withdrew 20 percent of its interests from Cabgoc and sold
its
shares to the Italian firm Agip. Conoco, however, rebuffed
this
pressure and became the third American oil company to
begin
operations in Angola in offshore Block 5. Texaco, another
major
operator in Angola, operated in offshore Block 2, near
Soyo, where
it held a 40 percent interest in a production-sharing
consortium.
It also had a 16 percent interest in some of the onshore
fields in
the Congo River Basin.
The United States Congress also banned new
Export-Import Bank
lending and credit insurance for sales to the Angolan oil
industry,
putting American suppliers at a major disadvantage in this
market.
British suppliers waiting to come into the market have
been delayed
because of the reluctance of British banks to offer
long-term or
medium-term credits for such sales. However, France has
entered the
market, granting exceptional credit facilities for
oil-related
sales.
Data as of February 1989
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