Faith Nyasuguta
After decades of relying heavily on imported fuel, Angola is preparing for a historic shift. The long-awaited Cabinda oil refinery, the country’s first new plant since independence nearly five decades ago, will begin producing fuel before the end of 2025, according to Oil and Gas Minister Diamantino Azevedo.
The facility, located in Cabinda province, will initially process 30,000 barrels of oil per day, making it Angola’s second refinery. Officials say this project is designed to ease the country’s dependence on costly imports, which currently make up about 72% of national fuel consumption – roughly 3.3 million metric tons a year. The refinery is also expected to cushion the public from the impact of the government’s gradual removal of fuel subsidies, a move that has triggered violent protests in the past.
“By the end of the year, Angola will have the first commercial derivatives produced at this unit,” Azevedo said during the inauguration ceremony, which was attended by President Joao Lourenco.
The $500 to 550 million project has been spearheaded by London-based investment firm Gemcorp, which holds the majority stake. State-owned Sonangol has a 10% share and is supplying the crude feedstock. Gemcorp has indicated that the first phase of production could meet up to 10% of domestic fuel demand.
Looking ahead, expansion plans are already on the table. A second phase of the Cabinda project will double capacity to 60,000 barrels per day and add a hydrocracking unit, enabling the production of diesel and jet fuel. This will make the facility one of the most strategic assets in Angola’s downstream sector.
The Cabinda refinery is not Angola’s only project. The government is also reassessing other stalled or struggling ventures. A proposed 100,000 bpd refinery in Soyo is under review after difficulties with its U.S.-led developer, Quanten Consortium. Meanwhile, the much larger Lobito refinery, designed for 200,000 bpd, faces a massive $4.8 billion funding shortfall. Azevedo announced that construction there will resume only after a thorough review and a cost-reduction plan.
While downstream ambitions look promising, Angola faces uphill battles on the crude production side. Output slipped below one million barrels per day in July 2024, the lowest since March 2023, highlighting the difficulties facing Africa’s second-largest oil producer. The situation has been made even more complex by Angola’s decision to exit OPEC in late 2023 following disagreements over output quotas.
To reverse the decline, Angola has been working hard to attract new foreign investment. Equinor ASA and Chevron Corp. have stepped up exploration and development efforts, while TotalEnergies approved a $6 billion project last year. Despite these initiatives, Minister Azevedo has repeatedly warned that restoring production growth remains the government’s “biggest challenge.”
For now, however, the launch of the Cabinda refinery offers a glimmer of optimism. It signals a step toward greater energy independence, the creation of jobs, and a potential reduction in the painful reliance on foreign fuel supplies. For Angolans weary of rising prices and economic shocks, the refinery represents not just barrels of oil, but a symbol of long-overdue self-reliance.
RELATED:
