Poliedro Oil Corporation Executive Director, Tchitalene De Almeida, spoke to Africa Energy Series: Angola 2020, about national oil companies (NOCs) as primary drivers of socioeconomic development in Angola.
What have been the key developments in Blocks 2/05, in which Poliedro holds a 12% stake?
The key developments of Block 2/05 over the last 12 months have been the synergies exercised between the operator and the partners of the contractors’ group in the management of the Block. The actions undertaken in recent years are essentially aimed at adopting mechanisms or strategies for optimizing existing reserves and making the asset profitable. This involves reducing the production cost of the barrel, which has been the Achilles’ heel for Block 2/05’s performance. Special attention must be paid to rational cost management, for example minimizing OpEx per barrel as much as possible, so that there is a basis for the sustainability of operational results.
How have current market conditions affected the evaluation of new exploration opportunities in Angola, specifically marginal field development?
The current economic situation, accentuated by the drop in oil prices on international markets, production cuts, as well as COVID-19, is having a negative and direct impact on the new windows of opportunity for exploration in Angola and the development of marginal fields. With the oversupply of oil and the temporary cancellation of air and maritime borders, world economies are in a state of recession and Angola is no exception. Therefore, for the time being, expectations are not very optimistic about the development of marginal fields until the full functioning of economic activities is restored.
What is the capacity of NOCs in Angola and in Africa to contribute to economic growth and nation-building?
NOCs can be the main powers and engines of growth and subsequent socioeconomic development in Africa, and particularly in Angola. NOCs can play a major role in the economic landscape in Africa and in Angola in particular, since a large part of GDP comes from these economic units. However, NOCs must be seen as strategic allies of governments for the growth and economic development of oil-producing African countries. To this end, states should create legal instruments aimed at providing fiscal incentives to reduce the resulting tax burden on NOCs. Furthermore, NOCs can provide great support in the context of social intervention plans with regard to the improvement of infrastructures, construction of schools, hospitals and professional training centers. In Angola, for example, special attention should be given to the north of the country, notably the province of Zaire (specifically the city of Soyo), as well as the province of Cabinda, from where the largest revenue contributions for the general state budget originates.
Given the growing demand for clean and renewable energies by consumers, governments and NGOs, how can NOCs position themselves for a sustainable future?
The exploitation of renewable energies (hydropower, solar, biomass, wind and geothermal) is of extreme importance. They aim to guarantee a cleaner planet and are non-exhaustive by their nature. However, investing in these niche resources remains a complex challenge globally. Statistics show that we consume only 13-14% of renewable energy. Given growing consumer demand for a sustainable future, governments, NGOs and NOCs should position themselves rationally and strategically by investing in renewable energies that are economically more viable. For example, hydropower is currently more exploited because it is cheaper. As we know, the industrialization of countries depends on electricity and a large part of Africa is bathed by rivers, which represents an opportunity for sustainable development.
What are Poliedro’s primary objectives for 2020?
For 2020, Poliedro S.A. aims to maintain its operational activities related to the various projects, namely: the Banje-Angola Project, the petrol station and the activities of Block 2/05, for which the operator Somoil is primarily responsible. Other objectives include to expand refueling stations in the capital and inland; to increase business volume, maximize profits minimize costs; to invest in the company’s image and give greater visibility abroad; to become a reference company in the oil sector in Angola and in other markets where we are present; and to provide professional training for the company’s staff.