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What’s Next for Nigeria and Angola After the Oil Sector’s Wild Ride in 2022?

Last year was a wild ride for the global oil industry, with the Russia-Ukraine conflict driving prices above $100 per barrel for the first time since 2014 and forcing a wholesale rearrangement of supply chains.

Last year was a wild ride for the global oil industry, with the Russia-Ukraine conflict driving prices above $100 per barrel for the first time since 2014 and forcing a wholesale rearrangement of supply chains.

It was also a significant year for the African oil industry specifically, as it saw Nigeria and Angola swap places on the list of the continent’s two largest oil producers for the first time in five years. Nigeria ceded the top position to Angola, moving into second place as a result of its failure to curb production losses, while Angola took the lead, even as it faced its own difficulties in the upstream sector.

As a result, both countries entered 2023 under a certain amount of pressure. The African Energy Chamber (AEC) discusses the impact of that pressure in its soon-to-be-released “The State of African Energy Q1 2023 Report.”

Meanwhile, the AEC offers additional insight into Africa’s two largest oil producers here.

Nigeria: New President and Improved Upstream and Downstream Trends

Nigeria has good reasons to expect a certain amount of change in policies affecting the oil industry, one of the mainstays of the national economy, in 2023. After all, the term limits imposed by the constitution bar President Muhammadu Buhari from seeking another four years in office. As a result, the presidential vote that took place in February inevitably led to the election of a new leader, Bola Ahmed Tinubu, who is due to take up his post on May 29.

Tinubu is Buhari’s successor, insofar as he is a member of the same party. Both are members of the All Progressives Congress (APC). Nevertheless, since no two human beings are exactly the same, and no two presidents face exactly the same circumstances, it can be assumed that Tinubu’s oil policy will not be a mere carbon copy of Buhari’s.

There are good reasons to make this assumption. One of them is that Tinubu’s inauguration is scheduled to take place just one week after the commissioning of the Dangote Refinery, the 650,000-barrel per day (bpd) oil-processing plant under construction in the Lekki Free Zone near Lagos. This facility, which will be the largest single-train refinery in the world, is expected to provide most of the momentum Nigeria needs to shed its long-standing dependence on imported petroleum products within the next few years. At the very least, it will reduce reliance on imported fuels while state-owned Nigerian National Petroleum Co. Ltd (NNPCL) waits for repairs on its own refineries, with a combined throughput capacity of 445,000 bpd, to be completed, despite concerns about additional delays. In turn, this reduced need for imports should offer the new president some relief from some of the issues that have plagued Buhari’s administration, such as the expenses and logistical difficulties involved in transporting large volumes of fuel into the country from outside.

Another reason to assume that Tinubu will make different policy decisions is that conditions are also shifting in the upstream sector. As detailed in the “State of African Energy Q1 2023 Report,” Nigeria does appear to be making some headway with respect to reducing crude oil production losses due to theft, sabotage, and pipeline vandalism. Following the decision to start working more closely in collaboration with host communities to protect infrastructure, the country is on track to bring output levels back up to the 2021 level of 1.3 million bpd this year, up from 1.18 million bpd in 2022. (This figure was surprisingly low — and not just because it was so far below Nigeria’s OPEC+ quota, which topped out at 1.8 million bpd, but also because Nigeria actually had an incentive to produce far more for much of the year, since the Russia-Ukraine conflict kept world crude prices high.) So barring unforeseen calamities, the new presidential administration looks set to gain at least some relief from worries about falling production. It remains to be seen, though, how long the country will take to bring oil production back up to the 2020 level of 1.5 million bpd.

In short, Nigeria appears to be headed towards lower fuel imports and higher oil production this year.

Angola: Stabilizing Oil Production in the Short Term

Meanwhile, Angola is on a somewhat different trajectory. Unlike Nigeria, the country does not appear to be heading for significant changes in policies affecting the oil sector due to political turnover. Angola’s last presidential vote took place in 2022 and resulted in the re-election of João Lourenço to a second term.

Like Nigeria, though, Angola is facing shifts in the upstream sector of the oil industry. In Nigeria’s case, these changes took the form of production losses due to theft, sabotage, and infrastructure damage —  and they have been reversible to some extent, with greater assistance from host communities. But in Angola’s case, they were taking the form of a long-term downturn in output that began in 2015. This trend has been especially evident at such existing fields as Takula, Lianzi, and Kuito, which have been under development for decades.

Nevertheless, as “The State of African Energy Q1 2023 Report” notes, Angola has succeeded in arresting the fall and stabilizing oil output levels within the last two years thanks to the launch of new projects. These have included Kaombo North and the Eastern and Western hubs at Block 15/06, operated by the Italian major Eni, as well as CLOV Phase 2 and Dalia Phase 3 at Block 17, operated by TotalEnergies of France. With crude flowing from these new deepwater sites, Angolan production averaged 1.13 million bpd of oil in 2021 and remained steady at 1.15 million bpd in 2022. It is likely to stay at the same level in 2023, averaging 1.15 million bpd.

There could be some additional increases beyond 2023 as more new upstream projects are launched, but these may not be long-term in nature. (Nor will they be enough to put the country in a position to fill its OPEC+ quota in full; like Nigeria, Angola has been undershooting its production allowances for quite some time.) Finance Minister Vera Daves de Sousa did tell Reuters in April that she hoped to see oil output rise in 2024 on the back of new investments. She also stated, though, that next year’s figure would remain under 1.5 million bpd, and that production would stabilize around 1 million bpd after 2024.

Meanwhile, Angola’s oil sector is also — again, like its counterpart in Nigeria — heading for change in the downstream sector. The timing and scope of the change will not be identical, as Angola is looking to build oil-processing plants for its smaller population. But it does have several projects in the works, and the first of these – the 60,000-bpd Cabinda refinery – is due to begin operating in mid-2024. When it does, the country will be able to reduce its dependence on imported fuels.

In short, Angola is set to keep oil production levels stable this year as it gears up to launch new downstream projects.

Additional Insight

Upstream production trends and downstream construction are not the only factors driving the oil industry in Nigeria and Angola. For the AEC’s insights on other developments, including marginal field auctions in Nigeria, read “The State of African Energy Q1 2023 Report,” soon to be available for download at

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