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The volume of service contracts awarded to Angolan companies in the oil sector has already exceeded 14 billion dollars (13 billion euros) this year, according to the national concessionaire.
The data was provided by João Santiago, the local content technician of the National Agency of Petroleum, Gas, and Biofuels (ANPG), during a workshop on Local Content, focused on the theme “The Foundation for Sustainable Growth of Angolan Entrepreneurship.”
According to João Santiago, in 2022, the awarded contracts reached nine billion dollars (8.4 billion euros), representing an increase of five billion dollars (4.6 billion euros) in values for this year so far.
In his address, the Minister of Mineral Resources, Petroleum, and Gas, Diamantino Azevedo, mentioned that the implementation of the Presidential Decree of October 20, 2020, known as the Local Content Law for the Oil Sector, is one of the government’s foundations to ensure the participation of Angolan professionals and technicians and the inclusion of national entrepreneurs throughout the value chain of the oil sector.
Diamantino Azevedo highlighted that over the years, to reduce dependence on foreign technical experts and services provided by foreign companies, the Government of Angola has approved various legal measures, collectively known as the “Angolanization” process of the oil sector, initially focusing on the recruitment, training, and development of national labor.
The minister also emphasized that with the development of the national oil industry, transitioning from shallow water exploration and production to deeper waters, the technical complexity and knowledge required have increased, leading to continuous refinement of Local Content regulations.
“Thus, the definition and requirements of Local Content have evolved, and as a result, several new legal measures have been approved, aiming not only at the integration of the workforce but also at the provision of services by local companies,” he said.
Local Content encompasses any activity in the oil sector that involves the participation of Angolan entrepreneurs and citizens, Angolan law-based companies, the use of goods and services produced in Angola, and the recruitment, integration, training, and development of the Angolan workforce in a consistent and sustainable manner, explained the minister.
The legislation establishes three distinct regimes for the participation of Angolan companies: the exclusivity regime, which reserves services exclusively for Angolan companies; the preference regime, where Angolan companies with equal technical and financial capacity have priority over others; and the free competition regime, which involves more complex and financially demanding activities.
The Minister of Mineral Resources, Petroleum, and Gas emphasized that both operating companies and service providers must give priority to contracting local companies for services covered by the exclusivity regime, based on a list published annually by ANPG.
According to the minister, the biggest challenge in implementing this law was reconciling it with the Presidential Decree of April 2018, which regulates the procurement processes for goods and services, especially for contracts with a value below five million dollars (4.6 million euros).
In statements to the press, the event’s spokesperson, Maura Nunes, mentioned that six major challenges have been identified, related to certification, operationalization, capacity building, liquidity, access to financing (which is a significant issue), and taxation.
Maura Nunes assured that there are opportunities and competence among national companies, but ways to leverage them need to be analyzed. She also emphasized that the presence of Angolan companies in the sector has been increasing, both in preference and exclusivity regimes, with the latter accounting for 5% of all approved contracts.
“This increase is gradual, and we need to address the various challenges we face so that this number continues to grow,” observed Maura Nunes.
