Angola's onshore oil gamble unlikely to pay off

Significance

A BP project will deliver a temporary production boost when it comes onstream later this year, but Angola needs other foreign energy companies to sanction new greenfield developments if it is to avoid output falling below 1 million b/d by 2025.

Impacts

• Declining oil revenues will weigh on debt sustainability, raising the risk of Angola defaulting when its debut Eurobond matures in 2025.
• Tourism will suffer fallout from government plans to allow drilling in national parks, delaying the sector's post-COVID-19 recovery.
• The oil sector's decline is an existential threat to the ruling People's Movement for the Liberation of Angola (MPLA)'s political dominance.