Angola is set to begin fuel production from its new Cabinda
oil refinery by the end of 2025, marking a major step forward in the country’s
efforts to reduce its dependence on imported petroleum products. The facility,
located in the oil-rich province of Cabinda, is the first refinery built in
Angola since independence and is expected to play a key role in the country’s
energy strategy.
The refinery will begin operations with a processing
capacity of 30,000 barrels per day. In its initial phase, it is expected to
supply around 10 percent of Angola’s domestic fuel needs. A second phase is
planned to expand capacity to 60,000 barrels per day and introduce the
production of higher-value products such as diesel, jet fuel, and gasoline. The
expansion will include the installation of hydrocracking and reforming units.
The project is being developed by Gemcorp, a UK-based
investment group, which holds a 90 percent stake. Angola’s state oil company,
Sonangol, owns the remaining 10 percent and will supply the crude feedstock
required for processing. The first phase of the project, which began
construction in 2020, has faced delays and cost increases due to inflation and
the broader economic impact of the COVID-19 pandemic. The cost of the first
phase has risen from earlier estimates of $473 million to between $500 million
and $550 million.
Angola, despite being one of Africa’s largest crude oil
producers, still imports more than 70 percent of its refined fuel. This
dependence has placed significant pressure on the country’s foreign reserves
and public finances, especially in light of fuel subsidies that have kept
domestic prices artificially low. In 2023, an attempt to reduce subsidies
triggered widespread protests as the cost of transportation and essential goods
soared.
The completion of the Cabinda refinery is a key part of the
government’s broader plan to expand domestic refining capacity, reduce fuel
imports, and eventually cut subsidies. It is expected to improve energy
security, stabilize fuel supply, and ease fiscal pressure by limiting the need
for costly fuel imports.
In addition to the Cabinda project, the government is also
working on two other major refinery initiatives. The Soyo refinery, with a
planned capacity of 100,000 barrels per day, is currently under review due to
issues involving the developer. The larger Lobito refinery project, which is
expected to process up to 200,000 barrels per day, remains stalled as the
government seeks financing to cover a funding gap of approximately $4.8
billion.
Despite these challenges, the Cabinda refinery is seen as
the most advanced and achievable project among Angola’s current refining
ambitions. Government officials have confirmed that commercial fuel from the
plant will begin reaching the market before the end of this year, pending final
commissioning.
Once fully operational and expanded, the Cabinda refinery
could supply more than a third of Angola’s domestic fuel needs. Analysts view
the project as a potential turning point in Angola’s economic diversification
efforts, reducing vulnerability to international price shocks and laying the
foundation for future exports of refined petroleum products to the region.
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