Nigeria has long held the title of Africa’s leading oil producer but signs are now suggesting a shift as neighbouring country Angola emerges as a new beacon of attraction for international oil companies (IOCs).

The surge in Angola’s popularity among investors highlights a significant challenge to Nigeria’s once-unassailable dominance in the continent’s oil landscape.

Data sourced from Angola’s National Oil, Gas and Biofuels Agency (ANPG) reveals an increase of 96 percent in investment in Angola’s oil sector between 2022 and 2023.

Over the past five years, investments totaling almost $50 billion have been recorded, with an additional $71 billion planned over the next five years.

This surge in investment underscores the growing confidence of international players in Angola’s oil market.

The aggressive industry reforms undertaken by Angola since 2017 have been instrumental in attracting investors.

These reforms aim to ensure transparency and competitiveness in the oil and gas market, a move that has resonated positively with foreign players.

The introduction of a six-year licensing round in 2019, guaranteeing yearly investment opportunities in exploration for foreign entities, has been a key feature of Angola’s reform agenda.

One of the most recent licensing rounds, covering 12 blocks in the Lower Congo and Kwanza Basins, saw an overwhelming response with 53 bids submitted, indicating the robust interest in Angola’s oil and gas potential.

José Barroso, Angola’s secretary of state for oil and gas, emphasized the country’s commitment to promoting the industry by aggressively pushing bid rounds aligned with national production targets.

Angola’s regulatory flexibility in oil and gas agreements has been another attractive feature for investors. The introduction of risk service contracts in 2020 as an alternative to traditional production-sharing agreements demonstrates Angola’s adaptability to industry dynamics.

Also, reforms such as the Tax Benefits Code enacted in 2022 aim to create incentives for oil companies operating in the country.

The stability and clarity of Angola’s policy framework have been highlighted as key factors driving investment decisions.

Patrick Pouyanne, CEO of TotalEnergies, pointed out the importance of policy consistency, noting that Angola’s stable framework played a pivotal role in TotalEnergies’ decision to invest $6 billion in the country.

While Angola’s star rises in the oil investment landscape, Nigeria faces challenges that threaten its status as Africa’s top oil producer.

Bureaucratic bottlenecks, contracting delays, and security concerns in the Niger Delta region have hindered Nigeria’s ability to attract and retain investors.

The inconsistency in policy making decisions has further exacerbated the situation, prompting some IOCs to explore more stable investment environments like Angola.

As Angola’s oil sector continues to flourish, Nigeria must address the underlying challenges that have dampened investor confidence.

The resurgence of Angola underscores the need for Nigeria to streamline its regulatory framework, enhance security measures, and foster a more conducive environment for oil investment to maintain its position as a regional powerhouse in the oil industry.

Failure to do so could result in further erosion of Nigeria’s dominance, paving the way for Angola to solidify its position as a formidable competitor in Africa’s oil market.

Oil prices declined by 1 percent amid the uncertainty surrounding the global oil market as the world looks to the Middle East for a solution.

Brent crude oil, against which Nigeria crude oil is priced, declined by 83 cents, or 1% to $82.88 a barrel, while U.S. West Texas Intermediate crude (WTI) slipped by 54 cents, or 0.7% to $79.26.

The backdrop of escalating U.S. inflation has cast a shadow over the global oil market as higher borrowing costs threaten to curb economic growth and subsequently suppress oil demand.

Ahead of the Memorial Day holiday, which traditionally marks the beginning of the U.S. peak summer driving season, retail gasoline prices have experienced a downward trend, falling for the fourth consecutive week to $3.58 per gallon on Monday, according to the Energy Information Administration (EIA).

Despite this, the underlying concerns regarding diminished consumer spending and fuel consumption linger, posing challenges for the oil market.

To address potential supply constraints, the U.S. announced plans to sell nearly 1 million barrels of gasoline from a reserve in northeastern states, with bids due on May 28, as disclosed by the Department of Energy.

This strategic move aims to mitigate any disruptions in gasoline supply, further underscoring the delicate balance between supply and demand dynamics.

Furthermore, U.S. diesel prices have witnessed a decline, down 5.9 cents per gallon on Monday to $3.89, according to the EIA. Diesel, a critical component in both the industrial sector and transport, reflects broader trends in economic activity and consumption patterns.

Investor sentiment remains cautious as they await key developments, including the release of Federal Reserve meeting minutes and U.S. oil inventory data from the EIA, scheduled for Wednesday.

Tim Snyder, an economist at Matador Economics, emphasized the importance of inventory data in shaping market sentiment, suggesting that a potential stock draw could provide support to oil prices within a defined range.

While geopolitical events, such as the tragic death of Iranian President Ebrahim Raisi in a helicopter crash on Sunday, have captured global attention, their impact on oil markets has been relatively muted.

The structure of the Brent contract has shown signs of weakening, indicating a softer market sentiment amidst robust supply conditions.

The narrowing of the front-month Brent contract’s premium to the second-month contract to 10 cents, its weakest level since January, further underscores the prevailing market dynamics and supply-demand equilibrium.

The Port-Harcourt refinery with a capacity of 210,000 barrels per day, is poised to begin operations by the end of July.

This announcement comes after several postponements and delays that have plagued the refinery’s revival efforts.

Chief Ukadike Chinedu, the National Public Relations Officer of the Independent Marketers Association of Nigeria (IPMAN), revealed this optimistic timeline on Monday.

According to Chinedu, the refinery’s revival is expected to stimulate economic activities, reduce petroleum product prices, and ensure adequate supply in the market.

The refinery, located in Port-Harcourt, comprises two units: an older plant with a refined capacity of 60,000 barrels per day and a newer plant with a capacity of 150,000 barrels per day.

Despite previous setbacks and delays, the Minister of State for Petroleum Resources, Heineken Lokpobiri, announced the mechanical completion and flare start-off of the refinery in December last year.

However, the refinery’s journey to resuming operations has been marked by challenges and setbacks. It shut down in March 2019 for the first phase of repair works, following the government’s engagement of technical advisors to oversee the refurbishment process.

Despite assurances from NNPC Limited’s Group Chief Executive Officer, Mele Kyari, in March 2024, stating that operations would commence within two weeks, the refinery faced further delays.

In an exclusive interview, Chinedu emphasized the extensive turnaround undertaken at the refinery, suggesting a complete overhaul rather than mere rehabilitation.

He expressed confidence in meeting the July deadline, citing round-the-clock efforts to ensure readiness for operations.

While acknowledging previous delays, Chinedu remained optimistic about the refinery’s imminent revival, emphasizing its potential to enhance competition in the petroleum sector and reduce product prices.

He pointed out that the refinery’s operationalization aligns with the impending commencement of petrol production by the Dangote Refinery, further emphasizing the potential benefits for Nigeria’s energy landscape.

However, Femi Soneye, the Chief Corporate Communications Officer of NNPC Limited, highlighted regulatory approvals from international bodies as the remaining hurdle to the refinery’s operational commencement.

Soneye reiterated that mechanical completion had been achieved, with all necessary infrastructure in place, awaiting regulatory clearance to commence operations.

As Nigeria navigates its energy transition and seeks to bolster local refining capacity, the imminent revival of the Port-Harcourt refinery signifies a significant milestone towards achieving energy sufficiency and economic growth.

With hopes pinned on the July deadline, stakeholders remain vigilant, anticipating the refinery’s long-awaited resurgence.