Angola is set to formalize an exclusive negotiation agreement with Shell that grants the oil major the right to open talks on blocks 19, 34 and 35, and several ultra-deep water areas off the country’s Atlantic coast. The announcement by Angola’s national oil and gas agency, ANPG, marks one of the most significant upstream investment signals in the country in recent years.
Angola is ranked as Sub-Saharan Africa’s second-largest crude oil producer after Nigeria, and has for decades relied on hydrocarbons for the bulk of its government revenue and export earnings. With production having slipped below the one-million-barrel-per-day mark, according to recent reports, the Luanda government faces the dual challenge of arresting decline in its legacy fields while attracting fresh investment into frontier waters.
The new agreement with Shell is not a production contract in itself but grants the company exclusive rights to negotiate terms over the designated blocks. This distinction matters: the scale and timing of exploration, appraisal and eventual development will depend on Shell’s appraisal outcomes, fiscal terms, and government approvals. By entering into exclusive negotiations, Angola signals confidence to other potential investors that it intends to streamline access and reduce upstream uncertainty.
From the vantage of Angola’s broader energy policy, the deal comes after a spate of reforms aimed at reviving the upstream sector. The government, through ANPG, has been modernizing licensing frameworks, boosting transparency, and extending exploration incentives, all in an attempt to reverse decades of underinvestment and field maturity issues. Shell’s return after an absence of 20-plus years in Angola is emblematic of changing investor sentiment, at least in gesture if not yet in drilling commitments.
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What this means for Angola’s sustainability trajectory and Africa’s energy transition is layered. On one level, successful offshore exploration could restore production, generate foreign-exchange revenue, and provide state budgets with resources to invest in public services, infrastructure and diversification away from oil dependency. But on another level, it underscores the tension between fossil-fuel reliance and global decarbonization pressures. Angola must navigate a future where upstream projects face growing scrutiny from financial markets, stakeholders and climate policy frameworks.
In practical terms, if Shell moves from negotiation to contract, appraisal and ultimately development, Angola could see new investment capital flow into its offshore belt, potentially access technologies that reduce unit cost and improve recovery factors, and position itself strongly in mid-decade production forecasts. For Shell, the appeal lies in ultra-deepwater frontier acreage where higher risk meets the prospect of higher returns and a long-life production asset in a country with established export infrastructure and a track record of large-field developments.
Yet the path ahead is not straightforward. Ultra-deepwater exploration is inherently capital-intensive and vulnerable to shifts in commodity prices, investor sentiment and technical challenges. Angola’s ability to capture value will depend not only on the outcome of exploration but also on the fiscal terms, local content rules, environmental and social governance frameworks and the speed of execution. For a country where oil historically accounts for more than 80 % of government revenue, ensuring the new clause of value capture and institutional capacity will matter deeply.
Across Africa, the deal offers a signal: major international oil companies remain interested in the continent’s offshore frontier despite the growth of renewables and energy-transition discourse. Countries such as Namibia, Mauritania and Senegal have attracted attention for their offshore potential; Angola’s new arrangement may reinforce competitive pressure on regulatory regimes across the region.
For policymakers in governments reliant on fossil-fuel exports, the message is clear: to attract investment you must combine geological prospectivity with regulatory clarity, fiscal competitiveness and governance credibility.
Angola’s ambitions must be balanced with its broader socio-economic objectives. Revenue from new oil production must eventually be directed into diversifying the economy, upgrading domestic refining, developing downstream capacity, and investing in renewable energy and natural-resource governance. Without that, new production risks prolonging resource dependency rather than advancing resilience.
As the signing date approaches, all eyes in the energy industry will be on Luanda and Shell: will this negotiation translate quickly into a production-sharing contract? Will the deal trigger further bids from other majors? And crucially, will it accelerate Angola’s strategy to re-assert itself not just as a leading oil producer in Africa, but as a country capable of leveraging its resource base for sustainable, diversified development?
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In the coming months, the contours of this agreement and its downstream implications will shape how Angola, and possibly, how Africa’s fossil-fuel frontier, navigates the transition era.
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