Angola Plans First Output at Cabinda Oil Refinery by Year-End

Angola’s planned 30,000-barrel-per-day Cabinda oil refinery, the first to be built since independence a half-century ago, will begin producing fuel by year-end, the Southern African country’s oil and gas minister announced on Monday. This groundbreaking project represents a historic milestone as Angola’s second oil refinery and a crucial step toward reducing the nation’s heavy dependence on costly fuel imports.

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The project will help make sub-Saharan Africa’s No.2 crude producer significantly less dependent on imported refined products amid government efforts to eliminate fuel subsidies that have triggered deadly protests across the country. The timing of the refinery’s completion is particularly critical as Angola grapples with social unrest and economic challenges stemming from its paradoxical position as a major oil exporter that imports most of its refined fuel products.

“Today we can confirm that the Cabinda refinery is entering its decisive phase and that by the end of the year, Angola will have the first commercial derivatives produced at this unit,” Diamantino Azevedo, the oil and gas minister, said at an inauguration ceremony also attended by Angola’s president. The minister emphasized that the project represents much more than industrial infrastructure, describing it as “proof that with political leadership, institutional courage, and technical competence, Angola can produce, transform, and develop its mineral resources while preserving its sovereignty.”

Strategic Partnership Drives Development

Gemcorp, a London-based emerging markets investment firm, is the largest shareholder in the plant, holding a 90% stake, while state-owned oil company Sonangol maintains the remaining 10% shareholding and supplies the refinery with feedstock. The partnership represents a significant public-private collaboration in Angola’s energy sector transformation.

Gemcorp previously indicated that the first phase would supply 5-10% of the country’s fuel needs, providing crucial relief to a nation that currently imports around 72% of its domestic fuel consumption or some 3.3 million metric tons of refined petroleum products each year, according to Sonangol.

The refinery project has been a long time in development, with construction beginning in 2023 after years of preparation including tree-clearing, earth-moving, and demining operations—a critical step in a country still riddled with landmines from decades of civil conflict. The project has created more than 3,300 jobs, with approximately 85% of the workforce being Angolan nationals.

Escalating Costs and Pandemic Impact

Investment for the first phase has reached $500 million to $550 million, Gemcorp told Reuters last year, significantly higher than initial estimates of $473 million as costs rose due to the COVID-19 pandemic and global inflation. The cost overruns reflect the broader challenges facing major infrastructure projects across Africa during the pandemic period.

The financial structure includes a $335 million credit facility mobilized by multiple African financial institutions, with the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) leading the financing consortium. An additional $138 million was raised through equity sponsors, demonstrating strong confidence in the project’s viability.

Advanced Technology and Production Capabilities

The Cabinda refinery will utilize advanced processing technology designed to handle Angolan Cabinda crude oil and produce diesel, jet fuel, heavy fuel oil, and naphtha. The first phase includes a crude distillation unit, desalinator, kerosine treating unit, and supporting infrastructure, along with a 1.2-million-barrel storage terminal and connecting pipelines.

Construction is currently 60% complete, with commissioning expected in November 2024 and crude oil processing scheduled to begin in February 2025. The refinery is designed with 24 fiber pairs—well above the typical 8-16 pairs in most existing systems—providing substantially higher processing capacity and reliability.

Currently, the facility employs 2,800 people on-site, with 85% being Angolans. The project includes a comprehensive training program designed to prepare approximately 180 workers through next year, ensuring a fully capable workforce when operations commence.

Ambitious Expansion Plans

A second phase is expected to take crude processing capacity up to 60,000 barrels per day and bring a diesel and jet fuel-producing hydrocracking unit online. This expansion, projected to begin 1-2 years after the refinery starts operation, would nearly double the current processing capacity and significantly increase Angola’s domestic refining capabilities.

The second phase will increase the refinery’s contribution to national fuel supply to approximately 20% of demand, representing a substantial step toward energy independence. The expansion will include advanced production capabilities for gasoline, diesel, and gas, positioning the facility as a major regional refining hub.

Funding for the second phase has not yet been finalized, with Gemcorp CEO Atanas Bostandjiev indicating that a final decision is expected in April or May 2025 once the plant becomes operational. The company is exploring various financing options and partnership opportunities to support the expansion.

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Critical Context: Angola’s Energy Paradox

Angola’s refinery development occurs against the backdrop of a striking economic paradox. Despite being Africa’s second-largest oil producer and generating $31.4 billion from oil exports in 2024, the country imports nearly 80% of its refined petroleum products. This inefficient system, as Bostandjiev noted, sees “Angola currently exports 98% of its crude and imports almost 100% of its refined products from Europe.”

The country’s heavy dependence on fuel imports has created significant fiscal pressures. Economic data shows that fuel subsidies accounted for approximately 4% of GDP in 2024, equivalent to the budget for 1,400 infrastructure and development projects, of which 500 had to be suspended due to fiscal constraints.

The government’s efforts to reduce these subsidies as part of International Monetary Fund-encouraged reforms have sparked deadly protests that killed at least 22 people in July 2025, highlighting the social tensions surrounding energy policy in the oil-rich nation.

Broader Refinery Development Strategy

The Cabinda project is part of Angola’s comprehensive strategy to develop multiple refining facilities across the country. However, other projects face significant challenges. Oil and Gas Minister Azevedo announced that construction of the proposed 100,000 bpd Soyo refinery was under review due to constraints presented by the private developer, the U.S.-led Quanten Consortium.

Meanwhile, the 200,000 bpd Lobito refinery faces a massive $4.8 billion funding shortfall. Sonangol is currently in talks with Chinese and European banks, including the Industrial and Commercial Bank of China, Société Générale, Standard Chartered, and Afreximbank, to overcome the financing gap. The Lobito project, when completed, will become Angola’s largest refinery with a total investment of $6.6 billion.

Joaquim Kiteculo, Chief Executive of Sonangol Refining, expressed confidence about the financing, stating: “We are not only dealing with Chinese banks; we are looking for other alternatives as well. We are confident the financing will be raised and the refinery will go ahead.” Construction is expected to begin in 2026, with operational startup targeted for 2027.

Economic Impact and Regional Significance

The successful completion of the Cabinda refinery will mark a transformational moment for Angola’s energy sector and broader economy. The facility will provide a local source of essential fuels, reducing the country’s vulnerability to international price fluctuations and supply chain disruptions.

Beyond domestic impact, the refinery is positioned to serve regional markets. Gemcorp officials have indicated that the facility could export some fuel products to the Democratic Republic of the Congo in later phases, potentially establishing Angola as a regional refining hub.

The project also represents a significant step toward economic diversification for Angola, which remains heavily dependent on oil exports that account for 28.9% of GDP and 95% of total exports. The refinery development aligns with broader government efforts to add value to the country’s natural resources rather than simply exporting crude oil.

Workforce Development and Local Content

A key feature of the Cabinda project is its emphasis on local workforce development and technology transfer. The refinery has created substantial employment opportunities, with the construction phase alone generating over 3,300 jobs for local workers.

Training programs are preparing 5,000 Angolans for refinery-related jobs in mechanics, electrical work, welding, and information technology. This comprehensive skills development initiative ensures that Angolans will operate and maintain the facility, contributing to long-term technology transfer and capacity building.

The project’s focus on local content extends beyond employment to procurement and services, with significant portions of construction materials and support services sourced from Angolan suppliers where possible.

Environmental and Social Considerations

The refinery development has incorporated environmental safeguards and community engagement measures. The project required extensive environmental impact assessments and adherence to international standards for industrial development in coastal areas.

Given Cabinda’s location in an ecologically sensitive coastal region, special attention has been paid to marine environment protection and waste management systems. The facility includes advanced environmental control systems designed to minimize emissions and waste discharge.

Future Outlook and Strategic Importance

The Cabinda refinery represents more than an industrial project—it symbolizes Angola’s aspirations for energy independence and economic sovereignty. Minister Azevedo emphasized this significance, describing the facility as proof that Angola can “produce, transform, and develop its mineral resources while preserving its sovereignty.”

As global energy markets evolve and decarbonization pressures mount, Angola’s refinery development strategy positions the country to maximize value from its oil resources during the transition period. The domestic refining capacity will provide greater energy security while reducing the fiscal burden of fuel imports.

The successful completion of the Cabinda project will serve as a model for other African oil-producing nations seeking to develop downstream capabilities. The public-private partnership structure and financing approach could be replicated across the continent as countries work to add value to their natural resource exports.

Conclusion: A Transformational Investment

Angola’s Cabinda refinery project represents a pivotal moment in the country’s economic development journey. After half a century of exporting crude oil while importing refined products, the nation is finally developing the infrastructure necessary to capture more value from its natural resources.

The $550 million investment, while significant, pales in comparison to the long-term economic benefits of reduced import dependence and enhanced energy security. As the facility prepares to begin production by year-end, it will mark not just the start of commercial operations, but the beginning of a new chapter in Angola’s energy independence story.

With additional phases planned to double capacity and other refineries in development, Angola is positioning itself to become a net exporter of refined products, transforming from an importer dependent on foreign refineries to a regional refining hub serving both domestic and export markets.

The Cabinda refinery project is expected to begin commercial production by the end of 2025, marking a historic milestone as Angola’s first new refinery since independence in 1975.

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By: Montel Kamau

Serrari Financial Analyst

3rd September, 2025