Angola, long recognized as a powerhouse in African oil production, is now poised to emerge as a significant player in the global natural gas sector following a groundbreaking discovery in the offshore Lower Congo Basin. The exploration well, named “Gajajeira-01,” has uncovered substantial natural gas reserves and associated condensates, signaling a pivotal shift in the country’s energy landscape and offering a new pathway for economic diversification.

The momentous discovery, announced by Azule Energy – a 50-50 joint venture between energy giants BP and Eni – has revealed impressive preliminary estimates of over 1 trillion cubic feet (Tcf) of natural gas and approximately 100 million barrels of condensates. This marks a historic first for Angola, as it represents the nation’s inaugural dedicated gas exploration effort, with results far exceeding initial expectations and igniting optimism across the industry.

“This is a historic moment for gas exploration in Angola,” stated Adriano Mongini, CEO of Azule Energy. “The success of the Gajajeira-01 well strengthens our confidence in the untapped potential of the Lower Congo Basin and validates Azule’s exploration strategy and technical approach.”

The Lower Congo Basin: A Frontier Unlocked

The Lower Congo Basin, a vast geological formation extending along the Atlantic coast of Central Africa, has long been a prolific oil-producing region. However, its potential for natural gas, particularly non-associated gas (gas not produced in conjunction with oil), remained largely underexplored until now. The Gajajeira-01 discovery fundamentally alters this perception, confirming the basin’s rich hydrocarbon endowment beyond crude oil.

The basin’s characteristics, including its geological structures and relatively accessible water depths compared to some ultra-deepwater discoveries elsewhere in Africa, suggest favorable conditions for commercial development. This accessibility could potentially accelerate development timelines and reduce costs, making the project more commercially viable. The discovery’s strategic location offshore Angola also positions it advantageously for both domestic utilization and potential export to international markets.

Scale and Economic Impact: A New Chapter for Angola’s Economy

While the 1 Tcf estimate for Gajajeira-01 is substantial, it’s crucial to place this in a broader regional and global context. Neighboring Mozambique, for instance, boasts over 100 Tcf of proven gas reserves, making it one of Africa’s undisputed gas giants. Similarly, Nigeria holds immense gas reserves, estimated at over 200 Tcf, making it the largest in Africa. Compared to these behemoths, Angola’s initial discovery might seem modest in scale. However, its commercial significance for Angola is profound, given the country’s historical reliance on oil and its urgent need for revenue diversification.

This discovery represents a critical piece of Angola’s ambitious National Gas Master Plan (NGMP), a comprehensive 30-year strategic roadmap unveiled in 2024. The NGMP aims to attract more than $30 billion in investments while generating approximately $150 billion in economic benefits over the next three decades. This long-term strategy envisions natural gas as a foundational pillar for broader economic diversification, moving Angola beyond its traditional oil-centric economy.

From a fiscal perspective, the timing of this discovery couldn’t be more opportune. Angola’s crude oil export revenue in the first quarter of 2025 declined by a notable 18% year-over-year to $6.4 billion, according to data from the Angolan Ministry of Finance. This sharp decline underscores the urgent need for new revenue streams and highlights the vulnerability of an economy heavily dependent on a single commodity. Industry analysts, including those at Wood Mackenzie, project that Angola could generate $2-3 billion in annual Liquefied Natural Gas (LNG) revenues by the late 2030s once production reaches full capacity, providing a substantial and much-needed boost to the national treasury.

Strategic Advantages: Angola’s Edge in Gas Development

Angola possesses several key advantages that make this gas discovery particularly valuable and its development highly promising:

1. Existing Infrastructure: Unlike many frontier gas producers that require entirely new infrastructure from scratch, Angola can leverage some of its existing petroleum infrastructure. The Lower Congo Basin is already home to extensive oil and gas facilities, including pipelines, processing units, and port infrastructure. While new gas-specific facilities will be required, the presence of existing infrastructure can significantly reduce capital expenditure and accelerate development timelines. This is a crucial differentiator compared to completely greenfield projects in other regions.
2. Progressive Regulatory Framework: Angola’s Law 10/14, which strictly prohibits routine gas flaring across all hydrocarbon operations, provides significant environmental credibility and aligns with global best practices. This progressive regulation mandates that associated gas must either be reinjected, used for power generation, or commercialized through appropriate infrastructure. This commitment to minimizing greenhouse gas emissions and maximizing resource utilization positions Angola’s gas development as relatively lower-carbon, potentially attracting environmentally conscious investors and buyers. The Angola National Agency for Petroleum, Gas and Biofuels (ANPG) is responsible for enforcing these regulations and ensuring sustainable development.
3. Strategic Location: Angola’s geographical position on the Atlantic coast of Africa is highly advantageous. It is well-positioned to serve both the European and Asian LNG markets with competitive shipping costs. For Europe, facing ongoing energy security concerns, Angolan LNG offers a diversified supply source. For Asia, particularly rapidly growing economies, it provides a reliable and accessible energy supply. This dual market access enhances the commercial viability of export-oriented gas projects.
4. Political Stability: Relative to some regional competitors, Angola offers a more stable investment environment. While challenges exist, the country has made significant strides in governance and economic reform, providing a more predictable and secure landscape for long-term energy investments. This stability is a key factor for international energy companies making multi-billion dollar commitments.

The Africa Finance Corporation (AFC), a leading pan-African multilateral development financial institution, has specifically identified Angola alongside Nigeria as leaders in Africa’s energy transition strategies. The AFC notes that both countries are pursuing pragmatic policies that balance hydrocarbon monetization with longer-term transition goals, recognizing the role of natural gas as a crucial bridge fuel in the global energy transition.

Regional Energy Security Implications: Beyond Exports

Beyond its substantial export potential, the Gajajeira-01 discovery significantly strengthens Angola’s domestic energy security. Natural gas can play a transformative role in supporting reliable power generation, industrial development, and fertilizer production.

• Power Generation: Shifting from diesel or heavy fuel oil to natural gas for electricity generation can drastically reduce costs, improve efficiency, and lower emissions. This is critical for addressing Angola’s persistent power deficits and supporting industrial growth. The NGMP includes specific provisions for expanding gas-to-power projects.
• Industrial Development: A reliable and affordable supply of natural gas can fuel various industries, from cement production to metallurgy, reducing operational costs and enhancing competitiveness.
• Fertilizer Production: Natural gas is a key feedstock for ammonia and urea production, essential components of fertilizers. Developing domestic fertilizer production can boost Angola’s agricultural sector, enhance food security, and reduce reliance on costly imports.

These synergies between the hydrocarbon, mining, and agricultural sectors are essential for Angola’s broader diversification strategy, creating a more integrated and resilient economy.

The Azule Energy Partnership: A Model of Collaboration

The successful exploration was conducted by Azule Energy, a 50-50 joint venture formed in 2022, bringing together the formidable expertise of energy majors BP Plc and Eni S.p.A., alongside Angolan partners. This partnership represents one of Africa’s largest independent energy companies, boasting a diverse portfolio of 16 licenses and significant participation in the existing Angola LNG project.

What makes this partnership particularly effective is the complementary expertise it brings to the table:

• BP: Contributes global LNG expertise, extensive experience in large-scale offshore developments, and robust trading capabilities, crucial for bringing gas to international markets.
• Eni: Offers deepwater drilling excellence, a strong track record of exploration success, and established West African operations, providing invaluable regional knowledge and technical prowess.
• Angolan partners: Provide critical local knowledge, facilitate stakeholder relationships, and ensure alignment with national development objectives. This local participation is essential for successful project execution and fostering shared benefits.

The Angolan government maintains appropriate oversight through the Angola National Agency for Petroleum, Gas and Biofuels (ANPG), ensuring that development aligns with national interests while still attracting the necessary international investment and technology.

Adriano Mongini, CEO of Azule Energy, has been instrumental in championing exploration in underexplored areas of Angola’s offshore basins. His leadership has emphasized the importance of new exploration models that look beyond traditional oil targets to unlock Angola’s full hydrocarbon potential. “The discovery confirms our belief in the untapped potential of the Lower Congo Basin,” Mongini reiterated, highlighting that this success validates Azule’s exploration strategy and technical approach.

Improved Investment Climate: Angola’s Regulatory Reforms

This groundbreaking discovery was made possible, in part, through Angola’s concerted efforts to improve its investment framework for energy exploration. Since 2018, the country has undertaken significant regulatory reforms designed to:

• Streamline approval processes: Reducing bureaucratic hurdles and accelerating the permitting of exploration and development activities.
• Enhance fiscal terms for exploration: Making the financial terms more attractive for international companies to invest in high-risk exploration ventures.
• Reduce bureaucratic barriers: Simplifying administrative procedures and improving transparency.
• Create transparent bidding rounds: Ensuring fair and competitive processes for awarding exploration blocks.
• Establish clearer rules for gas monetization: Providing a predictable framework for how discovered gas resources can be developed, utilized, and exported.

These changes, particularly following Angola’s strategic decision to depart from OPEC in 2023, have created a more attractive and flexible environment for international energy companies to invest in both oil and gas exploration. Angola’s exit from OPEC allowed it greater autonomy in setting its production quotas, providing flexibility to manage its resources in line with national development priorities rather than cartel-imposed limits. This move signaled Angola’s commitment to maximizing its hydrocarbon potential and attracting investment, as analyzed by S&P Global.

The National Gas Master Plan: A Blueprint for Transformation

The Gajajeira-01 gas discovery perfectly aligns with Angola’s comprehensive 30-year National Gas Master Plan (NGMP), unveiled in 2024. This strategic roadmap is designed to fundamentally transform how Angola utilizes its vast natural gas resources through a multi-faceted approach:

• Infrastructure Development: The plan prioritizes building essential infrastructure, including new gas processing facilities, extensive pipeline networks to connect offshore fields to onshore industrial centers, and potentially new export terminals for LNG.
• Domestic Utilization: A core component of the NGMP is expanding gas-to-power generation capacity to meet domestic electricity demand, reducing reliance on more expensive and polluting fuels. It also aims to increase gas consumption in various industrial applications.
• Value-Added Industries: The NGMP envisions the development of downstream industries such as petrochemicals, fertilizer production, and methanol manufacturing. These industries use natural gas as a feedstock to produce higher-value products, creating more jobs and diversifying the economy beyond raw commodity exports.
• LNG Exports: Establishing Angola as a reliable supplier to international LNG markets is a key objective, generating substantial foreign exchange revenues.

The NGMP targets attracting over $30 billion in investments, with a projected $150 billion in economic benefits over three decades. These benefits extend beyond direct revenues to include significant job creation, infrastructure development, and powerful multiplier effects across related industries, from logistics to specialized services.

Angola has already demonstrated its ability to attract significant energy investment, securing commitments exceeding $60 billion from international financiers for the next five years, as reported by the African Energy Chamber. This robust investment pipeline is crucial for developing the extensive infrastructure needed to monetize the new gas discovery. Projects already advancing include the expansion of existing LNG facilities, the construction of new gas processing plants, the development of pipeline infrastructure, and new gas-to-power projects for domestic electricity supply.

Beyond Hydrocarbons: Angola’s Broader Diversification Strategy

While the gas discovery represents an important step toward diversifying away from exclusive oil dependence, Angola continues to pursue broader economic diversification strategies. The country’s parallel efforts include:

• Critical Minerals Development: Angola is rich in critical minerals, particularly diamonds, where it ranks among Africa’s top producers. The government is actively promoting investment in the mining sector to unlock the full potential of these resources.
• Agricultural Expansion: Leveraging its fertile land and abundant water resources, Angola aims to significantly expand its agricultural sector to enhance food security, reduce imports, and develop agricultural exports.
• Infrastructure Development: Continuous investment in ports, railways, roads, and telecommunications is vital to support broader economic growth and improve connectivity across the vast country.
• Financial Services: Modernizing banking and investment frameworks is crucial for attracting both domestic and foreign capital into non-hydrocarbon sectors.

This multi-pronged approach aims to reduce Angola’s historical vulnerability to oil price volatility while creating more sustainable and inclusive growth pathways. As noted by the AFC in its 2025 infrastructure report, “Angola’s regulatory reforms and resource potential have created a compelling investment case.”

How Will Angola Develop Its Gas Resources? The Roadmap Ahead

The development of the newly discovered resources in the Lower Congo Basin will likely follow a structured, phased approach to balance immediate needs with long-term ambitions and manage capital requirements.

1. The New Gas Consortium (NGC): Angola has already established the New Gas Consortium (NGC), the country’s first dedicated non-associated gas development project. This consortium structure brings together international expertise with domestic participation, allowing for shared risk, pooled technical capabilities, coordinated infrastructure development, and balanced sovereign interests. The NGC model provides the framework for developing the newly discovered resources, ensuring alignment with national priorities while attracting necessary international capital and expertise.
2. Infrastructure Development Roadmap:
   • Phase 1 (2025-2028): This initial phase will focus on detailed resource assessment, comprehensive front-end engineering and design (FEED) studies, and securing the Final Investment Decision (FID) for the project. Initial infrastructure development, such as preliminary site preparation and long-lead item procurement, would also commence.
   • Phase 2 (2028-2031): This phase would involve the installation of production platforms, subsea infrastructure, and pipeline connections to existing or new onshore processing facilities. First gas production is targeted during this period, with an initial focus on supplying the domestic market for power generation and industrial use.
   • Phase 3 (2031-2035): This final phase would see the full development of export infrastructure, including potential expansion of LNG capacity. The aim is to achieve full production plateau and diversify market destinations for Angolan LNG.

This phased approach allows Angola to strategically balance immediate domestic energy needs with longer-term export ambitions, while spreading capital requirements over a manageable timeline.

Regional and Global Implications: Angola’s Role in the Energy Transition

Angola’s gas discovery and its strategic development plan have significant implications for both Africa’s energy transition and global LNG markets.

1. Africa’s Energy Transition Leadership: As highlighted by the AFC, Angola and Nigeria are emerging as leaders in the continent’s energy transformation. Their pragmatic approach demonstrates how African nations can responsibly monetize hydrocarbon resources, use natural gas as a transition fuel for economic development, and balance energy security with environmental considerations. The development of Angola’s gas resources could provide a template for other resource-rich African nations seeking to navigate this complex balance.
2. Competitive Position in Global LNG Markets: Angola’s proximity to major LNG markets positions it favorably in an increasingly competitive global gas landscape. Its shorter shipping routes to Europe compared to the US Gulf Coast, and strategic shipping lanes via the Cape of Good Hope for Asian markets, offer competitive advantages. While established exporters like Qatar, Australia, and the United States continue to expand capacity, Angola’s new supply could contribute to global energy security and diversification. Industry analysts project that Angola could generate $2-3 billion in annual LNG revenues by the late 2030s, providing a substantial boost to the country’s foreign exchange earnings and reducing dependence on oil exports.
3. Regional Energy Integration: Beyond its national significance, Angola’s gas discovery could contribute to broader regional energy integration through potential cross-border pipeline infrastructure, power generation and grid connections, and the development of regional gas trading hubs. These integration opportunities align with the African Continental Free Trade Area (AfCFTA) objectives of increasing intra-African trade and creating more interconnected energy systems across the continent.

Comparison to Other African Energy Developments

Angola’s gas discovery in the Lower Congo Basin occurs within a broader context of significant developments across Africa’s energy landscape:

• Nigeria: The Dangote Refinery began gasoline production in 2024, marking a historic moment as Africa’s largest oil producer began refining its own crude domestically at scale (650,000 barrels per day), reducing reliance on imports.
• Mozambique: Despite security challenges, the Coral South FLNG project achieved its first LNG cargo in 2022, demonstrating the viability of floating LNG technology. Major onshore Area 1 and Area 4 developments are also advancing, aiming to unlock over 100 Tcf of gas.
• Senegal/Mauritania: The Greater Tortue Ahmeyim (GTA) project represents West Africa’s first deepwater gas development spanning national boundaries, showcasing cross-border energy cooperation.
• Tanzania: Significant LNG projects are progressing after years of regulatory delays, aiming to tap into its substantial offshore gas reserves.

Within this context, Angola’s discovery represents a significant, but not world-scale, finding. Its 1+ Tcf of gas is substantial by Angolan standards and for its national development but is modest compared to Mozambique’s 100+ Tcf or Nigeria’s established position. However, Angola’s strategic advantages in terms of existing infrastructure, regulatory framework, and location make its discovery highly impactful for its own economic future.

Challenges Ahead: Navigating the Path to Full Potential

Despite the immense promise, Angola must navigate several significant challenges to fully realize the potential of its new gas discovery:

1. Infrastructure Development Hurdles: Developing the necessary infrastructure to process, transport, and potentially liquefy the newly discovered gas reserves presents formidable challenges. This includes substantial capital requirements (the estimated $30 billion investment need exceeds typical annual FDI for Angola), technical complexity (offshore development requires specialized expertise and equipment), and intricate timeline management to coordinate multiple interconnected infrastructure elements. Securing appropriate financing structures that balance sovereign guarantees with attractive private investment returns will be crucial.
2. Market Competition: Angola will face intense competition from established and emerging LNG exporters targeting the same key markets. Established players like Qatar, Australia, and the United States continue to expand capacity, while other emerging competitors in Africa (Mozambique, Tanzania) and globally are vying for market share. Price competition and buyers’ increasing demand for shorter-term and more flexible contract arrangements will require Angola to be agile and competitive. Securing long-term purchase agreements will be essential for project financing and development certainty.
3. Economic Diversification Imperatives: While the gas discovery represents an important step toward diversifying away from oil dependence, Angola faces broader economic challenges. There’s a risk of “Dutch disease,” where a focus on resource extraction crowds out other sectors. Effective currency management will be needed to balance export revenues with domestic inflation pressures. Building local technical capacity and skills development across multiple industries is vital. The country must also balance energy sector needs with broader infrastructure priorities to achieve genuine economic diversification rather than simply shifting from oil to gas dependency. “True diversification requires moving beyond hydrocarbons entirely, toward manufacturing, services, and knowledge-based sectors,” notes the AFC in its analysis of African resource economies.

In the competitive landscape of global energy markets, Angola will need to explore innovative approaches, including joint ventures and strategic asset sales, to maximize the value of its resources and attract the necessary investment for full development.

Conclusion: A Transformative Discovery with Far-Reaching Potential

The Gajajeira-01 gas discovery in Angola’s Lower Congo Basin marks a transformative moment for the nation. It not only provides a vital new revenue stream and enhances energy security but also serves as a powerful catalyst for broader economic diversification. By leveraging its strategic advantages, progressive regulatory framework, and robust partnerships, Angola is well-positioned to become a significant player in Africa’s natural gas sector. While challenges remain, the commitment to its National Gas Master Plan and a phased development approach indicate a clear vision for unlocking this new potential. As the world navigates the complexities of energy transition, Angola’s pragmatic approach to hydrocarbon monetization, coupled with its focus on sustainable development, offers a compelling model for resource-rich nations across the continent. The coming decades will reveal the full extent of this groundbreaking discovery’s impact on Angola’s future and its role in the global energy landscape.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

17th July, 2025