Export Composition: Oil, Diamonds, and LNG

Angola’s export profile is among the most concentrated in the world: crude oil accounts for an estimated 90-95% of total merchandise exports, making the country’s external balance, FX reserves, and fiscal position overwhelmingly dependent on a single commodity. While non-oil sectors now represent over 70% of GDP, the export base remains stubbornly undiversified.

Export Breakdown

Crude Oil Exports

Angola exports the vast majority of its approximately 1.03 million bpd of crude production, retaining only a small fraction for domestic refining. Key characteristics of oil exports:

• Grade: Primarily medium-sweet and heavy crude grades, with Girassol (from Block 17) serving as the benchmark Angolan grade
• Pricing: Angolan crudes trade at a premium or discount to Brent depending on grade, with differentials ranging from -$2 to +$3/bbl
• Destination: China absorbs approximately 60% of crude exports, followed by India, Europe, and the United States
• Revenue: At Brent approximately $74.50/bbl and 1.03 million bpd, gross annual crude export revenue is approximately $28 billion
• Payment: Export receipts are predominantly in USD, providing the primary source of FX inflows to the BNA

Diamond Exports

Angola is the world’s fourth-largest diamond producer by value, with annual output of approximately 9 million carats. The sector is dominated by:

• Catoca mine: The world’s fourth-largest diamond mine by capacity, operated by a joint venture including Endiama (state diamond company), Alrosa (Russia), and other partners
• Artisanal mining: A significant but poorly quantified portion of production comes from informal and artisanal operations, particularly in the Lunda Norte and Lunda Sul provinces
• Marketing: Rough diamond exports are primarily sold through international channels, with Angola seeking to develop domestic cutting and polishing capacity

Diamond exports provide valuable non-oil FX earnings but are insufficient to meaningfully reduce oil export dependence.

LNG

Angola LNG – a $10 billion facility at Soyo operated by a consortium including Chevron, Sonangol, TotalEnergies, BP, and ENI – processes associated gas from offshore oil blocks that was previously flared. The plant has approximately 5.2 million tonnes per annum (mtpa) of capacity, with exports directed primarily to Asian and European markets. LNG represents a growing but still minor export contributor.

The Diversification Gap

The gap between GDP composition (non-oil > 70%) and export composition (oil > 90%) is Angola’s most significant structural vulnerability. This means:

• The trade balance is entirely determined by oil price and production volume
• FX reserve accumulation depends on oil export receipts
• The kwanza exchange rate is effectively oil-price-linked
• Non-oil sectors, despite growing domestically, do not generate the FX earnings needed to sustain imports and debt service

Non-Oil Export Potential

Angola has identified several sectors with export growth potential under the PRODESI diversification program:

• Coffee: Historical major export (largest African producer pre-1975), production restarting from a low base
• Fisheries: Atlantic coast fisheries with export potential to European and Asian markets
• Agriculture: Tropical fruits, cashews, and processed foods for regional markets
• Manufactured goods: Cement, beverages, and building materials for neighboring markets (DRC, Zambia, Namibia, Congo-Brazzaville)

Outlook

Meaningful export diversification will take a decade or more. In the near term, Angola’s external position remains a function of Brent pricing and production volumes. Investors should monitor oil export volumes, trading partner dynamics (particularly China demand), and any progress in non-oil export development as leading indicators of structural transformation.