Angola, the second largest oil producer in sub-Saharan Africa after Nigeria, is pumping 760,000 barrels a day from its vast offshore oil fields. This production, which accounts for more than 40 percent of Angola's Gross Domestic Product (GDP) and as much as 90 percent of government revenues, is expected to top one million barrels a day when new oil fields come on stream. Continuing exploration, particularly in the deepwater blocks, is finding new reserves faster than oil companies are depleting old ones. Angola ranks third behind Iran and Saudi Arabia in new oil discoveries.

Angola's 34 offshore concession areas stretch westward into the Atlantic Ocean in three distinct bands: shallow water blocks with a depth of no more than 1,670 feet, deep water blocks with a maximum depth of 4,950 feet, and ultra deep blocks with a maximum depth of 8,250 feet. While most of the current production comes from the shallow blocks, the new discoveries in the deepwater blocks have generated enormous excitement in the industry. Industry analysts say four of Angola's deepwater areas--Blocks 14, 15, 17 and 18--have recoverable reserves of at least 10 billion barrels of oil.

Chevron began producing oil from the Kuito field in Block 14 at the end of 1999. Chevron has completed five additional appraisal wells and estimates that the block's recoverable reserves exceed 3 billion barrels. Chevron expects to invest as much as $6 billion in Angola over the next five years.

Exxon Mobil has made twelve deepwater oil discoveries on Block 15 since 1998. The discoveries indicate oil reserves in Block 15 total more than 3.5 billion barrels. Production is scheduled to begin in 2003-2004.

TotalFinaElf has made 12 discoveries on its prolific Block 17. Industry analysts estimate this deepwater block also holds reserves totaling between 3 and 3.5 billion barrels. Production in the Girassol field on Block 17 is scheduled to begin at the end of 2001. Production in the Dalia field is expected to start at the end of 2003.

BP Amoco has made six oil discoveries on deepwater Block 18. It announced its fifth and sixth discoveries --the Cobalto and Cromio wells--in the spring of 2001. The first three discoveries--the Platina, Plutonia and Paladio wells--have estimated reserves of 700 million barrels. Industry analysts predict that Block 18 will become Angola's fourth billion barrel block.

Exxon Mobil began drilling in 2001 on deepwater Block 24 in the Kwanza Basin off the southern Angolan coast. Other companies have committed to drilling another 15 exploration wells in the Kwanza Basin.

The Angolan government finalized agreements with foreign oil companies on the ultra-deep water Blocks 31-33 in 1999. BP Amoco is the operator in a production sharing agreement for Block 31. TotalFinaElf is the operator for Block 32 and Exxon Mobil is the operator on Block 33. Geologists believe that the petroliferous structures discovered in the deepwater blocks extend west into the contiguous ultra-deep blocks. They say these blocks have the potential to be as productive as Brazil's Campos Basin. BP Amoco has already made two important discoveries on Block 31. The main operators have plans to drill another 4-5 exploration wells on Blocks 31-34 in 2001-2002.

Sonangol, with technical assistance from Norway's Norsk Hydro, will operate ultra-deep Block 34. Analysts believe this block holds billions of barrels of oil and there has been intense competition among international oil companies for a stake in the concession.

Angola and Namibia finalized a joint study of the unexplored offshore Namibe Basin, which straddles the two countries' border. Sonangol and Namibia's National Petroleum Corporation (Namcor) began promoting the exploration of this area in March, 2001.

Sonangol and Texaco have agreed to develop a liquefied natural gas (LNG) plant to convert natural gas from offshore oil fields to about 3 million tons of LNG per year for both domestic consumption and export. The project would draw from offshore oil fields that may contain as much as 4 trillion cubic feet of associated and non-associated gas.

Mining

Angola's mineral wealth includes diamonds, iron ore, phosphates, copper, feldspar, gold, bauxite and uranium.

Diamonds

Before 1975, Angola was the world's fourth largest producer of diamonds. First discovered in Angola in 1912, diamonds are found in both alluvial deposits and volcanic kimberlite pipes. Geologists estimate that Angola's alluvial reserves could total as much as 130 million carats. Angola has at least six untapped kimberlite pipes. These pipes, among the ten largest on earth, hold an estimated 180 million carats worth several billion dollars.

Current production comes largely from alluvial deposits, mainly in Lunde Norte and Lunda Sul provinces in the northeast area of the country. About 90 percent of the output is of gem quality.

In the last year the Angolan government has successfully secured most of the diamond producing areas. The military victories coupled with the government's new certification system and international sanctions against UNITA has significantly reduced illegal mining. Economic analysts say diamond exports rose by 28 percent in 2000 to $739 million dollars.

The Catoca diamond company, the largest diamond operation in Angola, produced 1.8 million carats in 2000. Mining officials predict the mine's output will increase to three million carats in 2001 and they expect to produce 5 million carats by 2005. Catoca, Angola's only producing kimberlite mine, is the world's fourth largest diamond mine.

Southern Era Resources, a Canadian company, plans to develop the Camafuca kimberlite diamond mine. Geologists estimate that Camafuca kimberlite pipe holds 24 million carats worth $2.5 billion.

DiamondWorks, another Canadian firm, has mining concessions that include five known kimberlite pipes. The Camatchia and Camagico pipes in this concession are two of the world's largest diamond pipes and geologists believe they could yield 3.5 million carats.

Other Minerals

With substantial deposits of gold, iron ore, phosphates, manganese, copper, lead, quartz, gypsum, marble, black granite, beryl, zinc and numerous base and strategic metals, Angola has been described as on of the world's biggest and least developed mineral treasure troves. The government is reviewing and revising mining contracts to halt illegal mining and encourage legitimate private enterprise to prospect for and develop the country's mineral wealth.

The Mining Society of Angola is trying to revive the Cassinga project in southern Angola. The 2,681 sq. km Cassinga area could produce 10 million tons of minerals worth $320 million per year. Private companies are also beginning to explore for high quality granite and marble in the south. Angola's national iron and steel company is looking at resuming iron and manganese mining. Angola could produce two million tons of iron a year.

Agriculture and Fishing

Angola was self-sufficient in most food crops and a top producer of commercial crops such as coffee, sisal, palm oil, bananas and sugar cane, and boasted annual fish catches of nearly 600,000 tons before war broke out in the wake of independence in 1975. Angola's 1,600 kilometer coastline teems with mackerel, tuna, shellfish and sardines.

Before 1975, Angola was the world's fourth largest coffee producer. The International Coffee Organization (ICO) is funding an $8 million pilot project aimed at rehabilitating the coffee sector by resettling coffee farmers and assisting them to establish new farms.

The Angolan government seeks to implement other projects to revive both the agriculture and fishing sectors.

Timber

Angola's extensive forests contain valuable tree species including rosewood, ebony, and African sandalwood, as well as mahogany, tola and mulberry. Nearly 150,000 hectares of eucalyptus, cypress and pine plantations are waiting to be rehabilitated.

Infrastructure

Angola has undertaken major projects to upgrade the country's power, transport and telecommunications sectors. Plans include a $500 million effort to rehabilitate the National Electricity Company hydropower stations and a $200 million project to repair six dams. The government has rehabilitated generators in the central and southern regions of the country and intends to create a national electricity grid linking its three regional electricity sectors to neighboring countries. The government is also repairing roads and airstrips in the northern part of the country. Angola's fixed line telephone network is going digital and Angola Telecom has issued licenses to mobile phone operators.

Manufacturing and Industrial Development

Angola is beginning to attract investors in the manufacturing and industrial sector. The Coca Cola Company has opened a bottling factory. The Chinese Guangdong Overseas Construction Corporation is building the first motorcycle assembly plant in Angola. The IMF is funding the rehabilitation of a textile factory and the Angolan government has approved a foreign investment project to make fruit juices as well as bottled water and spirits. International businesses have upgraded the cement factory and rehabilitated the country's main coffee factory. Rehabilitation of a sugar mill at Dombe Grande is also underway.

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