1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites
The poor district of Cazenga, in western Luanda Copyright: DW/Renate Krieger
Image: DW/R. Krieger

Angola's oil

Renate Krieger / so
November 22, 2012

Angola is Africa's second biggest oil producer and will soon also export natural gas. The resource boom is boosting Angola's economy but the gap between rich and poor is growing wider.


The town of Soyo in northern Angola borders the Democratic Republic of Congo. Meter-high flames emerge from two horizontal pipes lying alongside a road. Scenes like this can be seen all round the town. They are a by-product of the oil exploration in the area. The burning of the poisonous gases is the cheapest way to dispose of the waste. This is why, night after night, gas flames light up the sky around Soyo. They are often the only source of light, as the street-lights rarely work.

“At night the whole town is dark”, says taxi driver Luciano Nzombo Madia. “You can't even see if somebody crosses the road.” He manoeuvres his car around the many potholes in the road.

Gas combustion in Soyo - flames rise from pipes on the ground.Copyright: Renate Krieger/DW
Gas combustion in Soyo - the gas processing plant is yet to start operations.Image: DW/Renate Krieger

Huge natural gas reserves
Angola, however, plans to process its gas and the flames will soon be extinguished. The country's first liquified natural gas (LNG) plant is currently being developed in Soyo. A complex network of pipelines spreads over an area the size of 240 football fields.

Construction started in 2008 and the plant was due to start operations in early 2012. It is expected to produce up to 5.2 million tonnes of natural gas every year. Only eight such plants currently exist in Africa and Angola would be entering a very lucrative business. But the LNG plant in Soyo has yet to start operations. Official sources say it is still in its test phase. Visits by the press are rarely approved.

After Nigeria, Angola is Africa's second biggest oil producer, according to the Organisation of Petroleum Exporting Countries (OPEC). 1.62 million barrels of oil are extracted here every day. According to OPEC, the country also has some 366 billion cubic meters of natural gas reserves. This is nearly 20 percent more than experts had estimated in 2010.

No jobs for the locals

A long-distance view of the Soyo plant.Copyright: Renate Krieger/DW Copyright: Renate Krieger/DW Datum: 07.11.2012
The Soyo plant should have started operating in 2012. Annual production capacity is 5.2 million tonnes of liquified natural gas.Image: DW/Renate Krieger

Although Soyo has not yet started producing its natural gas, buyers are already queueing up. The main taker for Angolan natural gas will be the US. The Chevron company has a 36 percent stake in the LNG project, making it the biggest shareholder. The state-owned Angolan Sonagas has a 23 percent stake and the Italian firm ENI, the French company Total and British Petroleum are also involved in the project.

Many people and companies have come to Soyo as a result of the natural resource boom, says taxi driver Luciano as he drives towards the city center. Luciano himself worked as a foreman for the LNG project in 2010 and 2011. The trained electrician supervised the installation of the pipeline in the Atlantic Ocean. The gas will be pumped from a depth of up to 1,700 meters, Luciano told DW.

Taxi driver, Luciano Madia Copyright: Renate Krieger/DW Datum: 07.11.2012
Luciano Madia supervised laying the LNG pipes in the Atlantic.Image: DW/R.Krieger

Once all the pipelines had been laid, Luciano lost his job. He now works as a taxi driver. He earns 15,000 Kwanza ( US$150, 112 euros). For his job at the LNG plant, he earned the equivalent of US$330 a month. Human rights experts and economists say the resource boom has had little effect on the Angolan job market. According to official figures, the oil sector only employs 0.5 percent of Angola's workforce.

Oil boom in Luanda

Angola's capital Luanda seems to be one of the few winners in country's wealth distribution. Skyscrapers are going up all over the city. Many banks and large firms have opened offices here. The city with a population of 5 million is one of the most expensive in the world. the rent for an apartment in the city center can cost more than US$5,000 . One square meter of land costs more than $US1,000. For a simple meal, like a hamburger or a soup, the price is around US$10.

Luanda's Avenida Marginal avenue. The wide road is lined with palm trees on one side and high buildings and constructions sites on the other. Copyright: Renate Krieger/DW
There's little traffic on Luanda's Avenida Marginal avenue.Image: DW/Renate Krieger

The Avenida Marginal, Luanda's coastal road, runs through the city's main banking district. It is well tarred and appears almost unused. After the end of the civil war in 2002, the government repaired the country's roads with the earnings from the oil. Today, many provincial towns are connected by a modern road network. However, the sidestreets of the Avenida Marginal are jammed with traffic, caused by massive potholes in the tarmac. The traffic lights change at short intervals. Stop. Go. Stop. Go. Off. To move just a few kilometers takes at least half an hour.

No tarmac, no electricity, no water

Apart from a few prestige projects, most Angolans get little from their country's natural resource boom. A United Nations report from 2012 documents that 37 percent of Angolans live in “extreme poverty”, i.e. on less than one dollar a day. In the year 2000, the figure was 54 percent. Extreme poverty has declined by a third, but in comparison to Angola's economic growth during the same period, the drop could have been even bigger. According to the World Bank, Angola's Gross Domestic Product rose from US$660 in 2000 to US$5,150 in 2011. This is almost an eight-fold increase. While many of the poor have remained poor, the rich have become much richer.

“The best way to distribute national riches is through the creation of jobs”, said Noberto Garcia prior to the parliamentary elections in 2012. Garcia is a lawyer and a newcomer to the ruling MPLA party. “We have an illiteracy rate of 34 percent and this complicates the distribution of the wealth. The government must therefore promote the people's education so that they can get jobs,” he told DW. The government has said it plans to step up the fight against poverty and hunger, improve access to education and jobs and increase energy and water supplies, all by 2017.

President Jose Eduardo dos Santos adressing a political rally in Luanda, August 2012. EPA/PAULO NOVAIS
President Jose Eduardo dos Santos has failed to spread the oil wealth equally, critics sayImage: picture-alliance/dpa

In Cazenga, the most densely populated part of Luanda, there is an urgent need for improvement. The roads have no tarmac, and when it rains they turn into pools of mud. Men, women and children wade through puddles full of dirt and trash. Electricity is supplied for a few hours a day, if at all.

“The engineers of the energy companies say that the water reservoirs are dry. They understand these things, so we have to believe them”, says Euricleurival Vasco, who is seated in front of a tomato stall with his sister and some children. Vasco is wearing a t-shirt depicting Agostinho Neto, Angola's first independent president. Like many residents of Cazenga, the 27-year-old supports the governing MPLA party. After all, most of the politicians in the party come from this neighbourhood.

Missing billions

Pipelines running through the countryside. Copyright: DW/Renate Krieger
The IMF queries how 32 billion US Dollars of oil money was spent. DW/Renate KriegerImage: DW/R. Krieger

Angola's economy grew by nearly seven percent in 2012. Industrialized countries can only dream of such a growth rate. But the growth comes almost exclusively from the oil sector, says Angolan economist Fernando Heitor. According to him, the main beneficiaries are members of the economic and political elite around President Jose Eduardo dos Santos. Dos Santos has ruled the country for 33 years. In August 2012, he was for the first time elected through a democratic vote, even if only indirectly as the result of parliamentary elections.

The Angolan government has experienced much international criticism over corruption, nepotism and a lack of transparency. What, for instance, happened to the US$32 billion earned by state-owned oil and gas company Sonangol between 2007 and 2011? According to a report from the International Monetary Fund (IMF), this figure is missing in the public records. The government says the money was used for infrastructure projects. Details of these projects, however,remain unclear.

Broken promises

Corrugated iron shacks on a dusty road in Viana.. Children and a chicken can be seen. Copyright: Renate Krieger/DW Datum: 10.11.2012
In Viana many live in shacks after to move to make way for road construction.Image: DW/Renate Krieger

Residents of Viana, one of Luanda's suburbs, have been waiting for new homes for five years. They used to live on the Ilha de Luanda, a tongue of land which protrudes into the ocean off the northern part of the city. It lies opposite the Avendia Marginal with its new skyscrapers. Local residents had to move out of the area in 2009, when the government started work on a new road. Since then, they have been homeless and live in corrugated-iron shacks in Viana. Entire families here live from just US$300 a month.

Meanwhile, in the city of Kilamba thousands of newly-built apartments remain empty. Only 220 of the almost 3,000 apartments have been sold. Kilamba is one of the election promises President Jose Eduardo dos Santos made in 2008. The plan was to build one million affordable apartments for the population. The price of an apartment lies between US$90,000 and 150,000. For many Angolans, that is way out of their reach.

Skip next section Explore more
Skip next section DW's Top Story

DW's Top Story

Xi Jinping walks by a military band during a visit to Moscow

'Pandora’s box': EU weighs changing relations with China

Skip next section More stories from DW
Go to homepage