A local company developing Angola’s upstream

Angola

Ulanga Gaspar Martins, CEO of Poliedro, talks to The Energy Year about the company’s strategy for continuing to develop upstream assets and how the fiscal changes in Block 2/05 are relevant to the overall Angolan upstream sector. Poliedro is an oil and gas company with a presence in Angola’s E&P, mining, fuel retail and logistics sectors.

What is Poliedro’s strategy for continuing to develop upstream assets?
We prefer to look at assets that are either considered mature fields or marginal fields. It’s easier for a company such as Poliedro to develop the necessary partnerships for upstream assets. We still aim to become an operator as well.
In our strategic plan for 2020-2030, we seek to consolidate our different divisions and have the necessary financial strength to enter into block operatorship. We will study opportunities, especially in mature and marginal fields, and we will seize opportunities even if they’re not necessarily within our strategic plan.
We continue to have a very good collaboration with our operator in Block 2/05, Etu Energias. We are developing a deeper relationship with them and are assisting them with anything they need.
Block 2/05 recently underwent changes in terms of how oil profits are split between the ANPG [National Oil, Gas and Biofuels Agency] and the partners of the block. One of the main purposes of this change is to ensure there is revenue available to continue developing the block. We believe that Block 2/05 can easily continue to produce for the next 5-10 years. Consequently, we’re very bullish, and we’re assisting Etu Energias to achieve further production.

To what extent do the fiscal changes in Block 2/05 represent a blueprint for the Angolan upstream sector in general?
I think these changes represent the right way to go. When I look at the Angolan oil sector, we have two main challenges. The first one is trying to stabilise our production. This requires many new investments. The other one is addressing the global decarbonisation trend around which many industry players are trying to optimise their portfolio.
We have many fields in Angola, including some that have been licensed recently by the ANPG that don’t necessarily meet the profitability criteria of internationally established players.
I think another challenge of our oil industry concerns how we can enable local companies to have more say in how we develop these fields. We consider ourselves one of these players. This issue will require financial effort, and it will also require technical capacity building.
I think going forward the best way for the Angolan authorities to stabilise and ultimately increase oil production is to reinforce local companies so that they can play a similar role to that of the larger, more established, international players in the industry. We just need to prepare and address the issues so companies such as ours can fill that space.

How is Poliedro preparing itself to become an operator in the future?
For a long time, we thought that the oil industry as a whole is rocket science, but it’s not. Today, the technologies we need are available to us. The main challenges are financial because with the decarbonisation trend, it’s increasingly difficult to find the right financing solutions to put some of these fields on stream. There is a financial burden in doing that.
Then, the second issue is technical. We still need to develop the local resources so we can depend less on external technical capacity. That has nothing to do with us wanting to operate on our own. It’s ultimately a matter of costs. If we have a better technical capacity to develop these fields, this will lower the costs of production.

How is Poliedro looking to expand its downstream portfolio?
Historically, Poliedro has always had a small presence downstream. We operate a gas station, and our strategic plan calls for an increase in our network of gas stations to around 10-12 in Angola.
We should begin operating a second gas station probably by Q2 of 2024. We’re further looking at opportunities in the bunkering and storage of refined products inland. We are following the sector very closely.
We know that the liberalisation of the sector will continue. We will continue executing our strategy for refined products, which will position us to become a more significant player in distribution and bunkering and inland storage.

What is Poliedro’s strategy for launching its new logistics business division?
If you look at any economy – be it a developing economy or a developed economy – the backbone is logistics. In Angola it’s the same.
Local food production has been increasing for the past 10 years. There’s much more capacity to produce locally in the agriculture sector, and that will drive a growth in the Angolan logistics market.
However, we also see that it is difficult to bring what is produced from where it’s being produced to where it will be processed or ultimately consumed. We think the main reason for that is, firstly, a lack of infrastructure, such as road networks, but also the absence of logistics companies. Since we perceive ourselves as a company that needs to be present in the main sectors of the economy, we view logistics as important for us.
We’ve studied the market and the players. If you ask me today if we have the needed expertise, we don’t, so our entrance into this sector will happen through an acquisition. We are looking at the various players, and once we identify the right company, we’ll probably establish partnerships locally and internationally and then acquire the identified company.

What do you think is Poliedro’s role in assisting the transformation of the Angolan economy?
We believe that the Angolan miracle would be to transform natural resources into wealth. At the level of our company, we want to achieve the same. We’re present in the oil industry and the mining sector, mainly in diamonds. We want to transform these resources into wealth for the country, for the shareholders of the company and for the employees of the company.
We’ve been talking about a circular economy in which we create or transform resources and then circulate them into the economy, creating wealth in the process. Hopefully we can achieve that.

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