Companies are trying to invest, and new investments make the country grow. The way to grow is through investments, both foreign and national.

Mario GOMES President GRUPO SIMPLES

Outlook upstream

January 16, 2018

Mario Gomes, president of Grupo Simples, talks to TOGY about lower oil prices, the election of a new president in the country and Angola’s potential for development. In December 2015, Simples Oil & Gas was awarded a 30% stake in block KON 6. However, in May 2017, Sonangol announced the cancellation of the onshore bid round, citing the change in market conditions since the round was launched in 2014.

• On the downturn: “The downturn makes us stronger and more organised. In Angola, it makes us more competent. We have companies leaving; Angola and Angolans have to do the job left behind.”

• On the new administration: “The new president needs to let people know that this is Angola and we all work hard to meet international regulations and procedures. We have been doing this for a couple of years. Collaboration is going to be the key for Angola.”

• On outlook: “Angola has all this potential. We still need to discover and keep moving. Something is there that will help Angola to grow.”

Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our interview with Mario Gomes below.

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In what way has the cancellation of the onshore blocks affected the company?
There is a new administration now which is trying to review everything. They have other situations to consider. We believe that at the beginning of next year Sonangol will bring some things back. With the current oil situation, there are not too many companies that would have survived to drill in the first place, that is the reality. Sonangol was not doing well economically. If the oil price is not increasing, it can limit some operations. It was not the best time for us and we did not like the situation, but likewise the other companies felt it. We hired people who were transferred to the States to perform operations there.

Would a bid round in the Namibe Basin interest Simples Oil & Gas?
Wherever there is oil, directly or indirectly, we plan to be part it. We will either win or participate. I do not know if it will be viable, but something must be there. Angola has all this potential. We still need to discover and keep moving. Something is there that will help Angola to grow. Sonangol, whatever they do, it has been done before. Sonangol will not offer bidding unless there is a good justification to do so.

Do you have faith that the new administration can improve the business landscape here?
I had faith before and I have faith now. This new regime is trying to move faster because of the situation. I believe in them; I trust them. When we elected the new president, we believed, and this will keep us moving. It is not surprising that [President] João Lourenço has made his own decisions because he needs to make his legend, he is doing what he is supposed to do.
He needs to improve communication, which is the key to succeed. When you run a country for so many years, no one listens to you after a while. The new president needs to let people know that this is Angola and we all work hard to meet international regulations and procedures. We have been doing this for a couple of years. Collaboration is going to be the key for Angola. [Former President José Eduardo] dos Santos and Lourenço have a good relationship that makes them stronger.

What have been your activities and highlights in 2017?
We are trying to operate in the United States. We own our own block with 11 wells where oil and gas is being produced. We will be the first Angolan company to operate in the US. Sonangol has been in Iraq, but we are the first private company to be in the US. We are happy about that.
We are working onshore in Texas, producing about 1,000 barrels per day. This is good for a company like us. Whatever we planned has been in the pipeline and is working. We have to focus on new things and new companies. It shows that Angola and Angolan companies are trustworthy to do business. We want to be on top in the world. Angola is the first or second-largest producer in Africa, and now the Angolan flag is in the States, while we have listed on the stock market in the Netherlands. We are not public yet – we still have some internal procedures to do – but we will be soon.
The downturn makes us stronger and more organised. In Angola, it makes us more competent. We have companies leaving; Angola and Angolans have to do the job left behind. The revenue is not the same, but it helps us to build growth in the market. We believe the market will improve. It is cyclical: Now the price is around USD 60, but it had been as low as USD 40. So it is not too bad. Companies are trying to invest, and new investments make the country grow. The way to grow is through investments, both foreign and national. That is why we have partnerships with companies and people.

For more information on the Angolan market, including upstream investment opportunities and the government’s call for downstream partners, see our business intelligence platform, TOGYiN.
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