-----------------------------------------------------------------------------Ponsandharbours

Angola's ports and oil terminals

In this latest contribution to his series of articles on the ports and harbours of
Africa, Denis Fair, senior research fel/ow at the Africa Institute, looks at Angola
and at the communications network vital to its economic recovery.

Prior to independence in 1975, Angola had of Angola (MPLA), which enjoys the support to around $14-16 in 1988, Angola's export
much in its favour in terms of the resources it of Cuba and the Soviet Union. earnings from oil have not appreciated at
possessed and the degree to which they had The continuing destruction of infrastruc- nearly the same rate as production. This fact
been developed. It is a large country, 1,25 ture and the neglect of mines, factories, certainly highlights the vulnerability of the
million km 2 in extent or slightly larger than the plantations, farms and coastal fisheries as Angolan economy to a heavy dependence
Republic of South Africa. It is rich in oil, dia- well as the high cost of the war have brought on a single commodity. All the more so when
monds and iron ore and its rivers possess the economy to a very low ebb. Coffee ex- over half of the country's foreign currency
considerable potential for hydroelectric ports have fallen from 245 000 tonnes in the earnings have to go towards military expen-
power development and irrigation. It has early 1970s to only 11 000 tonnes in 198~ diture. Of this, a considerable proportion
large areas of fertile soil, produced sufficient 87; iron ore mining has ceased and the Ben- pays for the food, accommodation and fuel
to satisfy its own food requirements and guela railway has not been fully operative of the 45 000 Cuban troops stationed in An-
ranked fourth as a world coffee producer, since 1975. Moreover, the weakening of gola in support of the MPLA regime.
Reproduced by Sabinet Gateway under licence granted by the Publisher (dated 2010)

while rich fishing grounds lie off its southern world oil prices, after years of being extra- According to the Economist Intelligence
coast. The Lobito corridor - the Benguela ordinarily high, resulted in a fall in income for Unit, the Angolan state oil company (Sonan-
railway and the port of Lobito - was the Angola's once flourishing oil industry. Ne- gol) was established in 1978 as "exclusive
conduit for the export not only of much of its vertheless, were it not for oil Angola's plight concessionaire for all exploration and pro-
own production but also for the copper, would have reached abysmal proportions. duction rights but permitting foreign com-
manganese and other minerals from its in- Fortunately, its oil producing areas are locat- panies to participate in the search for and
land neighbours, Zaire and Zambia. ed in the Cabinda enclave to the north of the production of hydrocarbons in association
In the early 1970s Angola's economy was Zaire river and in offshore fields in the far nor- with Sonangol on the basis of a production
strong and healthy. However, the economy them parts of the country and beyond the sharing agreement or through the establish-
including commercial agriculture, was un- main areas of persistent guerrilla attack. Its ment of a joint venture" in which Sonangol
balanced in the sense that it was largely in oil exports now account for over 90 per cent has a 51 per cent share. Investment in oil ex-
the hands of Portuguese settlers who before of the country's total export revenue, lower ploration and development has been consi-
independence numbered nearly 350 000 or prices for oil having been partly offset by a derable and totalled $2,3 billion in the period
only 5,5 per cent of the total population, the rapid increase in production over the past 1980-85 and is estimated at $3 billion be-
vast majority of whom were indigenous Afri- five years. tween 1986 and 1990. Angola is particularly
cans. attractive to oil companies in view of the high
The change that came with independence success rate so far achieved in both explora-
was tragic. Economic decline began as var- Oil production tion and production and the comparatively
ious black groups, engaged in the war of Angola's oil was first discovered onshore low operating costs.
liberation against the Portuguese, disrupted near Luanda in 1955. Subsequent onshore
production and attacked the country's and offshore finds saw oil overtake coffee as
foods, railways and other infrastructure. Angola's chief export in 1973 and the Oilfields
Farms, businesses and homes were aban- country has become sub-Saharan Africa's At least 15 oil companies have been involved
doned by 300 000 white settlers who left for largest oil producer after Nigeria. In 1977, with Sonangol in the development of the
Portugal, taking with them valuable capital, two years after independence, total output country's oilfields. The major share of crude
equipment and other goods. Rival groups was 8,5 million tonnes (171 200 barrels per oil output at present comes from 7 compa-
then competed for power in the independent day). It then declined to 6,5 million tonnes nies operating in 5 specific areas. Two are
state and became locked in a civil war which (129 000 bid) in 1982, owing to a fall-off in onshore areas, the Kwanza basin near Luan-
has persisted with debilitating effects on the exploration and development. Thereafter it da and the Congo basin immediately south
economy. Large parts of south-eastem An- recovered strongly, to the extent that with of the Zaire river estuary, the latter having
gola are in the hands of the National Union new wells being opened up estimates of commenced production in 1965. Both fields
for the Total Independence of Angola (Unita), production in 1988 vary from 21,5 to 24,5 will produce some 7 per cent of Angola's oil
which has been backed by South Africa and million tonnes (430 000--490 000 bid), earn- in 1988 and they are operated by the Belgian
the United States. Unita claims the right to ing the country some US$2 000 million in ex- company, Petrofina.
share power with the present Marxist re- ports. However, with the fall in the world Far more significant was the offshore
gime, Popular Movement for the Liberation price of oil from a high of $35 a barrel in 1981 Cabinda discovery in 1966. Further dis-

Africa Insight, vo118, no 4,1988 197

I
 Ponsandhanbours-----------------------------------------------------------------------------

coveries and production in the early 1980s

brought this field's output to 58 per cent of
Angola's estimated total for 1988. It is ope-
rated by Cabinda Gulf Oil Co (Cabgoc), a CONGO
subsidiary ofthe American Chevron, with the
Italian Agip a minor partner. A second off- . ..." ...
shore field (Block 2) began operating off the r·· ( /
mouth of the Zaire river in 1980. Involved z,;,'r'e
here are the American Texaco, the French
Total and the Brazilian Braspetro compa- ZAIRE
nies. The block accounted for only 1,5 per
cent of total output in 1987 but this will ex-
pand sixfold in 1988 to 10 per cent of the .. J .. "
total when three new areas commence pro-
duction. .~.
The most recent field to be exploited
(Block 3), adjacent to Block 2, began pro-
duction in 1985. It is operated by the French
Elf Aquitane company and will produce 25
per cent of total output in 1988. This share
will increase as two further areas are brought ~_~~~ Malange .Saurlmo
into production by early 1990. The whole An-
ATLANTIC
golan coastline has now been divided into 13 10 Shaba
blocks for exploration purposes. In addition
to the activity now taking place in Blocks 2
and 3, exploration is proceeding in another 5
offshore blocks involving at least 16 interna- OCEAN
tional companies. Over the past ten years \
estimates of Angola's oil reserves have been /
steadily rising. The latest estimate puts these G 0 L A r " - ' ._ ... _. ,",J,

reserves at a life of 20 years at current pro-

duction rates.
Reproduced by Sabinet Gateway under licence granted by the Publisher (dated 2010)

Oil terminals
Angola possesses a number of loading ter- ZAMBIA
minals for the export of its oil. The first is at
Luanda where the country's only refinery is ~I
<>-:
located. This plant uses most of the coun- ~.

try's onshore production of crude oil and

distributes fuel oils, gas oil, petrol and other
petroleum products to other parts of Angola .".
as well as having a surplus of crude and fuel
.-. .. -'
oil for export. A new terminal is planned at
Luanda for the export of refined products.
NAMIBIA
.- ... - -"'-" \./
All the offshore oil produced is exported.
The first loading point is the Malongo ter-
minal, 24 km north of the small port of Cabin- o~!_ _ _ _ _ _ _ _ _ _ _ _ _ _ _4~90km

da, where Cabgoc's onshore storage facili- BOTSWANA

ties are connected by pipeline extending out
to sea for 13 km to a mooring point which
can take tankers of up to 100 000 dwt. The
(;]1
second terminal is the Soyo-Quinfuquena
Angola: Railways and ports
associated with Block 2. It came on stream
in 1982. Crude oil from two offshore fields,
the Cuntala and the Essungo, is pumped
ashore here to storage tanks and then fed by however, a considerable proportion was
pipeline to a mooring pOint some 12 km off- Ports and railways food, for Angola now has to import well over
shore where tankers can load. The third ter- The prosperity and growing volume of An- half its food needs owing to the disruption by
minal is the latest and was developed as part gola's oil exports contrasts sharply with the war of its agriculture. The Economist Intelli-
of Elf Aquitane's Block 3 project. Here oil is decline in the volume of goods handled by gence Unit reports that in 1988-89 a deficit
pumped from the Palanca and Pacassa the country's three main ports. of nearly 600 000 tonnes of maize will be ex-
fields, located some 45 km offshore, first to a In 1985 Luanda, Lobito and Namibe, once perienced, implying that nearly 350 000
nearby storage tanker, the Licome Pacifique thriving export harbours, handled only 1,5 tonnes of food aid will be required from
of 264 000 tonnes, and then from this stor- per cent of the country's commercial ex- donor countries in addition to commercial
age facility through a floating hose to sea- ports, a mere 148 000 tonnes. Imports imports of food.
going tankers. Thus the whole operation, through these harbours considerably excee- A sombre reflection of the decline in com-
pumping, storage and loading, is carried out ded exports. Of 1 487 000 tonnes imported, mercial activity through Angola's ports is the
offshore.

198 Africa Insight, vol 18, no4, 1988

I
 -----------------------------------------------------------------------------Ponsandharbou~

CONGO 39 400 tonnes in 1985 and is projected to

( ... -' O~, ___________2~QOkm
rise to 130 500 tonnes by 1990. Of this total,
international freight handled will rise from
. ./
10 500 tonnes in 1985 to 20 200 tonnes in
1990. New African describes the airport as
the busiest place in Luanda, with Russian
Aeroflot cargo planes bringing in Soviet
'-/-"';::="""-"'-"'-"'-' .. -'" -'''"'"'''. weaponry and MiG fighter aircraft landing
r7T.rT7>'T"'--_'-- \

ZAIRE and taking off continually on exercises.

'. Luanda
Luanda is Angola's capital and largest city
\ with a population of 1 200 000 in 1982, sub-
' ... _ ... ,... ... r ... sequently swelled by migrants from the war-
torn countryside. The city stands on a large
natural harbour, protected by an offshore
sandspit, in which vessels of any size can
anchor. As evidence of a run-down econo-
my, the New African describes the city as
displaying an air of "neglect and decay" in
the poverty of its commercial activity and in
its flourishing black market.
Deep water port facilities were first provi-
ded in 1945 with the building of a quay cap-
Amboim able of accommodating eight large vessels.
ATLANTIC Commercial traffic through the port has
fallen from 2 324 000 tonnes in 1973 to only
ANGOLA 942 000 tonnes in 1985. While goods loaded
OCEAN (exports) have steadily dropped from
185 000 tonnes in 1980 to 104 000 in 1985,
goods unloaded (imports) have increased
Reproduced by Sabinet Gateway under licence granted by the Publisher (dated 2010)

from 612 000 tonnes to 838 000, much of

this being food. Hodges writes that in addi-
tion to low freight volumes "port efficiency is
low, especially at Luanda". Inadequate un-
loading, transporting and storage facilities
for container traffic, poor organization and a
poorly motivated work force give rise to long
delays in clearing goods from the port.
ONSHORE AREAS
A
B
o IN PRODUCTION ARE
Luanda's rich agricultural hinterland, re-
sponsible for most of Angola's coffee pro-
~ IN EXPLORATION duction, is served by a 423 km railway to

o OFFSHORE AREAS
Malange, commenced in 1886 and comple-
ted in 1909. In pre-independence days
Luanda exported over 80 per cent of An-
gola's coffee, together with other com-
modities, and the railway carried 301 000

,,_ tonnes of goods in 1973. Since then, be-

~'~'MI'~'I~ "'-"'-"'-<i11
... / '- cause of the decline in coffee production, re-
cent competition from road transport and
- ...
sporadic guerrilla attacks, traffic on the rail-
way fell to only 63 000 tonnes in 1985.
Angola: Oil fields Improvements to Luanda's harbour and
access routes are now planned as part of a
larger programme, estimated to cost $340
fact that in 1973, before independence, they supplies from the Soviet Union, Cuba and million, to refurbish and rebuild Angola's
handled 11,2 million tonnes of incoming and other sources. According to Hodges, nearly port, railway, road and airport infrastructure.
outgoing cargo and minerals - seven times 45 per cent of government revenue in 1985 Thus roads from Luanda to Uige, to Malange
the 1,6 million tonnes of 1985. The most was spent on defence and security, and the and Saurimo, including the diamond mining
dramatic reductions in traffic have been ex- value of military imports in that year accoun- area of north-eastern Angola, are to be reha-
perienced by Lobito and Namibe as a result ted for no less than 53 per cent of total im- bilitated, as is the Malange railway. Funds for
of the closure of the railways feeding Zaire's ports. the first stages of this work are being sought.
and Zambia's copper mining regions and The considerable growth in air traffic at Over and above this programme, plans for
Angola's iron ore mining area, respectively. Angola's main airports can also be attributed the restoration of the Lobito corridor are also
The war, however, has been responsible in part to the increase in military activity. being prepared (see below), all indicative of
for a substantial traffic through the three Cargo handled has increased from 3 500 the tremendous reconstruction required in
ports of military hardware, equipment and tonnes in 1973, before independence, to order to get the country's economy back on

Africa Insight, vol 18, no4,1988 199

I
 Porlsandharbou~-----------------------------------------------------------------------------

its feet. However, until hostilities end, oil 262 000 tonnes in 1985, all of which was cluding the construction of a container ter- •
prices recover and donor countries come domestic traffic, or to only 10 per cent of the minal at the port. By the year 2000 the rail-
forward to assist financially, these plans will total carried in 1973. Even domestic traffic in way and the port should have a capacity of 3
remain nothing more than plans. 1985 was down to only 28 per cent of the million tonnes per year compared with 2,6
927 000 tonnes carried in 1973. Financial million carried by the line in 1974.
loss to the Societe Generate runs into mil- However, these estimates are question-
Lobito corridor lions of dollars, over and above the revenue able. Africa Economic Digest reports that the
Like Luanda, the port of Lobito is also pro- lost to the Angolan government at the port. chairman of Tanks Consolidated Invest-
tected by a sandspit. It has 8 berths for freig- Traffic through the port declined drastically ments, the Societe Generate's subsidiary
hters and a tanker terminal for the off-load- from 2 500 000 tonnes in 1973 to only which holds the Benguela operating con-
ing of petroleum products. Its bulk ore-load- 522 000 tonnes in 1985 and 440 000 tonnes cession, has stated that the company "has
ing plant, however, has been inoperative for in 1987, of which some 90 per cent were im- no idea how much repair work is necessa-
a number of years due to the closure of the ports. ry". Moreover, a planned meeting between
Benguela railway from Shaba in Zaire in The railway is now inoperative over nearly the SADCC and possible international
1975. This 1 300 km railway from Lobito to two-thirds of its length to the Zaire border. donors has been postponed a number of
the Zaire border was commenced in 1903 Trains run regularly on the 30 km coastal times, indicating the generally tentative atti-
and connected with the line to the Shaba stretch to the town of Benguela but inter- tude towards the line's rehabilitation while
(then Katanga) copper mines in 1931. Until mittently and under guard to Huambo some uncertainties and hostilities persist. Pros-
1950, when the Societe Generate purchased 350 km further east and very occasionally to pects for peace in Angola do seem to have
the railway from the British South Africa Kuito in Bie province. brightened in the past six months (see
Company, little use had been made of the The Benguela railway, or Lobito corridor, below) and, should the security situation
line for the export of copper or other mine- is one of five main export routes whose re- significantly improve, Tanks has indicated
rals. The Belgians preferred to use their own habilitation is a prime objective of the that it is ready to send a survey team to
rail and river route, the voie nationate, to the Southern African Development Co-ordina- assess the damage and the costs of repair.
port of Matadi at the mouth of the Zaire river. tion Conference (SADCC) in its efforts to re-
Also, by agreement, Northem Rhodesia duce the dependence of its member states
(now Zambia) exported its copper via Indian on South Africa's railways and harbours. The Namibe
Ocean ports. use of the South African transport system, Namibe, formerly Moc;;amedes, is situated
Subsequently, Zaire switched much of its particularly by Zambia, Zimbabwe and Ma- on an open bay with easy access. It was first
copper traffic to the Benguela railway not lawi, has greatly increased in recent years provided with deep water facilities in 1950.
only because this was the shortest route to because of wars in Mozambique and in the The port's main function was the loading of
the coast and to Europe but also as a result then Rhodesia up to the time of the indepen- iron ore from the mines at Cassinga, opened
Reproduced by Sabinet Gateway under licence granted by the Publisher (dated 2010)

of increased difficulties on its voie nationate. dence of these two countries in 1975 and in 1957 and located about 650 km by rail
Moreover, when the border between Zam- 1980 respectively, and as the result of con- from the port. However, due to falling profit-
bia and Rhodesia (now Zimbabwe) was tinued dissident activity on the part of Re- ability and at a time when hostilities were
closed in 1973 during the Rhodesian war, namo rebels against the Mozambican Freli- escalating in southern Angola, the mines
Zambia had little option but to make increas- mo government since 1975. During this time were closed in 1975. Mechanical loading
ing use of the Benguela route. In the process the Indian Ocean ports of Maputo, Beira and facilities for the ore are located at Porto
the railway's owners and the Angolan go- Nacala have been, in effect, partly or fully Saco, 10 km from the general cargo port,
vemment earned a substantial income from closed to Zambia, Zimbabwe and Malawi for where vessels of up to 200 000 dwt can be
the use both of the railway and the port. their intemational trade. Thus, South African accommodated. In 1973 the port handled
In 1973 the railway carried 2 567 000 outlets have had to be resorted to, at con- 6 379 000 tonnes of exports, of which iron
tonnes of commercial freight, of which traffic siderable cost since distances were much ore accounted for 97,5 per cent. By 1985
to and from Zaire and Zambia accounted for longer. The three Mozambican ports, as well traffic was down to 171 000 tonnes, of which
1 640 000 tonnes, or 64 per cent. The port of as Dar es Salaam in Tanzania, are now all in only 6 000 tonnes were exports.
Lobito handled 2 545 000 tonnes in that advanced stages of rehabilitation. In addi- The railway serving Namibe was built to
year. In 1975, during the war of liberation tion, once the use of Lobito is restored these Sa da Bandeira, now Lubango, between
with Portugal the line was put out of action five ports could more than cope with traffic 1905 and 1923. It was later extended to
and Zaire closed its border with Angola. In from Zaire and Southern Africa's landlocked Serpa Pinto, now Menongue, giving it a total
1978 the line was formally reopened after states. length of 798 km. A 90 km branch line to the
agreement between the govemments of While it is obvious that work on the Lobito Cassinga mines was later added. With the
Zaire and Angola, but only a "trickle" of corridor cannot begin until peace and secu- closure of the mines, rail traffic fell from
traffic flowed across the border as the civil rity retum to Angola, the SADCC, the Societe 6 409 000 tonnes in 1973 to 265 000 tonnes
war with Unita was now in full swing. The line Generate and the Angolan government have in 1981 and, following continuing attacks on
was closed again in 1982 when Unita re- reached agreement on a ten-year pro- the line, to 196 000 tonnes in 1985. From
sumed its attacks. gramme of rehabilitation of the railway, the Namibe to Lubango and eastwards to Mata-
In 1987 talks were held between those port, roads, telecommunications and civil la, a distance of about 400 km, the line ope-
countries concemed about reopening the aviation facilities. The estimated cost is rates fairly regularly, but beyond that town,
line, and the Societe Generate was ap- nearly $600 million. According to the Econo- for another 400 km, it has been largely in-
proached to discuss the prospects for its re- mist Intelligence Unit, this will include an operative since it runs through strongly-held
habilitation. It now owns 90 per cent of emergency phase of 1% years, costing $114 Unita territory in the province of Kuando
shares in the railway through a subsidiary million, which will at least start international Kubango.
company and the Angolan government traffic moving once more to the port. A A feasibility study of the mines has re-
owns 10 per cent. However, the security second phase, costing $305 million, will in- cently been undertaken but, the security
situation remains little changed at mid-1988 volve upgrading the port and rehabilitating problem apart, their reopening will depend
and Unita continues to keep the line closed roads and electricity supplies while a third on a substantial improvement in world
over most of its length. The result is seen in phase, to cost $156 million, will see further prices for iron ore and on obtaining the funds
the fall of inbound and outbound traffic to improvements to the port and the railway, in- necessary for the rehabilitation of the mines

200 Africa Insight, vol 18, no4, 1988

I
 -----------------------------------------------------------------------------Porlsandharbours

. and the railway. monds and iron ore. But, as has already far consideration of Unita's future role in An-
The future commercial viability of the port been pointed out, the country's potential is gola's political development does not figure
is uncertain until peace returns but a SADCC considerable. in the trilateral talks. Thus, Unita's opposition
report has been prepared with Swedish An international seminar on the rehabilita- to the MPLA government persists and its
assistance and its rehabilitation forms part of tion of Angola's coffee production was held attacks upon towns and installations, in-
the larger transportation plan for Angola, re- in February 1988, aimed at restoring "the cluding the Benguela railway, continue.
ferred to earlier. Meanwhile, in April and May outstanding role" that coffee once played in Peace in Angola will come not only when the
1988 there was a considerable escalation of the economy. The SADCC has completed a external actors - the Soviet Union, the Uni-
military and support activity at the ports of feasibility study on integrating Angola's ted States, Cuba and South Africa - are re-
Lobito and Namibe, with the advance of northern, central and southern electric moved from the scene but when the coun-
some 15 000 Cuban and Angolan troops power systems, while its proposed rehabili- try's internal divisions are also resolved.
into southern Africa as far as the Namibian tation of the country's ports and railways, in-
border. cluding the vital Benguela railway, will re-
suscitate its foreign exchange earnings and Sources:
revitalize its agriculture. Africa Analysis (UK); Africa Confidential (UK); Afri-
Conclusion For Angola, as Hodges indicates, "a re- ca Economic Digest (UK); Africa Research Bulle-
Overall, the task facing the rehabilitation of turn to peace is the indispensable condition tin (UK); African Business (UK); Angola Press Ser-
Angola's non-oil economy is daunting. for a broad based economic recovery". In vice (Angop); BFAI Market Information CNest Ger-
many); EASA, Trade and Investment in Eastern
Hodges notes that "the disruption of the the light of negotiations now proceeding be-
and Southern Africa (UK); Economist Intelligence
internal transport system is one of the princi- tween the Angolan, Cuban and South Afri- Unit (EIU), Country Profiles (annual), Country Re-
pal barriers to economic recovery". The cost can governments there are now reassuring ports (Quarter1y), Quarterly Energy Review and
of recovery will make heavy demands on An- signs that peace might be returning in the Annual Supplement (UK); W A Hance, A geo-
gola's own funds, so much of which are foreseeable future. By July 1988 these coun- graphy of modem Africa (Columbia University
going to the unproductive military sector, tries had reached agreement on a set of Press, New York, 1975); T Hodges, Angola to the
and on those from international lending principles upon which the road to peace 1990s - the potential for recovery (Special report
agencies and donor countries. Hodges sees could be based. By 1 September South 1079, EIU, 1987); Lloyds of London Press, Ports
little prospect for export diversification or for African troops had pulled out of Angola in of the World (UK); Modern Africa (UK); New
African (UK); SADCC Energy (Angola); UN Energy
the recovery within the next five years of its terms of the agreement and had retumed to
Statistics Yearbook (NY).
once major export industries - coffee, dia- bases in northern Namibia. However, thus
Reproduced by Sabinet Gateway under licence granted by the Publisher (dated 2010)

Africa Insight, vo118, no 4, 1988 201