INTERNATIONAL ANGOLA–NORWAY: A PERFECT PARTNERSHIP Norway has won widespread respect for raising its people’s living standards to one of the highest in the world. Universo looks at the resource-rich country’s ties with Angola 6 SONANGOL UNIVERSO MARCH 2014 7 Shutterstock The Oslo Opera House Angop INTERNATIONAL INTERNATIONAL Sovereign development 4.Netherlands 0.921 5.Germany 0.920 6. 0.919 Central to Norway’s good housekeeping is its sovereign wealth fund (SWF), into which it has been depositing part of its oil and gas revenue since 1990. Norway’s SWF is the world’s largest and is currently worth roughly $820 billion. The government spends income of around 4 per cent a year from the fund, and this helps pay for Norway’s high levels of healthcare, schooling and pensions that are the envy of the world. It also means that Norway has substantial aid available to donate to poorer countries. Norway donated $4.75 billion in foreign aid in 2012, far more than many larger economies. Its donation as a percentage of gross national income is even more impressive at 0.93 per cent. That is twice the amount of leading economies such as Germany (0.38 per cent) and more than five times that of the United States. Inspired by Norway’s example, Angola is also developing a SWF and made an initial $5 billion deposit in 2012. A delegation from Angola’s SWF led by Dr José Filomeno dos Santos visited Norway in October 2013, where it attended a meeting of the International Forum of Sovereign Wealth Funds coordinated by the International Monetary Fund. 7.Ireland 0.916 Diplomatic connection 8.Sweden 0.916 9.Switzerland 0.913 10.Japan 0.912 United Nations Human Development Index 1.Norway 0.955 2.Australia 0.938 3. 0.937 United States New Zealand Source: United Nations Development Programme, March 2013 8 SONANGOL UNIVERSO “Today, Angola is Norway’s biggest and most important economic partner in Africa.” – Ambassador Ingrid Ofstad distribution of wealth. Many see it as a shining example of how a country should best manage and distribute its resources. Buoyed by oil sector wealth, Norway is at the top of the United Nations’ Human Development Index (HDI), which ranks countries by their economic and social well-being. The HDI combines data on life expectancy (reflecting health standards), educational levels and standard of living. Norway celebrates 37 years of diplomatic relations with Angola this year. Its first energy sector cooperation dates back to 1980 when Norway helped sponsor the energy secretariat for the Southern African Development Community (SADC), that was first established in Luanda. The Nordic country drew on its experience and expertise in developing Statoil: Current Angola portfolio Shutterstock S uperficially Norway and Angola have little in common; ice covers large parts of Norway even in midsummer, whereas sunshine bathes Angola in year-round warmth. Despite sharp climatic contrasts, the two countries share some striking similarities in geography and natural resources, says Norway’s ambassador to Angola, Ingrid Ofstad. “Norway, like Angola, has a long coastline with abundant petroleum and fish resources. Norway, just like Angola, has mountains and waterfalls, with potential for hydropower and the development of clean energy. These similarities present a unique opportunity for mutually beneficial cooperation. “Today, Angola is Norway’s biggest and most important economic partner in Africa,” she adds. Norway has similar oil output to Angola at just less than 2 million barrels per day and is Western Europe’s largest oil and gas producer. The country enjoys one of the highest standards of living in the world and is much admired by other developed economies for its comprehensive welfare services and relatively equitable Dr José Filomeno dos Santos offshore activities in the North Sea to start oil sector cooperation with Angola in 1987. “Cooperation in the petroleum sector is vibrant and steadily growing,” says Ambassador Ofstad. Several Norwegian companies have set up operations in Angola. For Norway’s leading oil company Statoil, Angola represented around 28 per cent of the volume of its foreign production in the third quarter of 2013. Statoil in Angola Oil is by far Norway’s largest area of cooperation with Angola. Statoil sees Angola as “a perfect strategic fit for Statoil, and the conditions there match perfectly with our strengths built up over decades predominantly in Norway.” The company has been in Angola for almost 21 years and is a partner in eight producing offshore fields, which contribute approximately 200,000 bpd to its portfolio. Angola’s continental shelf is the largest contributor to Statoil’s production outside Norway and is a key building block for Statoil’s international production growth, says the company. Pre-salt exploration Statoil sees Angola’s pre-salt region as having high potential, given its geological similarity to a successful exploration area in Brazil. Statoil was designated operator in promising pre-salt areas located in Blocks 38 and 39 in December 2011, where it is partnering Sonangol P&P and thus potentially entering a new and exciting era. The Norwegian company was also awarded partnerships in three other pre-salt blocks (Blocks 25 and 40, both operated by Total, and Block 22, operated by Repsol) in the Kwanza Basin. Statoil is now focusing its main activities on the goal of initial production of the first well around two years after having signed a production-sharing contract. As part of pre-salt exploration activities Statoil, along with Total and BP are undertaking the world's largest ever 3D seismic survey. Statoil is surveying 26,000 sq km of the presalt licence areas off the coast of Angola and has fast-tracked the seismic imaging so as to be able to move quickly towards drilling exploration wells. Norwegian differential Statoil enjoys closer links with Sonangol than most other oil companies, thanks in part to its contribution to developing its operational arm, Sonangol P&P. The Norwegian company sees this partnership with Sonangol as significant, and representing one of the most successful initiatives it has implemented in Angola. It is also a differentiating factor for Statoil compared to other international oil companies. This cooperation dates back to 1999 when Statoil was appointed technical assistant and signed an agreement to provide Sonangol P&P, Block 34 Asset Statoil Stake Block 17 23.33% Block 15 13.33% Block 31 13.33% Block 4/05 20% Block 15/06 5% Pre-salt assets operated by Statoil Block 38 55% Block 39 55% Statoil partnerships Block 22 20% Block 25 20% Block 40 20% MARCH 2014 9 INTERNATIONAL INTERNATIONAL Team with fully qualified and trained Angolan professionals to help develop Sonangol P&P over a period of 5–10 years. Joint work in the 5,000 sq km Block 34 included the exploration and drilling phase and achieved substantial and sustainable results in a very short period of time. These included the establishment of a complete local drilling team taking full responsibility for Sonangol’s deepwater drilling operation while assisted by only one senior Statoil drilling engineer and the full use of the company’s drill steering documents and work routines. The West Africa region including Angola is the third largest export market for the Norwegian oil supply industry. Norway’s largest exports to Angola are rig and drilling services and subsea equipment and installation. Hammerfest Iron Ore Kirkenes Tromsø Harstad RUSSIA NORWAY 400 km 100 FINLAND 200 miles Bodø ARCTIC CIRCLE SWEDEN Iron & Steel Mo i Rana Fishing /sea port Timber Mining Steel NORWEGIAN SEA Shipbuilding Petroleum Drilling Companies and organizations in Angola with links to Norway Trondheim Oil field Gas field Kristiansund Mixed (oil/gas) National capital City/town OSM Florø NORWAY Brent Aker Solutions Oseberg Bergen 250 km 0 RKK Oslo Drammen 250 mi B A LT I C S E A Karstø Stavanger rw eg SCOTLAND ian Tr e n ch Kristiansand Siemens Aberdeen LATVIA (UK) Grangemouth DEN. LITHUANIA Population: 5 million Arable land: Land area: 385,186 sq km Capital:Oslo Coastline:25,148km (including fjords and islands) OneSubsea DOF Subsea PGS Angola GE Norway facts 10 SONANGOL UNIVERSO Odfjell Drilling ESTONIA Rogaland No Forties Angola benefits from Norwegian knowhow FMC Technologies Mark Clydesdale BZO 0 Norwegian companies invest $2 billion to $3 billion a year in Angola Statoil Alesund Flow Maritime boundary Companies from Norway invest $2 billion to $3 billion a year in Angola. Statoil alone has invested well over $10.5 billion to date. “The Angolan market interests Norwegian companies, but nevertheless they must learn how to enter Angola. It’s an interesting but difficult market,” says INTSOK’s Regional Director for Angola, Gulbrand Wangen. “It’s a good market for large companies. The small ones have more difficulties because the country is very expensive. One of the challenges is to find local partners owing to the legislation that demands 51 per cent must be in the hands of Angolans.” Wangen also sees environmental services, where Norway has experience and expertise, as another area for greater cooperation. “There are strong prospects for Norwegian environmental companies. 2.87% Main industries:Oil and gas production, fishing, shipbuilding, paper, timber DNV-GL INTSOK Farstad Shipping/Kuona & Farstad Lda Norse Cutting & Abandonment (NCA) Marine Subsea AS/Interoil Angola Heine Melkevik - Statoil 0 Technical solutions developed in the highly challenging conditions on the Norwegian continental shelf (NCS) are also used to maximise the recovery factors in Angolan fields: one is the subsea separator developed by Statoil/FMC Technologies, which had only previously been used once on the NCS (Tordis field) and is now an important part of the Pazflor development in Block 17. Norwegian Oil and Gas Partners (INTSOK) views Angola as a priority market with total investment and operational costs reaching $90 billion in 2014–17. This makes it the sixth largest market, after Brazil, Norway, USA, UK and Australia. For comparison purposes, INTSOK believes both Brazil and Norway markets will be worth $200 billion each in the same period. Harald Pettersen - Statoil 200 0 OSLO Narvik Technical expertise MARCH 2014 11 Harald Pettersen - Statoil Angola has new legislation on the environment for the oil sector, and this legislation will demand new technologies, and Norway has this technology. That’s why it’s an area that we aim to explore.” and development of local content, such as FMC, Aker Solutions, Cameron, and National Oilwell Varco. RKK has been supporting Angola’s National Oil Institute (INP) in capacitybuilding in skills related to the oil industry by training instructors in Norway and advisory services for management and procurement of equipment. RKK’s assistance was financed by the Norwegian government. Subsequently, RKK supported INP in developing the first phase of a Statoilfinanced offshore safety centre which includes first aid and firefighting. RKK has also delivered training courses to Norwegian Angola-based companies for their employees through courses from RKK’s office in Namibia. There is also an important cooperation between Angola’s Agostinho Neto University and the Norwegian University of Science and Technology (NTNU) at Trondheim. Here Statoil and the Norwegian government jointly finance around 10 Masters degree scholarships in Petroleum Engineering each year. Clean energy Oil and gas apart, Norway has long been renowned for its clean energy production from its hydroelectric dams, which supply around 98 per cent of its needs. It is the sixth largest producer of this form of energy after China, Canada, Brazil, the United States and Russia. There is much room for Norway to expand its cooperation in hydropower with Angola. Angola currently invests $3 billion a year in this area and has only around 10 per cent of the electricity generation it needs. Norway’s current hydropower capacity is around 30GW, while Angola has around 2GW. Angola plans to have a total of 7GW by 2017, and the Norwegian government believes additional Angolan water power generation can be installed relatively easily. Norway currently provides technical assistance in water power to Angola. Norwegian Water Resources and Energy Directorate signed a new cooperation agreement with Angola in January 2013. Areas of cooperation include the development of a legal framework as well as competence-building in terms of hydrological data and energy efficiency. Norwegian company Statkraft is Europe’s biggest renewable energy company and is already investing in Africa through its subsidiary, Agua Imara, in Mozambique. Seafood resources Norway is also famous for its success and careful management of its fish stocks. It is the second largest seafood exporter in the world, and more than 36 million meals of Norwegian seafood are served worldwide every day. Norway’s famous salmon is sold globally while its cod is particularly popular in Angola. Dried salted Norwegian cod has been traded with southern Europe since the Viking period in the 9th century and probably then began its connection with the Portuguese-speaking world. Through its Ecosystem Approach to Fisheries (EAF), Norway’s EAF Nansen programme, the country has assisted Angola in mapping its marine resources since 1985. It is a cooperation agreement between the Ministry of Fisheries in Angola and the Institute of Marine Research (IMR) in Norway. The EAF Nansen programme addresses fisheries issues in the Benguela Current countries of Angola, Namibia and South Africa. Its aim is to contribute to a viable fishing industry based on sustainable fisheries management practices and also strengthen administrative, technical and managerial capacities in prioritised areas. Some examples of the current (2013–16) programme’s components are: to improve Angola’s fsheries information system, to increase Norway the capacity to transform research recommendations into management measures, to increase the competence of fisheries inspectors, observers and instructors, to further improve regional cooperation on combating illegal, unreported and unregulated (IUU) fishing, to make improvements in the assessment of fish resources; and to continue supporting students of masters or PhD programmes in relevant topics. People-to-people “Ties between our two countries also include important people-to-people Training support elocultural 12 SONANGOL UNIVERSO A taste of Norway Photo Harald Pettersen - Statoil The Rogaland Training & Education Centre (RKK) is a Norwegian foundation active in Angola that has supported the development of local content. Rogaland is the region around Stavanger, Norway’s most important oil industry base. In the period 2009–13 RKK partnered Angola’s Ministry of Public Administration, Employment and Social Security (MAPTSS) in a capacity-building project through vocational courses at training centres in Luanda, Cabinda and Soyo. This pilot project concentrated on skills such as welding, hydraulics, electronics, technical drawing and machine maintenance. It enrolled 669 students and also trained 82 instructors. The project has established a basis for further development of apprenticeships and direct recruitment to industry. A number of contractors to the oil and gas industry have supported the project carefully manages its fish stocks relations. Norwegian People’s Aid (NPA) and Norwegian Church Aid (NCA) are among the biggest foreign NGOs in Angola,” Ambassador Ingrid Ofstad points out. These bodies, partly financed by Statoil, are doing vital work such as clearing landmines, sinking water wells and building organisational capacity in local civil society. NPA has helped train Angolan personnel in demining and to remove 296,873 unexploded items from its territory. Mine clearance has covered the equivalent of more than 70,000 football fields since 1996. NCA is a strategic partner in Angola of the Norwegian government, which provides most of its funding. “NCA has been working with local partners in Angola since the mid-1980s, with a strong emphasis on partnerships with churches and faith-based organisations,” explains Vibeke Skauerud, NCA’s representative in Luanda. “Religious leaders are respected authorities in Angola, both at local and national levels, and represent a large part of the population. Working with churches and faith-based partners is therefore different than working with traditional civil society organisations, as they are able to reach a wider network of communities and beneficiaries. Churches are also able to mobilise much more effectively at community and grass-roots levels. At the same time, religious leaders have access to authorities at all levels and can be MARCH 2014 13 Shutterstock INTERNATIONAL INTERNATIONAL INTERNATIONAL “Ties between our two countries also include important people-to-people relations.” – Ambassador Ingrid Ofstad A Lusophone view of Norway Shutterstock Translator Maria José Maciel, a Brazilian who has spent some time in Angola, has lived in Norway for over two decades. How does she find it? “In my 22 years here, I’ve noticed how much more cosmopolitan and open the country is. Today, the immigrant population now accounts for 14 per cent of the population, which is around 5 million. It’s really nice to see, in the capital, people of every ethnic group and styles mixed together on the streets. “One of the great advantages of living in Norway is to be able to count on the support of the social welfare system the country gives its citizens. Even though many complain about the high taxes, a person who is unable to work has the right to benefits like maternity and paternity leave, unemployment benefit, and sickness and training pay. Parents also receive ‘family 14 SONANGOL UNIVERSO salaries’ for children under 18, and all young people have the right to free schooling, medical and dental assistance. “One of the difficulties people face when they arrive here is to get used to the dark and cold in winter and the low temperatures in summer. In Oslo, the average temperature in summer does not go above 21 degrees Centigrade and it rains half the time. Despite this, the season transforms people, who become happier and more communicative, and keener to make the most of life. “If you come to visit, don’t miss trying some local dishes and traditional foods such as fårikål, a soup of lamb, potatoes and cabbage; brunost, a sweettasting brown goat’s cheese; hot dog with prawn pâté and fried onions; or even lutefisk, a special dish of cod with mustard, diced bacon bits, white sauce, pea purée and potatoes.” Shutterstock systems and by helping communities start savings and loans schemes that provide them with alternative income,” says Ms Skauerud. A good example of how the churches can fill the role of messenger, connecting communities with their local administrations, she explains, is the popular NCA-supported social monitoring programme of the Angolan council of churches. Here the churches consult community members about what they need in order to improve their way of living; the churches then provide input to the local government on their plans, and thereafter they follow and monitor the progress of the government plans. p Shutterstock Norway's famous Northern Lights priority. The organisation also distributed mosquito nets. NCA has also been active within the field of HIV/AIDS, supporting local organisations and churches which care for people affected. NCA also helps victims of gender-based violence, including the opportunity to start a new life after receiving vocational training. “The latest focus of NCA and our partner’s work is aimed at helping communities become less vulnerable when facing the challenges of climate change. This is done, by among other initiatives, promoting alternative agricultural methods and crops, by designing and constructing irrigation Shutterstock messengers or go-betweens on behalf of the poor and destitute.” Ms Skauerud lists some of NCA’s main achievements over the past three years, such as providing water and sanitation to 15,693 people in rural communities in Zaire, Uíge, Kwanza Sul and Benguela. In 2012–13 alone, NCA and its partners built eight complete water systems and provided 9,107 people with clean and safe drinking water. The aim is to reach 30,000 beneficiaries by 2015. NCA projects have also focused attention on improving sanitation in these communities. In 2012–13 NCA built 314 latrines in 12 communities and gave lectures on hygiene and sanitation, with schools a special Shutterstock INTERNATIONAL MARCH 2014 15
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