Exports of crude oil have outpaced exports of refined oil because refining facilities have not been expanded at the same rate as crude oil output. In the late 1980s, all of the oil produced offshore (in Cabinda and Block 3) was exported, while the crude oil found onshore was refined domestically.
Petrangol's output was about 32,000 bpd in 1985, sufficient to meet domestic demand for most products except butane and jet fuel, while a large surplus of fuel oil was produced for export (585,900 tons in 1985). The facilities for bottling propane and butane were also expanded at a cost of US$7 million. The capacity of the Petrangol oil refinery on the outskirts of Luanda was increased to 1.7 million tons a year in 1986. In 1987 Sonangol was exploring the possibility of having some of its crude petroleum refined in Portugal.
The supply of petroleum products for the domestic market was controlled by Sonangol and increased 8 percent between 1980 and 1985. Initially, Sonangol shared the market with Shell and Mobil, but Sonangol bought out the Angolan subsidiaries of these companies in 1981 and 1983. Subsequently, Sonangol also purchased two Portuguese companies that bottled gas, gaining a monopoly over the distribution of refined products. Among these products, butane gas accounted for 65 percent of the total gas consumed locally and was used primarily in homes in urban areas. In addition, Sonangol distributed gasoline, gas oil, and lubricating oils. Its greatest distribution problems were the lack of storage facilities throughout the country and problems associated with the domestic transportation network.
In response to the fall in oil prices in 1986, the Angolan government began considering regional cooperation to protect the interests of oil suppliers. In that year, Angola was invited to join the Organization of Petroleum Exporting Countries (OPEC). Although it declared its willingness to act in concert with OPEC members to avert the growing crisis in oil prices, Angola joined the African Petroleum Producers' Association, which included four OPEC members (Algeria, Gabon, Libya, and Nigeria) and three non-OPEC oil producers (Cameroon, Congo, and Benin). Together, these eight countries produced 188 million tons of oil in 1986, equivalent to about one-fifth of OPEC's production and 6.4 percent of world production.
In the late 1980s, the major foreign oil companies operating in Angola were American. Chevron, which had taken over Gulf, owned 49 percent of the shares in the offshore Cabinda blocks, Angola's largest production area, where output was fairly stable in 1986 and 1987 at about 200,000 bpd. In 1986 President Ronald Reagan's administration pressured American oil companies and equipment suppliers to withdraw their interest in the Angolan oil industry to protest the presence of Cuban troops in Angola. Chevron therefore withdrew 20 percent of its interests from Cabgoc and sold its shares to the Italian firm Agip. Conoco, however, rebuffed this pressure and became the third American oil company to begin operations in Angola in offshore Block 5. Texaco, another major operator in Angola, operated in offshore Block 2, near Soyo, where it held a 40 percent interest in a production-sharing consortium. It also had a 16 percent interest in some of the onshore fields in the Congo River Basin.
The United States Congress also banned new Export-Import Bank lending and credit insurance for sales to the Angolan oil industry, putting American suppliers at a major disadvantage in this market. British suppliers waiting to come into the market have been delayed because of the reluctance of British banks to offer long-term or medium-term credits for such sales. However, France has entered the market, granting exceptional credit facilities for oil-related sales.
Data as of February 1989