A drop in foreign exchange gains and receivables from abandonment funds caused the national oil concessionaire’s net profits to fall by 1.6 trillion Kz (equivalent to 2.0 billion USD). The operating activity, which contributes very little to ANPG’s accounts, suffered due to a sharp drop in crude oil sales.
The National Agency for Oil, Gas and Biofuels (ANPG) saw its net profits drop by 65%, from 2.4 trillion Kz to 839.0 billion Kz in the 2024 financial year—a decrease of 1.6 trillion Kz, or 2.0 billion USD, compared to the previous year, according to calculations by Expansão based on ANPG’s financial report.
This decline is primarily attributed to a drop in foreign exchange gains and provisions from abandonment funds, which usually account for most of ANPG’s profits, since operating income from its core activities has minimal weight in its financial statements.
The national concessionaire, which is responsible for regulating, supervising, and promoting oil & gas activities, saw its foreign exchange gains (i.e., gains from favorable and unfavorable currency exchange rate differences) fall by 66% to 385.2 billion Kz, compared to 1.2 trillion Kz in 2023. This was mainly due to the depreciation of the kwanza, which increased financial costs and losses from unfavorable exchange rate movements by 39%, adding another 1.2 trillion Kz in financial expenses.
“Given the volume of transactions in foreign currency and the country’s exchange rate policy, the institution recorded significant losses and gains derived from exchange rate adjustments, which had a considerable impact on the financial result and, consequently, on the net income,” the agency states in its report.
In addition to reduced exchange rate gains, non-operating income also dropped 61%, falling from 1.2 trillion Kz to 469.3 billion Kz, meaning the agency lost around 719.2 billion Kz in non-operating activities.
ANPG’s non-operating income mainly consists of reinstated provisions from the abandonment fund. In practice, abandonment funds are financial resources deposited by oil operators on behalf of block contractors in a guarantee account managed by ANPG. These funds are intended to be used in the future decommissioning of oil fields nearing the end of their productive life.
With the publication of Presidential Decree No. 307/20 of December 2, up to 15% of abandonment funds can be invested in Angolan sovereign debt denominated in foreign currency (USD and Euro) to generate returns.
However, this non-operating gain is merely an accounting operation, as it does not represent an actual cash inflow for the concessionaire—in other words, no liquid cash entered ANPG’s accounts, according to the report.
As of December 31, 2024, the funds delivered by contractor groups are registered as follows:
- Treasury Bonds – 5.8 trillion Kz
- Financial investments in Treasury Bonds – 738.7 billion Kz
- Accounts receivable from former Sonangol and Total – 1.6 trillion Kz in Treasury Bonds
Audit Concerns
As in 2023, the external auditor Deloitte once again raised concerns regarding operations involving the abandonment fund. Specifically, they highlighted that the transfer of funds from Block 2, totaling 565.3 billion Kz in 2024 (513.7 billion Kz in 2023), which was recognized as a receivable by ANPG, had not been confirmed as of the report date.
“Given the information available at this time, we are unable to determine the effects, if any, of these matters on the financial statements for the year ended,” the auditor stated.
Negative Operating Result
For the first time since its creation in 2019, ANPG posted negative operating results, due to a sharp drop in operational income.
The financial report shows that in 2024, ANPG recorded operating income of 177.3 billion Kz, compared to 379.9 billion Kz in 2023—a 53% drop (a decrease of 202.6 billion Kz). Although operating costs also fell by 25%, the steep decline in income pushed operating results into the red, with a negative operating result of 15.6 billion Kz.
The main cause is the 66% plunge in crude oil sales, which dropped to 83.4 billion Kz (approximately 91.4 million USD), compared to 244.8 billion Kz in 2023. Other operational revenues (such as sales of seismic data, petroleum materials, and others) also declined by 31% (a drop of 41.5 billion Kz).
Source: Expansão
