ANGOLA: PAYING FOR THE WAR WITH OIL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000100400001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: November 9, 2009
• Sequence Number: 1
• Publication Date: August 22, 1985
• Content Type: REPORT

Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
DIRECTORATE OF INTELLIGENCE
22 August 1985
ANGOLA: Paying for the War With Oil
Summary
Crude oil sales accounted for about 90 percent of the $2`?
billion in hard currency that Angola earned in 1984. Cabinda'
Gulf Oil Company operations--jointly owned by Gulf-Chevron and
the Angolan government--accounted for $1.4 billion, or 76
percent of the total. Some $900 million of this foreign
exchange was used for imports from and debt payments to Western
countries. We believe that the bulk of the remaining $1.1
billion--60 percent of oil sales--went to purchases and credit
payments to the Soviet Union, Eastern Europe and Cuba largely
for military assistance. He believe that if Gulf-Chevron were
to sell its Angolan oil holdings, little disruption of oil
production would occur since French and Brazilian oil companies
probably would be ready buyers.
This memorandum was requested by Phillip Ringdahl, Director African
Affair nal Security Council. It was prepared by
Southern Africa Branch, Office of African and Latin
American Analysis. It was coordinated with the Directorate of
Operations. Comments and queries may be directed to the Chief, Southern
S E C R E T
Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
 Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85TO1058R000100400001-1
Angolan hard currency earnings totalled $2 billion in 1984, some 90
percent of which came from oil sales (see table 1).
we believe that oil production last year averaged
200,000 barrels per day, including some 130,000 barrels per day produced
by Cabinda Gulf oil fields. The Angolan government received approximately
60 percent of total oil export earnings, or $1.1 billion
Aside from petroleum, the only two significant
export earners for Angola in 1984 were coffee and diamonds, which together
contributed some $200 million, or about 10 percent of hard currency
According to UN trade data, $900 million of Angola's 1984 har0
currency earnings of were spent on imports from Western countries,"
including interest on debt (see table 2). Given the decline of the
domestic economy and the reversion of agriculture to subsistence levels,
these imports--primarily food, manufactured goods and machinery--are vital
to feeding the urban population and supporting the war effort. We believe
that the bulk of the remaining $1.1 billion--minus what the oil companies
remit in profits--is used to fund purchases from, or m credit payments
to, Communist suppliers, the recent
decline in crude oil prices has left Angola with little spare hard
currency to save as foreign reserves.
We believe Angola pays for most of its military assistance--weapons,
foreign personnel and support--in hard currency. Although some have been
provided as grant assistance and others for full cash payment on delivery,
most were obtained on long-term credit. In addition, Angola pays for a
large contingent of instructors, trainers, specialists, and technicians to
provide the expertise necessary to operate and maintain the equipment.
Angola also pays hard currency
for the Cuban combat force that supplements the Angolan Army in defense of
We believe that if Gulf-Chevron or other US companies involved in
Angolan oil production were to offer to sell Angolan oil holdings, little,
French and Brazilian oil companies--w ose current
nqo an operations have important US investment--have been anxious to
expand their involvement in Angolan oil. The Brazilian oil company
Petrobras has engaged in countertrade with Angola to increase ties to that
country. Given the strong toehold that Petrobras and the French company
ELF Aquitaine already have in Angola, they probably would have little
difficulty taking over for US companies.
25X1
25X1
25X1
LZDAI
25X1
LJA I
S E C R E T
Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
 Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
TABLE 1: Angolan Export Earnings (1984)
Export
Quantity
Average Price
Value
Crude Oil
175,000 barrels per day
$28/barrel
$1.8 billion
Coffee
22,750 tons
$2400/ton
$0.06 billion
Diamonds
760,000 carats
$165/carat
$0.12 billion
$1.98 billion
S E C R E T
Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
 Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
TABLE 2: Indentified Angolan Import and Debt Service Payments
Import Category
Food, live animals, beverages,
tobacco, edible fats and oils
Raw materials, mineral fuels
lubricants, chemicals
Machinery and transport
equipment
Value in US$ millions Precent
180
21
Other Manufactured goods
Goods not identified by kind
Debt service
Source: UN trade data.
S E C R E T
Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
 Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1
Distribution:
Original -- Phillip Ringdahl, Director African Affairs, NSC
1 -- Donald Gregg, Office of the Vice President
1 -- Frank Wisner, Deputy Assistance Secretary of State,
Bureau of African Affairs
1 -- Robert Cabelly, Special Assistant to the Assistant
Secretary of State, Bureau of African Affairs
1 -- Anthony Dalsimer, Director INR/AA, Department of State
1 -- NIO/Africa
1 -- NIC/AG
1 -- PDB Staff
1 -- D/ALA
1 -- ALA Research Director
- ALA/PS (one sourced copy;
- one clean copy)
4 -- OCPAS/IMD/CB
~"-- ALA/AF
6 -- ALA/AF/S
ALA/AF/S/I I (22 August 1985)
S E C R E T
Sanitized Copy Approved for Release 2009/11/09: CIA-RDP85T01058R000100400001-1