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Africa’s Luanda and Juba in the top five most expensive oil towns for expats

Angola’s capital Luanda and South Sudan’s capital Juba have been ranked by hydrocarbons news provider Rigzone as the first and third most expensive oil and gas towns for expats in the world.

The ranking, based on this year’s Mercer’s Cost of Living survey and similar data produced by expat management solutions and research firm ECA International, shows that African oil and gas towns are among the most expensive in the world for expatriates.

“While natives to a particular country can rely on local knowledge to keep their own living costs down, expatriates – especially with a taste for comforts from back home – are finding that certain African cities are among the most expensive places in the world to rent accommodation or even to buy a pair of jeans,” reported Rigzone.

However, of the five most expensive oil and gas towns for expats, only two were from Africa. In fifth place was Perth, Australia. According to the ECA’s list, five of the top 50 most expensive cities in the world are located in Australia.

Rigzone places Russia’s capital Moscow in fourth place as the most expensive oil and gas town for expats. Mercer ranks the city as the second most expensive place in the world for expats, while ECA ranks it at number five.

The third most expensive oil and gas town for expats, according to Rigzone, is Juba in South Sudan. South Sudan is Africa’s newest country, having become independent from northern neighbour Sudan in July 2011, taking a large portion of Sudan’s oil reserves with it.

“Today, companies such as China National Petroleum Corporation, India’s ONGC Videsh and Malaysia’s Petronas are running the country’s oilfields – which were pumping some 300,000 barrels of oil per day until a shutdown in January 2012 due to a row with Sudan over oil fees (South Sudan relies on Sudan for oil exports),” stated the report by Rigzone. “Production at various oilfields within the country is currently restarting.”

Southern Sudan was at civil war with its northern counterpart until 2005 when a peace agreement was signed. The country has since seen an influx of United Nations and NGO workers, along with oil companies and workers. Rigzone states this has helped drive up prices in the capital Juba, “especially for the kind of accommodation sought by people from more developed countries.”

The ECA rates Juba as the world’s fourth most expensive city for expatriates, noting the generally high costs of expat accommodation and exporting and transporting items typically purchased by international assignees.

Luanda: the most expensive oil and gas town

Luanda is ranked as the most expensive oil and gas town for expats in the world. The capital city of Angola just beats Stavanger of Norway on Rigzone’s list for this title (Stavanger is ranked by the ECA as the world’s third most expensive location for expats in general).

Angola is one of the top oil producers in the world today, over a decade after it was ravaged by almost 30 years of civil war. “The country’s vice minister for petroleum recently stated that it has 13bn barrels of proven oil reserves,” added Rigzone.

Along with the hope of further discoveries, Angola has seen a considerable influx of international oil companies and workers and Luanda has experienced a rise in costs for expats, according to Rigzone. Both Mercer and the ECA rank Luanda as the world’s most expensive city for expats in general.

“For example, Mercer found that the typical cost to rent a luxury two-bedroom unfurnished apartment in Luanda is US$6,500 per month (a similar apartment in Sydney, Australia would cost just $2,550 per month). Meanwhile, a fast food hamburger meal costs just over $20 while a pair of blue jeans retails at $204,” according to Rigzone’s research.

However, a How we made it in Africa source who has been working in Luanda for several years stressed that some costs depend on where you shop in the area, with retailers such as Shoprite and Kero offering considerably cheaper products compared to other retailers typically known by foreigners and expats.

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