Sonangol seeks investors in new refinery

LUANDA, October 10, 2017 – Sonangol is seeking a partner to build a new refinery in the country, NOC head Isabel dos Santos said Monday.

Speaking at the FT Africa Summit, Dos Santos said consumption of refined products is set to rise in Africa and potential investors in the refinery project include operators, traders and financiers.

The announcement came despite the August 2016 suspension of work on the USD 8-billion Lobito refinery, known as Sonaref. In a statement at the time, Sonangol said the project was of great importance, but added that given the current state of the Angolan oil sector, all investments needed to be thoroughly reviewed. Works on the Lobito refinery started in 2008, and the 200,000-bpd facility was expected to be completed in 2018. The one refinery currently operating in the country only provides about a fifth of the country’s needs. About USD 1 billion is estimated to have been spent on Sonaref’s construction so far.

LEADERSHIP COMMENTS: The daughter of the previous president also said her role was “not subject to the election” and that last week’s board reshuffle would reduce costs at the NOC. Sonangol is aiming to bring production costs down to USD 40-50 per barrel, or even USD 20-30 for some projects, and make its contracts more attractive to upstream companies, she told Reuters at the conference. “You need to have a company that’s more agile, more competitive, more profitable … and whose governance is more similar to the private sector,” Dos Santos said. She added that natural gas consumption would grow more quickly than oil and would form a key part of the NOC’s diversification strategy.

Isabel dos Santos was appointed chair of the NOC in June 2016 by her father, then-President José Eduardo dos Santos. The move came shortly after the April 2016 announcement that Sonangol would be restructured.