Carlos Saturnino, the Chairman of Sonangol, Angola’s state oil firm, announced plans to divest 52 joint ventures, reduce staff and focus on its core business.
The oil firm noted that the initiatives are part of an ongoing reorganisation and package of reforms designed to lure back investors.
At an oil conference in Paris, Saturnino said “we are going to sell, close or put out of our group a lot companies. Last year, we identified 52 joint ventures in which we want to sell our equity”. He added that “instead of investing in Australia, United States etc, Sonangol wants to become an oil company of reference in the African continent. This is major change for us”.
Oil accounts for 95 percent of exports and around 70 percent of government revenues in Angola, Africa’s second-largest producer.
Saturnino attributed steep decline in production and lack of investments to lack of efficiency in decision-making by the previous administration.
In 2018, Angola’s oil production fell to 1.478 million barrels per day (bpd) from 1.632 million bpd in 2017. As a result of the decline, industry veteran Saturnino was brought back by Angolan President Joao Lourenco in September 2017 to help turn around Sonangol and reform the sector.
According to Saturnino, “lack of efficiency in approving projects led to a backlog of around $5 billion in projects between 2015 and 2017”. He noted that the logjam had been mostly cleared and the number of projects gaining approval was rising.
The Chairman also revealed that Angola had put in place reforms to relaunch exploration and attract oil majors to invest. He said Sonangol has carried out analysis on oil blocks with Total and ENI, and has held talks and signed initial agreements with Exxon Mobil. Most recently, it met with Shell to try to lure it back to the country.
Saturnino said “we have 10 to 12 potential blocks up for exploration in Angola, so the potential is there”.