Sonangol will assume, at least in the initial phase, all the investment necessary to start the construction work of the Lobito Refinery, with Chinese financing, while looking for partners for the shareholder structure of the project, the project director told Expansão. Guiomar Correia stressed that this is financing from Chinese financial institutions, including banks and other entities, “with favourable repayment conditions”, not guaranteed by oil, and the start of the works is scheduled for December.
The manager also said that Sonangol is currently in negotiations with several national and international partners to be part of the project and, as they enter, the percentages will be defined for each investor. “There is no set number of partners. But it is good to make it clear that Sonangol intends to be the majority shareholder of the refinery,” said Guiomar Correia. To be elected partners, Guiomar Correia stressed that interested parties must only demonstrate capacity in order to pass through Sonangol’s filtration and due diligence system.
The US$6 billion contract for the construction of the infrastructure was signed last week between Sonangol and China National Chemical Engineering (CNCEC). However, a source from the company told Expansão that the oil company is not able to support the payment of financing from this named company alone, not least because it has been decapitalized year after year with fuel subsidies. In other words, the relationship with the State shareholder has harmed the company’s financial performance.
The work was designed in an area of 150 hectares and was designed to produce 200 thousand barrels of oil/day, whose preparation phase took place between 2012 and 2016, and an optimization in the period between 2018 and 2021. The works even started, but ended up being suspended in 2016 at a time when the oil company was chaired by Isabel dos Santos.
According to Expansão at the time, on September 23, 2016, this suspension came four days after it was known that the contractors had paralyzed the works that, to date, had already cost about 1,000 million USD. Now, in this new phase of the refinery, the engineering of the project was done by the US company KBR, in 2021, which will also take over the supervision of the construction work. The Chinese company, on the other hand, participated in the international public tender (which was closed without practical results) for investment in the refinery, also launched in 2021 in the port city of Lobito and, even though it did not win, it was eventually chosen for the execution of the work. Guiomar Correia justified the action by the fact that CNCEC was the company that showed availability and greater capacity to mobilize financing. Among the potential investors in the region, Zambia stands out and its entrepreneurs and economic groups, who intend to explore the potential of the Lobito Corridor, and who intend to negotiate a 15% stake.
It was also recently announced that Namibia was interested in being part of the refinery’s shareholding structure The possibility of Namibia participating in the construction and operations of the infrastructure comes at a time when the country is on the verge of becoming an oil producer, after Qatar Energy, Total and Shell discovered crude oil reserves off the coast. Initially designed with a global amount of USD 12 billion, the Lobito Refinery construction project had an investment reduction of around 50%, and is expected to be executed in 40 months, until 2027.
Source: AngoNoticias