Bloomberg News

Angola’s Sonangol Earned $33.7 Billion in 2011 Oil Sales

February 24, 2012

(Updates with comment from Sonangol in third paragraph.)

Feb. 24 (Bloomberg) -- Sonangol EP, Angola’s state-run oil producer, said average daily production fell in 2011 even as it increased revenue because of rising international oil prices.

Angola, Africa’s second-largest oil producer behind Nigeria, pumped 1.65 million barrels per day last year, 5.7 percent less than 2010, earning the company $33.7 billion as oil prices above $100 a barrel offset the decline, Francisco de Lemos Maria, chairman of Sonangol, said in Luanda, the capital.

“The fall in production primarily affected non-Angolan companies,” Maria told reporters. “In contrast, revenue increased by 14 percent, which is explained by higher oil prices in the international market.”

The company invested $6 billion in production, Maria said. It acquired a 25 percent stake in the deepwater Block 31 from Exxon Mobil Corp., and it’s in “advanced stages” of talks for Eni SpA to acquire 50 percent of a 200,000-barrel-a-day refinery proposed for Lobito in Angola’s south, he said.

Sonangol will pull out of Iran because of international sanctions on the Middle Eastern country over its nuclear program. The situation is “unsustainable,” said Fernando de Brito, a Sonangol board member.

In December, Sonangol suspended operations in neighboring Iraq after “unknown groups” attacked its installations and launched three rockets, destroying eight trucks, Maria said.

Cobalt Probe

Gaspar Martins, executive administrator of Sonangol, said the company isn’t worried about investigations of Cobalt International Energy Inc. by U.S. regulators, who allege one of the Houston-based company’s Angolan exploration partners, Nazaki Oil and Gaz SA, has improper connections to senior government officials.

Anti-corruption activists, including Rafael Marques, have alleged that Nazaki is led by Manuel Domingos Vicente, the former head of Sonangol who was appointed Angola’s minister for economic coordination earlier this month. Sonangol oversees partnerships between foreign and domestic energy companies.

“The composition of the partnership is the most perfect possible,” Martins said in an interview after the press conference. “The U.S. will come to a conclusion when they see the process has been very transparent in the company which joined the block partnership and it went through a rigorous scrutiny to qualify.”

LNG Delay

Cobalt said Feb. 21 that the U.S. Securities and Exchange Commission and the Department of Justice are probing the alleged ties. U.S. authorities are concerned that Cobalt may have violated the Foreign Corrupt Practices Act that prohibits paying foreign officials to win business.

Cobalt holds a 40 percent share in Blocks 9 and 21 offshore Angola. Nazaki and Alper Oil, which hold 30 percent and 10 percent in the two blocks, were assigned to Cobalt as local partners by the Angolan government, Cobalt has said.

Exports from a liquefied natural gas terminal under construction in northern Angola, planned for this month, have been delayed until at least May 20 because of more testing, Anabela Fonseca, a Sonangol board member, told reporters. Production will begin in early May, she said.

Angola’s only refinery processed 41,600 barrels a day in 2011, an increase of 26 percent compared to 2010, Fonseca said. Angola imported 3.26 million tons of oil products, mostly gasoline, she said.

--With assistance from Alex Devine in London. Editors: Alex Devine, Stephen Cunningham

To contact the reporter on this story: Candido Mendes in Luanda at cmendes6@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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