In the bustling economic landscape of Angola, Sonangol, the nation’s state-owned oil company, is entering a pivotal phase. They’re deep in negotiations with both Chinese and European banks, aiming to bridge a $4.8 billion gap crucial for the Lobito refinery project. This initiative is not just a financial maneuver; it’s a transformative leap towards energy independence. Imagine a refinery equipped to process a staggering 200,000 barrels of crude each day, reshaping Angola’s energy sector. According to Reuters, this could redefine the regions’ economic dynamics.
If you think about it, Angola holds the title as Sub-Saharan Africa’s second-largest exporter of crude oil. Yet, somewhat paradoxically, a whopping 80% of its refined petroleum products are imported. The over-reliance is akin to having a fish-rich sea but relying on distant markets for seafood. So what’s next? The Lobito refinery stands as a beacon of change. At its core, this project signifies a push underlined by a government-driven ambition to phase out fuel subsidies and bolster energy self-sufficiency.
Let’s journey back to December 2023, a month that marked a rekindling of ambition. Construction of the refinery in the Atlantic port city of Lobito resumed after a pause of nearly ten years. Picture this: once completed, it will stand as Angola’s largest refinery, a monumental step in the nation’s energy narrative.
“We are not only dealing with Chinese banks, we are looking for other alternatives as well,”
explained Joaquim Kiteculo, the dynamic CEO of Sonangol’s refining division, amidst the vibrant setting of an energy conference in Cape Town. The air was thick with optimism as he continued, “We are confident the financing will be raised, and the refinery will go ahead.”
Key Financial Partners
The stakes are high. With the total project soaring to $6.6 billion, every step counts. The single-train refinery, featuring a sophisticated hydrocracker, is projected to consume $5.3 billion of this amount. Here’s where it gets interesting. Sonangol is already deep in advanced talks with financial titans such as the Industrial and Commercial Bank of China, Société Générale, Standard Chartered, and Afreximbank. Each potential partner brings unique strategic advantages to the table.
It seems Sonangol isn’t solely relying on external partners. They’re channeling $950 million of their capital into the project’s initial phases, emphasizing infrastructure development like roads and administrative buildings. It’s a leap of faith backed by strategic vision.
Behind the scenes, a blend of global expertise steers the project. China National Chemical Engineering Co. Ltd. is helming construction and engineering duties, while the expertise of Houston-based KBR, key in the front-end engineering and design phase, reinforces the endeavor.
Amidst all this, rumors have their place. Recently, whispers—those captivating yet elusive tales—suggested that Nigerian billionaire Aliko Dangote, fresh from his triumph of building Africa’s largest refinery in Nigeria, was eyeing a partnership for the Lobito project. Upon investigation, these rumors were firmly dismissed by Kiteculo himself, adding another layer to the unfolding narrative.
But the bustling refineries can’t capture all the spotlight. Sonangol’s existing Luanda refinery is undergoing a significant upgrade, orchestrating a rhythmic partnership with Italy’s Eni. This collaboration aims to enhance capacity from 65,000 barrels per day to an impressive target of 120,000 by 2028. Within this potential, they’re also exploring the frontier of a biorefinery, driven by a vision for sustainable aviation fuel.
In Angola, where the juxtaposition of potential and opportunity weave a complex tapestry, the Lobito refinery project stands as a testament to the nation’s ambition, crafted by the hands of collaboration, perseverance, and an ever-present quest for independence.
Edited By Ali Musa
Axadle Times international–Monitoring.
