Angola Continues Sonangol Privatization Amid Progress

Angola’s Minister of Mineral Resources, Petroleum, and Gas, Diamantino de Azevedo, reaffirmed the government’s commitment to privatizing the state oil company, Sonangol. Despite facing challenges like fuel subsidies, the plan to sell up to 30% of Sonangol’s capital remains on track to modernize the company, enhance competitiveness, and transparency.

To start the privatization process, the government plans to utilize the local Bodiva exchange before expanding to international markets. Sonangol has separated its concessionaire role to eliminate conflicts of interest and align with President João Lourenço’s economic reforms to reduce reliance on oil.

Sonangol, valued at $51.5 billion and employing 13,000 workers, is one of sub-Saharan Africa’s largest oil producers with subsidiaries worldwide and partnerships with firms like TotalEnergies and Eni. ExxonMobil plans to invest $15 billion in Angola’s offshore Namibe Basin, showing attractive fiscal terms for exploration.

The privatization process includes offering preferential shares to Sonangol employees and Angolan entities for local participation. However, challenges like fuel subsidies, surplus workforce, and declining crude oil production need resolution through a shift towards renewable energy projects like solar and biofuels.

Privatizing Sonangol and Future Prospects

The government hopes privatization will attract foreign investment, rejuvenate the sector, and explore new offshore resources. Despite uncertainties about the IPO timeline, events like the Angola Oil & Gas Conference aim to attract investors and finalize partnerships for a lean, competitive Sonangol.

This privatization is crucial for Angola’s economic stability and growth, as oil accounts for a significant portion of its GDP and exports. By diversifying the energy sector and attracting foreign investment, Angola aims for long-term economic success.