SONANGOL and SINOPEC to build and manage Lobito refinery in Angola

20 March 2006

Luanda, Angola, 20 March – Angolan oil company, Sociedade Nacional de Combustíveis de Angola (SONANGOL) and Chinese oil company SINOPEC are due to sign in April an agreement for management and launch of Sonangol Sinopec International, the company that will own the future oil refinery in Lobito, Angolan officials said Friday.

Carlos Saturnino, the coordinator of the Lobito Refinery project (SONAREF), said that construction of the new refinery would be especialy important because of the amounts currently spent on importing oil derivatives due to a lack of capacity to treat the oil it produces.

Every year Angola spends, “between US$300 million and US$400 million,” on importing fuels, but according to Saturnino de to an increase in demand that figure cold rise in the short term to US$600 million.

The refinery, which will have the capacity to treat 200,000 barrels of oil per day, should be operational in 2010 after resolving financing problems for US$3.5 billion for its construction, which will be in the hands of South Korea’s Samsung.

The agreement, which was signed Wednesday, stipulates that the Chinese company is responsible for finding funding to build the refinery.

Angola, which produces around 1.3 million barrels of oil per day, has just one refinery, which was built in the 1950s on the outskirts of Luanda, and the capacity of which is limited to 40,000 barrels per day, which is too low to meet the increasing demand for fuel.

The project for the new refinery was presented in March 2001, and at the time was expected to be operational by the first quarter of 2006.

Angola is the second largest oil producer in sub-Saharan Africa, after Nigeria, and the country’s oil reserves are estimated at 12 billion barrels. (macauhub)