Sonangol plans to buy Luanda refinery

16 January 2007

Luanda, Angola, 16 Jan – Angolan state oil company Sonangol is at an advanced stage of negotiations with its French counterpart Total to acquire the Luanda refinery, the only one of its kind in Angola, Angolan news agency Angop reported.

According to Angop, citing newspaper Agora, the two sides have not yet reached agreement about the amount to be paid, or if the sale will include Total continuing at the refinery, which it operates and has the Angolan state as shareholder and partner.

Sonangol has been planning to buy a substantial amount of the refinery, which is only able to refine 37,000 barrels of oil per day, for some time now, particularly over the last five years when the country has been through several fuel crises.

Due to the limited processing capacity of the refinery, 35 percent of fuel on the Angolan market is imported.

The Luanda refinery, which was built in the mid 1950s, is considered obsolete and needs large investments which had been thought unnecessary due to a refinery being built in Lobito with a capacity of 200,000 barrels per day.

But the Lobito refinery has yet to begin being built, despite being announced over ten years ago. It is thought the biggest obstacle to overcome for it to be built is financial as the refinery is estimated to costs US$5 billion. (macauhub)