Angolan state oil company Sonangol on its way to securing control of Portuguese oil group Galp Energia

12 March 2012

Angolan state oil company Sociedade Nacional de Combustíveis de Angola (Sonangol) is on its way to boosting its stake in Portuguese oil company Galp Energia, becoming the biggest shareholder and taking on the management of one of Portugal’s main groups.

The increase to Sonangol’s stake, which is being negotiated in Lisbon, according to information from financial news agency Bloomberg, involves acquiring part of the 33.34 percent stake owned in Galp by Italian oil company ENI, worth an estimated 3.7 billion euros.

According to the same source the Portuguese government, “does not want the Angolan company to have so much control over the listed Portuguese company,” and therefore a percentage of ENI’s stake may be sold to other investors.

According to the Africa Monitor newsletter, which is published in Lisbon, Sonangol’s interest is the result of guidelines from the Angolan authorities to buy ENI’s entire stake in Galp, which would give the Angolan company a 51 percent share if added to its indirect stake of 16 percent, via Amorim Energia, and acquisitions on the stock market.

Along with negotiations with ENI, which saw the chief executive of the Italian group, Paolo Scaroni, visit Luanda recently, Sonangol is also negotiating an exit from Amorim Energia, Africa Monitor said.

The Sonangol team that is negotiating in Lisbon is formally headed up by Batista Sumbe, a company director and president of Sonangol Holding.

ENI has long held and vast interests in oil exploration in Angola and the sale of its stake in Galp to Sonangol, either in its entirety or in part, is considered to be relatively easy to negotiate.

The Portuguese government, according to Africa Monitor, has persuaded Sonangol to be satisfied with a simple majority in Galp Energia, possibly 34 percent, which means that the acquisition of ENI’s stake would be partial.

The financial effort associated to the acquisition of the ENI stake, with the sale of the shares at an estimated 10 percent above market price, has affected the possibility of Portuguese shareholders taking a stake, as had been the wish of the Portuguese government, Africa Monitor said.

Sonangol has been increasing its interests in Portugal and recently became the main shareholder of Millennium BCP, Portugal’s biggest private bank, with a share of over 20 percent.

Sonangol’s net profit in 2011 totalled US$3.313 billion according to preliminary estimates, the chairman of the board of the Angolan oil company, Francisco Lemos de Faria said.

As the Portuguese economy is currently in crisis, which has reduced the implicit value of its biggest companies, Angolan investments have been increasing the Economist Intelligence Unit said in one of its latest reports. (macauhub)