Ver Angola

Energy

Sonangol and Gemcorp Capital sign agreement to build Cabinda refinery

Angolan oil company Sonangol signed an agreement with Gemcorp Capital this Friday in Luanda to build the Cabinda refinery, which will have a daily refining capacity of 60,000 barrels of crude oil.

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According to a statement by the National Fuel Company of Angola (Sonangol), the future Cabinda refinery will be built in the Malembo plain, about 30 kilometres north of the city of Cabinda, so that demining and land treatment works for the construction of support infrastructures will begin in February.

The agreement with the company, with Russian capital, follows another pre-agreement to hand over the work to a group that included the Russian businessman, with Angolan nationality, Arkady Gaydamak, who was convicted in the 'Angolagate' case, concerning the alleged trafficking of arms from Eastern Europe to Angola, between 1993 and 2000.

Among those accused were Jean-Christophe Miterrand, son of former French President François Miterrand, and businessmen Pierre Falcone and Arcady Gaydamak, both holding Angolan passports, and former French Minister Charles Pasqua, among others.

Gaydamak was sentenced to three years in prison for selling arms to the MPLA (Movimento Popular de Libertação de Angola) between 1993 and 1995, in violation of restrictions imposed by the Lusaka agreement signed between the MPLA and UNITA (União Nacional para a Independência Total de Angola).

The new privately owned refinery project will now be fully financed by Gemcorp Capital, with three phases for its implementation, the first of which is to be installed by the end of 2021, with a processing capacity of 30,000 barrels/day.

"With the completion of the second phase, scheduled for 2023, the total daily processing capacity will be 60 thousand barrels of crude, and the third and final phase will focus on improving the production specifications of the main products, namely gasoline, diesel, Jet A1, LPG [liquefied petroleum gas], kerosene and fuel oil", the note states.

With the entry into operation of the Cabinda refinery it is expected that around 1,600 new jobs will be created, of which 400 direct jobs will be secured in the first phase, while in the second and final phase 1,500 jobs will be secured, 300 of them direct jobs.

During a technical visit in December to Malembo, to the area where the refinery will be built, it was announced that the project foresees an investment of 500 million dollars, of which 90 percent will be supported by Gemcorp and the rest by the Angolan state, through Sonaref.

Initially, construction was awarded to the United Shine consortium, but the Angolan state oil company announced that it had rescinded the contract on the grounds of "non-compliance with the agreed actions" and "no guarantee" of funding, among other aspects.

In October, Sonangol signed a memorandum of understanding with Gemcorp, a London-based investment fund management group, which has been one of Angola's largest financiers in recent years of former President José Eduardo dos Santos and has been singled out by the Angolan press as being involved in a financing scheme that has damaged the state by millions of dollars.