Diamantino Azevedo says Sonangol will not be privatized in this term

"It certainly won't be in this term, yet," said Diamantino Azevedo, when asked by Lusa about when Sonangol will be ready to see part of its capital placed on the stock exchange.
The minister was speaking in Lisbon, at the end of the ceremony for the signing of a mining investment contract for the concession of Chiri diamonds, in Lunda Norte province, between the diamond company Endiama and the Rio Tinto company, in Lisbon.

"As soon as all these aspects [of the process] are resolved, or at least with conditions to go to the stock exchange, we will do so, but it certainly won't be in this term, yet," admitted the governor.

"The process of partial privatization of Sonangol of up to 30 percent started a long time ago, but the first step in achieving this objective was to remove the concessionary and regulatory function from Sonangol", explained Diamantino Azevedo, adding: "I'm sure that we would not take the company to the stock exchange as it is a concessionaire and regulator, even as a matter of principle of sovereignty".

The intention to partially privatize Sonangol was announced several years ago, but it has been successively postponed due to the complexity of the operation, but also the need to turn the company, which suffered losses of around 3 billion dollars, into the last year, more attractive to investors.

"The first step was to remove this function from Sonangol and then we started the restructuring process, which has several components", said the government official, exemplifying with the reduction of the number of subsidiaries from 19 to six, and the exit of the company from around 100 'joint-ventures' [partnerships], the majority of which are not linked to Sonangol's core business.

In addition, the government official said, Sonangol must fulfill the role of operator of oil wells: "The transformation of Sonangol into a true oil well operating company is also part of the preparation for partial privatization, because so far it operates only 2 percent of wells, and the medium-term target is 10 percent."

In answer to Lusa's question about the date of the stock exchange of Sonangol's capital, Diamantino Azevedo also admitted that some of the ongoing steps do not depend on the company, stressing that there are aspects of the process that are part of the Government's powers.

"There are other steps that do not depend on Sonangol, that depend on the executive, such as the subsidy to petroleum products, the relationship between the State and Sonangol, which we have to resolve, and we are still working on the Sonangol brand, which will change from a hydrocarbon company to an energy company," he stressed.

The Ministry of Mineral Resources, Oil and Gas signed with the diamond company Endiama EP and the company Rio Tinto, in Lisbon, a mining investment contract for the concession of Chiri diamonds, in the province of Lunda Norte, whose production is expected to start within five years .

The exploration area that was the object of the agreements reached in the various rounds of negotiations carried out with Rio Tinto, since April 2019, has an extension of 108 square kilometers, with an exploration period of 35 years, disclosed the Government.

Rio Tinto is an Anglo-Australian multinational, with headquarters in London (United Kingdom) and Melbourne (Australia), and is represented in more than 20 countries.