Ver Angola

Energy

Sonangol: Faster We Run Out Of Funding Than Out Of Oil

The executive director of the exploration and production unit at the oil company Sonangol said that "it is more likely to run out of money than to run out of oil", referring to the reduction in financing in the sector for environmental reasons.

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"A lot of people say we're going to run out of oil, but I think we're more likely to run out of money long before we run out of oil," Ricardo Van-Deste said during a session on the oil company at Africa Oil Week in Cape Town .

The Sonangol leader recalled that the struggle to attract foreign investment in the oil industry has increased due to increased environmental concerns, with many institutions abandoning investments in oil, but also because of the financial constraints of the companies themselves.

"The day may come when the banks simply won't give us more money," he admitted, explaining that the problem is not exclusive to Sonangol or Angola, but to the entire African continent and the continent's national oil companies.

To respond to this challenge, Ricardo Van-Deste said Sonangol is looking for alternative lenders to find capital to expand its operations, having started by divesting fringe companies such as a travel agency, hotels and food services.

"We have identified eight blocks that will be included in our 'divest to invest' strategy, according to which we have the exploration of blocks and the production of assets, which gives the opportunity for interested companies, with various aspects, to enter the market without having to go through a national tender", he explained.

These eight blocks have a low profitability or higher exploration costs and their sale will give Sonangol a financial proceeds that will be used to finance new investments in more profitable assets, added the manager regarding this balance of the portfolio, which will be crucial to give space for the company to honor its financial commitments.

According to the note sent to Lusa by the organization of Africa Oil Week, obtaining financing will come not only from the dispersion of part of the capital on the stock exchange, but also from the implementation of the company's new strategy, now that it no longer has the role of regulator from the market.
"This was a turning point because we were finally able to focus on being an operator," said the company's executive director, Osvaldo Inácio, quoted in the statement.

"We have a very ambitious five-year plan, structured into five different categories, and which is focused on building capacity, innovation around technology and partnerships, on the security of operational structures and on increasing not only production, but also profitability and, last but not least, in financing", pointed out the official.

Aiming at being the biggest African oil producer, the leader of Sonangol said that "looking at all the projects in Angola, Sonangol will be the biggest investor in oil and gas from 2021 to 2025".

On the energy transition, which has made many oil companies reduce investment in oil and bet on renewable energies, or transitional ones, such as gas, Osvaldo Inácio said that gas is important, but oil cannot be rejected overnight. the other.

"We talk a lot about gas and how we can use gas, but we have to consider one thing: to use gas, we need to find and explore for gas; Angola has traditionally been an oil country, and now there are new regulations that they allow companies to explore gas, and we have to explore to find more gas and favor a cleaner energy environment", pointed out the manager, concluding that the transport and distribution part is also important.

In addition to promoting gas exploration, the country is moving towards the establishment of a gas transport infrastructure to improve distribution and exploitation in the country, although this raw material is still little used, it is also read in the statement sent to Lusa.