Can you introduce Sonangol Refining & Petrochemical Company?

Sonangol Refining & Petrochemical Company (Sonaref) is a major value asset, integral to Angola's energy matrix. As the only refining company in Angola, Sonaref currently supplies 30% of the market demand with a refining capacity of 65,000 bpd. To further enhance our value, Sonaref is spearheading three major refining projects: the Cabinda Oil Refinery, the Soyo Refinery, and the Lobito Refinery, which will have the highest processing capacity.

These projects aim to increase our total refining capacity to 425,000 bpd. The Cabinda Refinery will have a capacity of 60,000 bpd, the Soyo Refinery 100,000 bpd, and the Lobito Refinery 200,000 bpd. Currently, the first phase of the Cabinda Refinery is nearing completion, and the Luanda Refinery is processing 65,000 bpd. Our team consists of approximately 340 employees, and we generate an annual turnover of about US$1.5 billion from the Luanda Refinery.  

Can you elaborate on Sonaref’s progress on the Lobito Refinery project? 

The Lobito Refinery aims to significantly enhance Angola's refining capacity. This project holds tremendous potential, enabling Sonaref to fully supply the domestic market and export within the region, thereby eradicating the need for oil derivative imports. Additionally, the Lobito Refinery will create substantial economic benefits for the province by generating jobs, fostering new businesses, and improving the quality of life for the local population. 

Within Sonaref's growth strategy of increasing supply through enhanced capacity, the project was resumed in 2023 as mandated by the Angolan Government. Early works on the project have already commenced, demonstrating our commitment to meeting the nation's energy needs and achieving self-sufficiency. In late 2023, we signed an EPC contract with China National Chemical Engineering Co. (CNCEC), and have Kellogg Brown & Root as our PMC, as well as Dar Al-Handasah as our Technical Consultants. We are working closely with CNCEC to secure funds from Chinese financial institutions. This collaboration is part of Sonaref's growth strategy to meet the projected deadlines and ensure the successful implementation of the project. We anticipate securing the required US$4.2 billion CapEx by the end of 2024, with production targeted for Q2 2027.

How do you view Angola's current refining capacity, and what are the government’s goals and long-term vision for the country? 

The government’s vision is to fully supply the domestic market and provide neighboring countries within the Southern African Development Community (SADC) region with refined products. This strategy aims to foster new businesses and relationships with these countries, significantly enhancing Angola’s energy matrix and eliminating the need to spend foreign currency on imports. Key to this vision is the development of the Cabinda, Soyo, and Lobito projects, which will collectively add 360,000 bpd to the existing 65,000 bpd from the Luanda Refinery, which is also undergoing expansion. 

Angola’s energy mix primarily consists of hydropower (70%) and fossil fuels (30%). As a major oil producer, it is inefficient for Angola to import 80% of its refined product needs. The government’s strategy aims to reverse this by producing 100% of the domestic demand locally by 2027. Excess production from the new refineries will cater to regional markets, including the DRC, Zambia, Botswana, South Africa, and Namibia, leveraging the expansion of the Lobito Corridor railway.

Additionally, the government is liberalizing the downstream market to make it more attractive for business. The Ministry of Mineral Resources, Oil, and Gas (MIREMPET) has established investor-friendly policies, offering incentives for 10-15 years and creating favorable conditions for investment in refining and petrochemicals. Specific incentives are in place for the expansion of the Luanda Refinery and the new refineries in Lobito, Cabinda, and Soyo. These efforts are part of the strategic endeavors to attract further investment and advance these critical projects, ultimately transforming Angola’s energy landscape.