Angola’s oil coy pulls out of Iran, Plans Refinery

Angola’s state oil company Sonangol announced Friday it is withdrawing from a natural gas project in Iran because of international sanctions over Tehran’s nuclear programme, the French news agency, AFP has reported.

The company, which also reported earnings for 2011 of $33.7 billion and profits of $3.3 billion, told reporters in Luanda that operations in Iran were no longer sustainable.

“We are out of Iran due to the international sanctions imposed by the United Nations,” board member Mateus de Brito told reporters in Luanda, adding that the withdrawal was already underway.

The United States, Angola’s second biggest buyer of crude exports, has led international moves to ratchet up sanctions on Iran. Sonangol has a 20 percent stake in a project in Iran’s South Pars natural gas field.

Iran has been hit by a raft of economic sanctions by the United States, United Nations and the European Union over its refusal to halt uranium enrichment activities.

Tehran insists that its nuclear programme is solely for peaceful civilian purposes.

Sonangol is the concession holder for all oil blocks in Angola, and has operations and equity in oil projects in Brazil, Cuba, Iraq, Venezuela and the Gulf of Mexico.

De Brito also confirmed that the company’s installation in Iraq had been attacked by rockets in December, destroying several machines.

Sonangol’s new president Francisco de Lemos meanwhile said Angola’s oil production fell by 5.6 percent during 2011 to 1.66 million barrels per day.

De Lemos took over as president from long-serving Manuel Vicente, who is the new minister of state for economic co-ordination and a possible presidential successor.

The state and Songangol are so intertwined that the company is sometimes described as a parallel structure of government.

It runs its own airline, manages government housing and industrial programmes, and through joint ventures with Chinese companies is understood to be involved in negotiating oil-backed loans for the government.

The International Monetary Fund has highlighted a $32 billion gap in Angola’s national accounts, apparently because of quasi-fiscal activities by the oil company.

De Brito declined to comment on the IMF report, saying: “We will not be making any comment on this because it has already been adequately discussed by the executive and the IMF.”

Angola is Africa’s second-largest crude producer after Nigeria and oil accounts for 90 percent of the country’s exports. Despite its wealth however, half the population lives in poverty, many without access to basic services like water and electricity.

Meanwhile, French oil giant Total, Britain’s BP and Italy’s ENI are vying to partner Angola’s state oil company Sonangol to build the country’s second refinery, it was announced Friday.

The three firms are looking at a 50 percent stake in the new installation slated for the southern coastal city Lobito, Sonangol board member Anabela Fonseca told reporters in Luanda.

“We have begun discussions with Total, with BP and with ENI,” Fonseca said, adding that talks were most advanced with ENI, which had proposed the inclusion of its new patented refining technology.
Total previously held a 55 percent stake in Luanda’s refinery which it sold to Sonangol in 2007.

Despite being Africa’s second-biggest oil producer after Nigeria, Angola relies heavily on imported oil products because the Luanda facility, built in the 1950s, has limited capacity.