Angolan oil giant Sonangol lost $ 4 billion in pandemic last year

Cars are seen outside the headquarters of Angolan national oil company Sonangol in the capital Luanda, Angola. June 7, 2016. REUTERS / Ed Cropley / File Photo

  • Sonangol 2020 results show loss of $ 4.1 billion
  • Total liabilities stood at $ 26.8 billion
  • The oil giant took out two new loans totaling $ 1.5 billion
  • Asset sales have yet to resolve debt issues before the 2022 IPO

LONDON, Sept. 17 (Reuters) – Angolan state-owned oil giant Sonangol posted a net loss of $ 4.1 billion in 2020 as the COVID-19 pandemic slashed sales and the company struggles to ease its heavy debt with asset sales, according to its annual results released this week.

The company is the engine of the Angolan economy and is at the heart of a state effort to lift its people out of poverty and ease the country’s huge debts to China and other lenders.

Sonangol’s total liabilities stood at $ 26.8 billion at the end of 2020, using the average official exchange rate for the year, while debt repayments alone cost it $ 2 billion. dollars, based on 238-page annual results.

The company took out two new bank loans totaling $ 1.5 billion in 2020, while another of $ 850 million was agreed this year with a borrowing option of an additional $ 450 million.

Sonangol said debts owed to Western oil companies operating its oil fields were not reflected in its results. Such liabilities could amount to around $ 1 billion, sources told Reuters, although the company has not commented on the figure. Read more

The company said the disappointing performance in 2020 was “the result of a drastic reduction in revenues from crude oil sales” due to the pandemic, although Angola’s annual oil production is slightly higher than that. from 2019.

He cited a global oil glut as travel restrictions hammered demand, as well as weaker purchases from its main customer, China.

Even before the pandemic, in 2019, Sonangol saw no profit from its core oil business and only a modest overall profit of $ 125 million.

The company announced a sale of stakes in eight flagship offshore oil blocks in June to help ease debt, but no buyer announcements were made.

Sonangol has made little progress towards plans to privatize non-core aspects of its business, resulting in a listing of 30% stake in the company itself. It sold its loss-making business arm Puma Energy to Trafigura for $ 600 million this year. Read more

Reporting by Noah Browning Editing by Pravin Char

Our Standards: Thomson Reuters Trust Principles.

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