Sonangol, CNCEC Begin Construction on Major Oil Refinery in Lobito Sonangol is currently underway in developing a refinery in the northern Angolan city of Soyo that will be capable of producing up to 100,000 barrels of crude per day
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Sonangol, Angola's state-owned oil company, and the China National Chemical Engineering Company (CNCEC) began construction in late October on the Lobito Refinery, a new petroleum processing facility that will expand Angola's crude oil production and reduce its reliance on energy imports.
The contract for the Lobito Refinery was signed on Oct. 24 and provides for the construction, technical support, and supervision of the construction process. Scheduled to come online in 2025, the Lobito Refinery will produce 200,000 barrels per day of light and high-quality petroleum products. The estimated cost of the investment is approximately $6 billion, said Diamantino Azevedo, Angola's minister of mineral resources, oil, and gas.
The facility will give Sonangol access to a greater quantity of Angola's estimated 9 billion barrels of untapped crude oil preserves, which officials say will help alleviate the country's external dependence on refined gasoline and oil imports.
Angola's economic capacities are paradoxical: the country holds massive reserves of crude oil but currently depends heavily on imports. The country produces more than 1 million barrels of oil a day yet continues to spend nearly $2 billion on petroleum product imports every year. As the central African nation of more than 30 million continues to grow, officials see facilities like the Lobito Refinery as essential infrastructure needed to power an emerging economy.
Located near the midpoint of Angola's 1,000-mile Atlantic coastline, the Lobito Refinery is strategically positioned to receive crude oil from offshore platforms, like the ones Sonangol is currently building in the fossil-fuel-rich Kwanza Basin, and convert it into petroleum products to be shipped across Angola's vast interior and to markets in neighboring countries.
The refinery is expected to help supply petroleum products to the Republic of the Congo and Zambia, Angola's neighbors to the north and east, respectively. Officials hope that this connection could spur regional economic growth and collaboration while reducing the carbon footprint associated with transporting fuels vast distances to reach south-central Africa.
Lobito is one of several capital projects in which Sonangol has invested over the last half decade.
Sonangol is currently underway in developing a refinery in the northern Angolan city of Soyo that will be capable of producing up to 100,000 barrels of crude per day. Ringing in at $4 billion, the Soyo project is expected to become the largest ever investment in Angola. Sonangol is also constructing another refinery in Cabinda, set to distill 60,000 barrels of refined oil daily. The Cabinda Refinery is set to utilize equipment built and tested in Houston.
Angola is one of the world's largest oil producers and stands as a member of the Organization of Petroleum Exporting Countries. It recently surpassed Nigeria as sub-Saharan Africa's top oil-producing country. The petroleum industry forms almost 75 percent of the country's revenues.
With the construction of the Lobito refinery underway, Angola could help inject much-needed supply into a global energy market that has been roiled by inflation, shifting economic headwinds and instability in several other major oil exporting countries.
Central to Angola's oil industry is Sonangol. From Angola's independence from Portugal in the 1970s until a corporate restructuring in the late 2010s, Sonangol was the chief steward and sole concessionaire of Angola's subsurface resources reserves, which include hydrocarbons like petroleum and natural gas. Today, Sonangol remains responsible for the exploration, extraction, refining and marketing of Angola's vast oil reserves.
Sonangol has been owned wholly by the Angolan state since its founding nearly 50 years ago, but this could soon be changing. Angola's energy ministry recently announced that in accordance with the country's Propriv policy, which seeks to bring private ownership and incentive structures to many of the company's state-owned industries, it will privatize up to 30% of Sonangol's total equity by 2026.[A4]Where