Sonangol adds 33% stake in Block 3/05th with the withdrawal of China Sonangol Internacional from the Angolan oil market.

Following the forced distribution of China Sonangol International's last 25% stake in Block 3/05a, Angolan operator Sonangol saw its stake rise from 25% to 33.33%.

Julieta Paquete

According to executive decree 127/23 of 10 October published in the Official Gazette, it urges that China Sonangol Internacional, a company linked to Chinese businessman Sam Pa, no longer has any stake in oil blocks in Angola following the coercive distribution of the last stake (25%) it had left, given that the largest share of the stake went to the block operator,  Sonangol.

The decision to distribute comes from the Angolan government, which divided the shares between Sonangol, the French company Maurel and Prom Angola S.A., Azule Energy (BP and ENI), Etu Energias, NIS NAFTGAS and finally the British company of Afentra.

In addition to sonangol, other companies have also seen their shares grow with the forced distribution, although they are leaving the bloc, such as Maurel and Prom Angola S. A which went to 26.68%, Azule Energy which went from 14% to the current 16%, Etu Energias, which now has 13.33% against the previous ten percent,  the NIS NAFTGAS which has 5.33% against the previous four percent, in the last resort is the British company Afentra, which now adds up to 5.33 percent of its stake.

China Sonangol International is a company that had links to Sam Pa, a Chinese businessman and one of the main faces of business in Angola. It was through the negotiation of the purchase of 55% from this company that Sinopec (Chinese state oil company) acquired part of the assets it has today in Angola.

According to the newspaper Expansão, in 2015 businessman Sam Pa was arrested in China on suspicion of corruption, a fact that compromised the continuity of the company, as the company ran out of money and accumulated a series of debts in Angola, especially with its main partner, Sonangol.

The Angolan state oil company, as the largest company, absorbed part of its liabilities in the consortium where they were, and the debt increased year after year in some blocks, and as a resolution it was agreed to hand over part of the assets of this company to Sonangol as a form of debt payment.

The debt was growing and some of the partners of this block presented complaints regarding the inertia of the oil company that compromised the management of the block. That is, it did not pay the cash calls necessary to invest in the block. When a company does not pay cash calls, it is common for its share of the oil to be divided among the block partners who paid the concession bills in its account. And when you don't pay for many years, your debt is paid off with the stake.

As a result of this litigation, Sonangol entered some blocks in which it had no stake, such as block 18 where it had no stake and where it now has a stake of 16.28 percent.