Angola is implementing sweeping economic reforms to restore economic growth and correct its image of widespread corruption, state control and unfriendliness towards foreign capital. The plan includes offloading of stakes in key state assets, such as state oil company Sonangol, Puma Energy and more than 100 other enterprises. The Angolan Government published an extensive list of assets in August that will be offered to investors via public offerings, stake sales, asset sales or tenders
Faced with falling crude prices and output, years of mismanagement and wide spread corruption, Sonangol, Africa’s second biggest oil exporter faces severe cash crunch. Sonangol is regarded as the crown jewel of the Angola’s privatisation drive. The plan includes an initial public offering of Sonangol in 2022, the sale of a 28% stake in Puma, its portion of oil venture China Sonangol in 2020 and the offloading of a share of Ivory Coast refinery SIR in 2019. Among the offers, Puma Energy- Angola’s joint venture with trading firm Trafigura, is regarded as the most interesting for potential investors partly due to the lower level of expertise needed to run retail fuel and storage operations, compared with upstream oil assets.
An anti-corruption drive has gathered momentum since 2017, with the government’s crackdown on the influence of the ex-first family and reform state institutions. It also expedited pending repatriation of funds by investors and also scrapped rules requiring foreign companies to partner with a local enterprise. The World Bank is providing guidance to the asset-sale process to ensure transparency to potential investors
Angola is seeking partnership with international oil companies to develop its oil fields and halt production declines. Last year it cut down taxes on some oil fields to 10 percent and created an independent body, the National Agency for Petroleum, Gas and Biofuels (ANPG) to manage oil and gas concession sales. However, investors are of the view that in spite of the changes, Angola is still a forbidding terrain for investors with expensive production costs.
