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Angolan state oil giant Sonangol recorded 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 sales of ‘assets, 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, based on annual results of 238 pages.
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.
The company said the disappointing performance in 2020 was “the result of the drastic reduction in revenues from crude oil sales” due to the pandemic, although Angola’s annual oil production is slightly higher than in 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 30 percent listing of the company’s own capital. It sold its loss-making business arm Puma Energy to Trafigura for $ 600 million this year.
Updated: September 18, 2021, 4:00 a.m.
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