Angola to start oil production at Cabinda refinery in the year-end

Angola's planned 30,000-barrel-per-day Cabinda oil refinery, the first to be built since independence a half-century ago, will begin producing fuel by year-end, the Southern African country's oil and gas minister said on Monday. Angola will benefit from the project which will be its second refinery. It will also help reduce Angola’s dependence on expensive fuel imports, as government attempts to eliminate fuel subsides have led to deadly protests.

Diamantino zevedo said, "Today, we can confirm that Cabinda is entering its decisive stage and that, by the end the year, Angola would have the first commercially produced derivatives at this unit," at a ceremony of inauguration, which was also attended by Angola’s president.

Gemcorp, an emerging markets investment company based in London, is the biggest shareholder of the plant. It previously stated that the first phase will supply between 5-10% the fuel requirements for the country.

Sonangol, the state-owned oil company, holds the remaining 90% of the shares and supplies feedstock to the refinery. Sonangol reports that Angola imports 72% of its fuel needs, or 3.3 million tons of refined petroleum each year. Gemcorp reported last year that the investment for the first phase was between $500 and $550 million. This is higher than the initial estimates due to inflation and the pandemic.

The second phase will increase crude processing capacity to 60,000 bpd, and bring online a hydrocracking unit that produces diesel and jet fuel.

Azevedo stated that construction of the 100,000 bpd Soyo Refinery is under review because of constraints presented by Quanten Consortium, a private developer led by the United States.

Azevedo did not provide any further information. However, Azevedo stated that construction of the Lobito refining plant would resume after a thorough evaluation and "significant cost savings." Sonangol's executive told reporters earlier this year that the company was in discussions with Chinese and European lenders to cover a $4.8 billion funding gap for its 200,000 barrels per day Lobito refinery. (Reporting and editing by Rod Nickel; Wendell Roelf and Miguel Gomes)

(source: Reuters)