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Angola’s Oil Major Sonangol Faces New Crisis

Offshore

The President of Angola Joao Lourenço has fired Sonangol CEO Carlos Saturnino, as well as the whole board of directors. Now there are several things which seem wrong at first with the above fact. Firstly, after Carlos Saturnino took over from Isabel dos Santos, the daughter of former Angolan president/autocrat José dos Santos, Sonangol seemed to finally move in the right direction with a leaner approach to things and optimized asset portfolio. Secondly, investor confidence has just started to rise lately after international investors came to appreciate the Angolan government’s quest to bring more transparency into the oil sector and to sweeten up a bit its terms and conditions. Thirdly, it might seem somewhat trivial to fire the national oil company’s directors during an acute fuel shortage crisis, not afterwards after the blaze was doused.

When President Lourenço (oftentimes called J-Lo in a somewhat tongue-in-cheek manner) fired Isabel dos Santos in 2017, the move hardly raised any eyebrows – after all she was the living display of a past regime. Carlos Saturnino, the Sonangol-insider manager appointed in her stead, did not reveal himself to entertain political ambitions and was thus a very fitting substitute. Two years later Saturnino is fired for “public service convenience” and replaced by Sebastião Gaspar Martins. The firing took place a day after the President convened a sudden meeting with Sonangol’s board, bemoaning Sonangol’s inadequate communication with state ministries and financial institutions in the face of a deteriorating fuel deficit.

The fuel shortage came about out of the blue, the first signs of it manifested themselves on May 05. Virtually within a couple of days, the panic spread throughout Luanda to such an extent that most service stations were empty and the ones on the outskirts which still had fuel were crowded by people intent on taking home at least some stocks in jerrycans. The situation is by no means unknown to inhabitants of Luanda and other major Angolan cities – Sonangol was conditioning fuel this March when it incorrectly assessed the amount of fuel that residents would need and had a major crisis in December 2017, too.

Sonangol has argued that the fuel shortages were caused by a combination of “limited access to foreign exchange”, logistical problems across the country and piling debts from industrial users. The…




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