Angola’s state oil firm Sonangol has begun high-level talks with Botswana on the sale of a stake in the new $6.6 billion Lobito refinery, two senior company officials said on Thursday.
Angola has been seeking partners to help finance the delayed refinery to be operated by Sonangol’s unit Sonaref. Once completed, it would be the country’s largest refinery and is designed to curb reliance on imported fuel.
Media reports quoted Botswana’s Energy Minister Bogolo Joy Kenewendo as saying the government was considering its options to secure a 30% shareholding in the 200,000 barrel per day plant once it comes online.
Botswana’s Ministry of Energy did not immediately respond to requests for comment from Reuters.
A Sonangol spokesperson confirmed talks had taken place with Botswana Oil on an equity stake. Botswana Oil did not immediately respond to requests for comment.
The spokesperson said Sonangol expected to sign a shareholders’ agreement once negotiations were finalised without giving any possible timeline.
BOTSWANA SEEKS TO DIVERSIFY ITS FUEL SUPPLIES
Botswana, a land locked country that wants to boost storage capacity and diversify its fuel supplies, is also considering partnering with Namibia on its proposed first refinery.
However, Joaquim Kiteculo, CEO of Sonangol’s refining division, told Reuters on the sidelines of an energy conference in Cape Town the Botswanan interest was a surprise and that Zambia had been the first country to express interest in a stake.
Angola and Zambia since 2018 have had an outline agreement covering participation in the refinery.
Kiteculo said Angola was open to partnerships with new investors but would retain a 51% majority in any restructuring.
MORE FINANCING NEEDED AND TALKS WITH CHINA
A lack of financing has for years delayed the construction of the Lobito refinery. Work restarted in 2023 after a pause and no firm completion date has been made public.
Angola’s mines and petroleum minister is in China with a senior Sonangol delegation, seeking backers to overcome a $4.8 billion funding shortfall for Lobito.
Sonangol, which has already spent $1.4 billion of its own capital on road and water infrastructure in the first phase of construction, will continue to invest with or without partners until the project is completed, Kiteculo said.
With reference to the Chinese talks, he said he expected discussions would focus initially on $2.2 billion, followed later by an additional $2.6 billion.
Source: Reuters.com