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Archive for July 18th, 2012

Sonangol: An Economic Octopus

Posted by Business in Ghana on July 18, 2012

By Tom Burgis, www.ft.com

A tale of two financing deals encapsulates the breathtaking expansion of Angola’s state-owned oil company. In 1989, when Angola was tearing itself apart in civil war, Sonangol, the state-owned oil company, struggled to secure a $60m six-month credit line. Nowadays, bankers say, it commands multibillion-dollar borrowing facilities that stretch over 10 years.

Respected abroad, it is all-powerful at home. From the sizeable stakes it routinely takes in oil ventures led by international groups and its growing portfolio of operatorships to its interests in infrastructure, banking and real estate, the literary prize it offers and Petro, the football team it owns, Sonangol is an octopus enveloping the economy. Many observers say it is a sovereign wealth fund in all but name, spreading petrodollars around the globe. “It’s like the tail wagging the dog,” says one international official in Luanda. “It’s not a state-owned oil company: it’s like an oil company that owns the state.” Read the rest of this entry »

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Rival to Nigeria as Prodigious Source of Crude

Posted by Business in Ghana on July 18, 2012

By Tom Burgis, www.ft.com

On the morning of Friday February 10, the oil world was abuzz. Cobalt International Energy, a midsized explorer backed by Goldman Sachs, had announced what was potentially one of the biggest discoveries of recent years.

The find in Angola’s Kwanza basin was a “game changer”, in the words of one veteran oilman. Cobalt’s well, drilled to a depth of 4.9km through a thick layer of salt, had found a reservoir the Texan explorer estimates to contain 1.5bn barrels of crude.

It confirmed a new energy frontier. If the so-called “pre-salt” region proves as rich as early indications suggest, it would set Angola on course to join the big league oil producers over the coming decade. Read the rest of this entry »

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