Angola’s state oil company, Sonangol, is seeking $4.8 billion from international lenders to finance the ongoing construction of its 200,000 barrel per day (bpd) Lobito refinery project.
The company said it is currently in talks with Chinese and European banks to bridge the funding shortfall and begin construction by next year.
Joaquim Kiteculo, Chief Executive of Sonangol’s refining division, said the total cost of the refinery project is estimated at $6.6 billion.
According to him, Sonangol has already committed $950 million of its own capital for the initial phase, which covers site preparation, roads, and administrative offices.
“We are not only dealing with Chinese banks, we are looking for other alternatives as well,” Kiteculo told reporters at the sidelines of an energy conference held in Cape Town, South Africa. “We are confident the financing will be raised, and the refinery will go ahead.”
Construction restart after a decade long pause
The Lobito refinery project, located in the coastal province of Benguela in western Angola, was initially launched over a decade ago but stalled due to financial constraints.
Sonangol officially resumed development of the project in December 2023 as part of Angola’s broader efforts to boost domestic refining capacity and reduce dependence on imported petroleum products.
Angola, Sub Saharan Africa’s second largest crude oil exporter, currently imports about 80% of its refined petroleum needs.
The government has launched a strategic plan to develop new refineries and upgrade existing ones, aiming to become a net exporter of petroleum products in the near future.
Kiteculo also mentioned that when completed, the Lobito refinery will become the country’s largest, helping to meet local demand and support regional supply.
The facility will feature a single train configuration with a hydrocracker unit, which alone accounts for $5.3 billion of the total project cost.
“Even though we are still dealing with funding issues, we expect to have the mechanical completion for the whole refinery in the first semester of 2027,” he said. “We also expect to produce our first batch of refined products and begin commercial operations shortly after.”
Future expansion plans
Moreover, Sonangol is working with several international partners on the Lobito project. China National Chemical Engineering Co. Ltd. is serving as the main engineering and construction contractor.
Meanwhile, U.S. based firm KBR Inc. is acting as a consulting partner after preparing the front end engineering and design (FEED) for the project.
On the financing front, Kiteculo disclosed that discussions are ongoing with major financial institutions including the Industrial and Commercial Bank of China (ICBC), Société Générale, Standard Chartered, and the African Export Import Bank (Afreximbank).
However, he did not name any confirmed external investors aside from Sonangol’s own financial contribution.
Addressing recent speculations, Kiteculo dismissed media reports claiming that Nigerian billionaire Aliko Dangote was in talks to join the project.
Dangote, who built Africa’s largest refinery in Nigeria, had recently visited Luanda, leading to suggestions of a potential partnership.
“There is no partnership with Mr. Dangote regarding the Lobito refinery. Those reports are not true,” Kiteculo stated.
Sonangol is also pursuing refinery expansion efforts beyond the Lobito project.
According to Kiteculo, the company is working with Italian energy firm Eni to upgrade the existing Luanda refinery.
The goal is to increase its production capacity from 65,000 bpd to 120,000 bpd by the year 2028.
