Sonangol 2015 Profits Tumble, 'Difficult' Year Ahead

Angolan state Sonangol has published its 2015 annual report, including a message from its CEO Francisco de Lemos Jose Maria saying that 2016 will be “difficult” for the company but that it hopes for production growth while aware that much lower oil price will keep earnings “under heavy pressure.”

Net 2015 profit fell by 66% year-on-year to $282.9mn (47.17bn kwanzas).

Francisco de Lemos Jose Maria was appointed Sonangol CEO on June 3 2016

The low oil price’s impact was evident from the number of exploration wells drilled by Sonangol last year, down from 19 in 2014 to 5 in 2015, excluding appraisal wells which were down from 8 to two.

National oil production – including foreign firms' share – grew 6% in 2015 to 1.78mn b/d, owing to new production from blocks 14 (Lianzi), Kizomba II (block 15) and Rosa & Dalia fields (block 17); it said development of Mafumeira Sul (block 0), Polo Este (15) and Kaombo (32) were priorities for 2016.

Production of LNG, LPG and condensate fell by 46% to 507,293 metric tons – largely because of zero 2015 output from the Angola LNG plant, which in 2014 had produced 87,393 mt LNG and 13,901 mt of LPG/condensate.  LPG produced from the Sanha, Cabinda gas plant, and Luanda refinery were all down on 2014. The Angola LNG plant shipped its first cargo after a two-year shutdown in June 2016; it is now on a two-month turnaround.

Sonangol said its associated gas production increased by 7.5% to 1.36mn ft³/d.

That figure though is at odds with Angola-wide gross production of 10.45bn m³ in 2014, as reported to the latest Opec Annual Statistical Review a year ago, when 2.53bn m³ were reinjected to oil fields, 7bn m³ flared, with 0.73bn m³ marketed. Flaring is likely to have increased in 2015.

The state company said its 2015 annual report and accounts were published on July 21, but they was not released to its website until August 1.

Mark Smedley