A woman walks past the head office of Angolan state oil company Sonangol in the capital Luanda, August 26, 2012. REUTERS/Siphiwe Sibeko
China’s state-run company, Sinochem Group, has recently signed a deal with Angolan state-owned oil producer Sonangol to buy crude oil for a period of 10 years.
The agreement which had in attendance the Chairman of Sonangol, Angola’s financial minister, Armando Manuel, and Zheng Zhijie, President of China Development Bank, is said to be for four or five cargoes per month, which would make the company one of the largest holders of monthly contracts to buy Angolan crude.
It would be recalled that a year ago, China agreed to lend Sonangol $2 billion to expand oil and gas projects, and Angolan President Jose Eduardo dos Santos was in China in June seeking a two-year moratorium on debt repayments along with financing for a variety of projects, including a $4.5 billion hydropower scheme.
While payment terms were not disclosed, sources said the deal directly related to loans that the Chinese government has given to Angola as its commodity-reliant economy struggles with the more than 60 percent drop in crude oil prices over the past year. However, the deal is also likely to push out another term contract holder.
There are currently around 15 cargoes given to these so-called term buyers each month from Angola’s export programmes of roughly 55 cargoes.
