there’s no doubt that josé eduardo dos santos and the ruling movimento popular de libertação de angola (mpla) will win its legislative elections slated for sometime this year. but recent movements at sonangol reflect dos santos’ waning confidence in his ability to hold on to executive power and to secure his wealth inside and out of angola. manuel vicente, the widely-respected ceo of state oil parastatal sonangol was moved to the ministry of economic coordination on 30 january, an important bureau that was abolished in october 2010. as one of dos santos’ closest confidants, vicente’s appointment brings him closer to formal political decision-making, and positions him well to succeed dos santos when he steps down (most likely late this year).
sonangol’s new chief executive—francisco de lemos josé maria—previously served as the company’s financial director. lemos was most likely chosen to improve the financial transparency of sonangol, after human rights watch (hrw) declared that $32 billion dollars had been unaccounted. the imf quickly rebuffed hrw’s accusation, calling it “erroneous,” and that the funds went missing in a simple accounting residual on big-ticket infrastructure projects, like housing and railway refurbishments undertaken by sonangol. this report was a public relations nightmare for sonangol, as they look to grow millenium bcp, portugal’s largest bank by assets, and change the international perception that sonangol is not just another corrupt african parastatal. already sidelined with the other economic policy ministers within the government including abraão pio dos santos gourgel and josé de lima massano, finance minister carlos alberto lopes and minister of state carlos feijó—who is the true face of the finance ministry, but has been accused of corruption—could be sacked some time this year, if not see their informal roles drastically diminished. as oil is the country’s largest foreign exchange earner, sonangol essentially functioned as the de facto treasury; now that vicente has moved, it is likely that the ministry of economic coordination will play this role.
while dos santos djs and angola’s elites play musical chairs, angola—africa’s second largest oil producer—looks to outpace nigerian oil production in the short-term by developing its pre-salt basin. cobalt and maersk announced their first discoveries on blocks 21 and 23 in january, raising the profile for angolan deep-water. there is almost perfect geological similarity between brazillian pre-salt elements, including reservoirs and rocks, seals and traps, that makes the angolan play attractive. asymetric rifting, however, has created significant differences between brazil and angola’s potential reserves; brazil’s margin is characterized by lacustrine black to light oil in its pre-salt sequences, while angola’s margin most likely has a higher amount of light oil and wet gas/condensate (making angolan lng a potential global game changer—more on this in the coming weeks). a number of companies are well positioned to take advantage of the pre-salt play, such as cobalt energy and conoco phillips, while the ishares s&p global energy etf, with seven stocks with deep exposure to angolan pre-salt, looks particularly attractive.
further, unlike in brazil where pre-salt discoveries have only been found offshore, angolan pre-salt extends onshore. dos santos is positioning politically-well connected juniors to develop this acreage, who could possibly be lured by being exempt from signing bonuses or lower tax rates than their foreign competitors. angola’s banking sector (and south africa’s standard bank) is likely to benefit from the rush of new activity—although it has much ramping up to do to prepare for the newer, larger transactions—after dos santos passed a law mandating all transactions for services and equipment must be done through angolan banks.
this is all not to say that dos santos’ carefully managed succession and oil boom could run smoothly. in the same way that vicente and dos santos have developed an extremely close relationship, lemos and the head of the casa militar, general manuel hélder vieira dias júnior, (known as kopelipa) share a similar rapport that could challenge dos santos’ political primacy and seek to place their mark on the country’s oil and banking sectors. one of the reasons the mpla party conference has been delayed is because the inability for the party to come to a consensus over who will rule after dos santos steps down. while it is very clear that dos santos wants vicente to succeed him, many of the top military brass believe vicente has not paid his dues, in the liberation “struggle.” this rhetoric is not unique to angola; other southern african countries’ succession debates, like those in zimbabwe, south africa, and mozambique, are often framed in this manner. while the probability is still low, the lemos-kopelipa bloc could very well upend dos santos’ plan for vicente.
Good afternoon….. Interesting reference….. would like to hear more about such relationships and potential synergies amongts SONANGOL executives and Government