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    Sonangol 'Cuts Costs in Half': Dos Santos

Summary

Sonangol's chair said in Houston this week that it is cutting costs and returning to basics.

by: Mark Smedley

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Sonangol 'Cuts Costs in Half': Dos Santos

Sonangol chair Isabel dos Santos told Cera Week in Houston March 7 that the Angolan state company is trying to cut costs and return to basics.

“National oil companies have over the last few years diversified their business and investments into multiple sectors; as the business grew tougher, we are now all deciding that we need to refocus back into our core business," she said: "We are seeing this not only at Sonangol but also at Petronas and at Petrobras."

She said a cost reduction plan called ‘Sonalight’ had been implemented to increase value, adding that operating arm Sonangol P&P had reduced costs between 2015 and 2017 by 50%. The aim was to make the company more resilient to price change, and much of Sonangol’s capex was being designed in a “much more conservative manner” than in the past.

Sonangol has “great gas potential” and the aim is to enhance this and its oil opportunities, she said. Its leadership team and partners need to understand it’s not only about producing, but also producing at the right cost. Last year Sonangol cancelled its $1.75bn acquisition of US Cobalt’s Angolan interests.

Sonangol held its first board meeting with Isabel dos Santos (4th from right) in the chair on June 9 2016 (Photo credit: Sonangol)

Forbes news website, citing Portuguese newspaper L’Espresso, recently reported that Dos Santos might resign as Sonangol chairman before Angolan elections in August because of rising sentiments against her family. However Portuguese paper Jornal de Negocios, quoting Reuters, reported that she said in Houston this week that she would see out her Sonangol mandate until 2020. She was appointed mid-2016 when the entire Sonangol board was dismissed. Her father is the country’s veteran president while her brother runs its sovereign wealth fund.

 

Mark Smedley