Angolan state-run oil firm Sonangol will start building a long-delayed $8 billion refinery this year in a bid to cut back on imports of refined products, which have weighed on the economy, its oil minister said. Jose Botelho de Vasconcelos said the new 200,000 barrels-per-day refinery would enable Angola to become self-sufficient in refined products.
The oil-producing nation's sole 37,500 bpd refinery accounts for around 30 percent of domestic needs. "We consider that the only way Angola will get out of this situation is to build a new refinery," he told Reuters in an interview.
"The conditions are in place for the construction to begin this year." The new refinery, located in the port city of Lobito, in southern Angola, was originally expected to be ready by 2011. Due to a series of financing delays, the start date is now expected to be in 2014, according to the latest government forecasts.
There are also plans to build a third refinery near the coastal town of Soyo in nothern Angola, which is also the site of the country's first liquefied natural gas plant, Botelho de Vasconcelos added, without providing details. "This is something that is on the table," he said.
He said Angola would soon start liberalising its oil refining, storage, transportation and distribution businesses, all currently held by state-owned oil company Sonangol, in a move meant to open the downstream oil sector to foreign firms.
But the move is also expected to pave the way for an end to gasoline subsidies, which could trigger unrest among many Angolans who see such subsidies as one of the few benefits from living in one of Africa's top oil producers.