Industry Trend Analysis - Sonangol Reshuffle Does Little For Reform Momentum - JAN 2018

BMI View: Whilst the dismissal of Isa bel D os Santos as head of Sonangol marks a notabl e political consolidation by President Jo ao Lourenc o, we continue to see limited scope for reform momentum at the state oil company or a meaningful deviation from Angola's wider energy policy status quo under the leadership of Carlos Saturnino.

Joao Lourenco, President of Angola, has dismissed Isabel Dos Santos as head of Sonangol, a role she had held since June 2016. Dos Santos was replaced by veteran Sonangol executive Carlos Saturnino, the previous secretary of state for oil. The decision by Lourenco marks an important step in the consolidation of his own political power, with the installation of a political ally in the most important revenue stream for Angola, the oil and gas sector. Lourenco also made sweeping personnel changes to the Sonangol board, with eight new board members announced. Tellingly, the President also dismissed several key executives associated with ongoing restructuring and transparency work, previously brought in by Dos Santos, including personnel from PriceWaterhouseCoopers and a former Chevron manager.

Although the latest move marks the first direct political move against the Dos Santos power base in Angola, we do not expect Lourenco will look to mount any significant challenge to the petro-state model developed by his predecessor. Similarly we do not see any immediate reformist momentum from the latest personnel changes.

Production Outlook Unchanged By Sonangol Shake-Up
Angola Oil Production Forecast
e/f - BMI estimate/ forecast. Source: BMI/EIA

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