Exclusive: Sonangol delays payments as it battles to reform

Wed Nov 23, 2016 8:41am EST
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By Libby George

LONDON (Reuters) - Angola's state oil company Sonangol has amassed hundreds of millions of dollars in debts and deferred payments to oil majors and contractors while its new chief, Isabel dos Santos, attempts to reform its operations.

Contractors say they have waited months even for small payments from Sonangol, which handles the oil and gas reserves of Africa's second-largest oil exporter.

The delays began following the appointment of dos Santos, the daughter President Jose Eduardo dos Santos, in June to root out waste and corruption at a company that was struggling even before oil prices plunged.

As she worked to unravel the company's myriad debts and repayments, outgoing cheques ground to a halt.

Contractors and sources close to Sonangol said it is months behind in payments to nearly every entity it works with, from cash calls worth hundreds of millions and smaller payments of hundreds of thousands.

"They haven't paid us, but we are talking to them," a source at one contractor told Reuters. "They're trying to make reforms but there is a cash flow problem."

Sources told Reuters that those owed included Chevron (CVX.N: Quote), Total(TOTF.PA: Quote), BP(BP.L: Quote), ENI (ENI.MI: Quote) and ExxonMobil [EXXO.UL]. Sonangol has asked for a moratorium on other debts until the end of the year, they said.

This is the most significant effort yet to reform the central pillar of sub-Saharan Africa's third-largest economy and one of the continent's biggest companies.   Continued...

Cars are seen infront of the head office of Angola's state oil company Sonangol in the capital Luanda, Angola. June 7,2016. REUTERS/Ed Cropley