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State-run oil company Sonangol in Angola plans $1 billion cost savings

Staff writer |
Sonangol EP, the state-run oil company in Angola, is seeking $1 billion in cost savings by the end of the year to help cope with plunging crude prices.

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The company plans to renegotiate contracts with partners and probably won’t fire workers, Chief Executive Officer Francisco de Lemos Jose Maria told reporters on Monday in the capital, Luanda.

Sonangol said in February it will cut this year’s spending by 25 percent, end most retail fuel subsidies and reduce contract costs by as much as half.

A more than 40 percent slump in oil prices in the past year has slashed revenue in Africa’s second-largest crude producer, forcing the government to scale back spending and devalue the currency.

The company, the biggest in Angola, denied reports in Portuguese media on the weekend that it was technically and financially bankrupt.

Sonangol is “stable” and doesn’t expect substantial changes in its business this year, it said in a statement on Sunday. Operations in Houston, Singapore, London, Brazil, Venezuela and Cuba are continuing, it said.

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