Dos Santos Says Sonangol Turnaround May Not Finish on Her Watch

LUANDA (Capital Markets in Africa) – Isabel Dos Santos, Africa’s richest woman, said work to get Angola’s state-owned oil producer Sonangol back on track won’t necessarily be completed during her term as chairwoman.

Dos Santos is the 44-year-old daughter of former President Jose Eduardo dos Santos, who stepped down as head of state in September after ruling the energy-rich country since 1979. Her team was brought in to improve efficiency and profitability at Sonangol, which partners with companies including Total SA and BP Plc to pump about 1.7 million barrels a day of oil in the African nation.

The new team is “laying the foundations” for Sonangol to be a “resilient” company, Dos Santos said in an interview in London. “I will stay at the company as long as it’s necessary for the pillars of the plan to be set up,” but it’s possible her successors would finish the job, she said. Her term as chairwoman is due to end in 2020.

Dos Santos’s nomination last year drew criticism, with analysts saying it was “negative” that a head of state would put his children in charge of strategic industries. She has an estimated wealth of $2.5 billion including stakes in Angola’s biggest mobile phone operator and Portuguese banks, according to the Bloomberg Billionaires Index. Her appointment came after her brother Jose Filomeno was picked to head Angola’s $5 billion sovereign wealth fund.

Angola’s new President, Joao Lourenco, who was sworn in last month, has promised to tackle corruption and poverty in a country where more than a third of the population lives on less than $2 a day, according to the World Bank. Transparency International ranked Angola among the world’s 20 most corrupt nations last year.

Right Track
Dos Santos said her goal was to map out solutions to Sonangol’s problems and put it on the right track. “It’s just a question of the management being able to perform and to fulfill and execute the plan. It’s not so much about the person” in charge of the company, she said.

Sonangol’s revenue is expected to be $14.9 billion this year, up from $13.85 billion last year, Dos Santos said. She expects net debt will fall a further 20 percent this year from $10 billion in 2016 and $13 billion in 2015.

“The priority is still to restructure the company and strengthen the balance sheet” and no dividend will be paid to the state in 2017, similar to last year, she said.

The company also aims to keep Angola’s current crude production level of 1.7 million barrels a day until 2025, Dos Santos said. The output is currently restricted because of OPEC’s supply-cuts deal, but once the agreement ends Angola has the capacity to pump more, she said.

Source: Bloomberg Business News