The Billion-Dollar Debt Deals Exposing an Oil Giant
Equinor Pulls Out of Japan’s Offshore Wind Market Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
Last week, Angola's state oil company, Sociedade Nacional de Combustíveis de Angola (Sonangol),secureda $2.65-billion financing deal with a consortium of international banks to fund the company's operating expenses and capital investments.
The financing was heavily backed by a syndicate of foreign lenders including Société Générale, First Abu Dhabi Bank, Standard Bank of South Africa and Absa, while local Angolan banks, including Banco Fomento de Angola (BFA), Banco Millennium Atlântico and Banco Angolano de Investimentos (BAI), chipped in with $105 million.
The deal is the latest in a series of financing deals completed by Sonangol since the beginning of the current year, with the companyhaving secureda $1.75 billion facility from the African Export-Import Bank (Afreximbank) in January to support its working capital needs and crude trading operations, shortly before it raised $750 million in international markets through a five-year bond carrying a 10% coupon in the same week.
Sonangol is still hunting for more capital, with the company currently seeking an additional $4.8 billion from Chinese and European lenders to cover a funding deficit for the planned $6.6-billion Lobito Refinery.
Unfortunately, a deeper dive into Sonangol's flurry of financing deals uncovers major weaknesses in the Angolan oil model.
While the massive capital raise from international banks appears like a big seal of approval of Sonagnol’s operations, it actually underscores how a lack of core profitability, diversification into unrelated business and declining production are choking the country's energy champion.
First off, Sonangol’s core Oil & Gas operations are barely profitable.
The companyreporteda respectable net profit of 862.4 billion Kwanza ($940 million) for its 2025 financial results; however, Sonangol’s upstream exploration and production(E&P) operations generated a miniscule Kz97.1 billion ($105 million) in actual profit despite generating generated a massive Kz4 trillion ($4.36 billion) thanks to to astronomical costs, asset depreciation and taxes.
The company’s downstream refining and distribution segment fared even worse after posting a Kz820.3 billion ($895 million) loss in a single year.
Fully 53% of Sonangol’s profits in 2025 did not come from its core business, but rather from dividends paid by external corporate stakes in Portugal’sGalp Energia(OTCPK:GLPEF), Millennium BCP bank and the Angola LNG project.
Sonagol owns a 22.8% stake in the Angola LNG project alongsideChevron Corp.(NYSE:CVX), with a 36.4% stake, whileBP Plc(NYSE:BP),TotalEnergies(NYSE:TTE), andEni S.p.A.(NYSE:E) each own a 13.6% stake apiece.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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