London — Angola has signed up French oil company Total and trading house Trafigura to provide imports of key refined oil products such as gasoil, gasoline and marine gasoil for the next 12 months, state-owned Sonangol said.
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The news came as Africa's second-largest oil producer, which is heavily reliant on refined product imports, has been experiencing a fuel crisis due to a lack of foreign exchange.
Total will supply Angola with gasoline for the next 12 months, while Trafigura will be responsible for imports of gasoil and marine gasoil. Angola depends on refined product imports for more than 80% of its total demand due to a shortage of refining capacity.
Under the previous tender (2018/2019,) Total supplied the country with 1.2 million mt of gasoline while Glencore was responsible for imports of 2.1 million mt of gasoil and 480,000 mt of marine gasoil. Trafigura lost Sonangol as its key customer for refined products in the 2018/19 tender.
Angola has traditionally been heavily reliant on trading houses like Trafigura and Vitol, with the former being very active in the country's oil sector.
Total is a key player in Angola's upstream sector, operating some of its pivotal deepwater oil fields, while Trafigura is an active trader of crude and refined oil products in southern and western Africa.
Sonangol said it issued a tender late February with 29 companies invited, "including those that currently supply the respective products, to ensure the necessary competitiveness and results efficiency".
Nine companies were shortlisted including BB Energy, BP, Eni, Glencore, Gunvor, Litasco and Vitol, as well as Total and Trafigura.
"It should be noted that with the results achieved in the tender held, the supply of these products is ensured for the next 12 months, thus complying with the best guidelines for the market to see its needs met without oscillations," Sonangol said.
Earlier this month, Angolan president Joao Lourenco began a shake-up at Sonangol, dismissing Carlos Saturnino as chairman and removing other top executives as the country suffered severe fuel shortages.
It was the second time in less than two years Lourenco shuffled the leadership at Sonangol, which has been under financial pressure over the past five years.
Sonangol has said "difficulties in accessing currencies to cover the costs of importing refined products" had caused the fuel shortages.
The Angolan downstream sector is the one of the least diversified in sub-Saharan Africa.
Angola's economy, which depends on oil for about 98% of its export revenues, has been fragile due to the significant fall in oil prices since mid-2014, and its output has not grown as expected in the past two years, further hurting the economy.
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