Last updated: 24 February, 2012

Angola’s state oil company Sonangol pulls out of Iran

Angola’s state oil company Sonangol announced Friday it is withdrawing from a natural gas project in Iran because of international sanctions over Tehran’s nuclear programme.

The company, which also reported earnings for 2011 of $33.7 billion and profits of $3.3 billion, told reporters that operations in Iran were no longer sustainable.

“We are out of Iran due to the international sanctions imposed by the United Nations,” board member Mateus de Brito told reporters in Luanda, adding that the withdrawal was already underway.

The United States, Angola’s second biggest buyer of crude exports, has led international moves to ratchet up sanctions on Iran. Sonangol has a 20 percent stake in a project in Iran’s South Pars natural gas field.

Iran has been hit by a raft of economic sanctions by the United States, United Nations and the European Union over its refusal to halt uranium enrichment activities.

Tehran insists that its nuclear programme is solely for peaceful civilian purposes.

Sonangol is the concession holder for all oil blocks in Angola, and has operations and equity in oil projects in Brazil, Cuba, Iraq, Venezuela and the Gulf of Mexico.

De Brito also confirmed that the company’s installation in Iraq had been attacked by rockets in December, destroying several machines.

Sonangol’s new president Francisco de Lemos meanwhile said Angola’s oil production fell by 5.6 percent during 2011 to 1.66 million barrels per day.

De Lemos took over as president from long-serving Manuel Vicente, who is the new minister of state for economic co-ordination and a possible presidential successor.

The state and Songangol are so intertwined that the company is sometimes described as a parallel structure of government.

It runs its own airline, manages government housing and industrial programmes, and through joint ventures with Chinese companies is understood to be involved in negotiating oil-backed loans for the government.

The International Monetary Fund has highlighted a $32 billion gap in Angola’s national accounts, apparently because of quasi-fiscal activities by the oil company.

De Brito declined to comment on the IMF report, saying: “We will not be making any comment on this because it has already been adequately discussed by the executive and the IMF.”

Angola is Africa’s second-largest crude producer after Nigeria and oil accounts for 90 percent of the country’s exports. Despite its wealth however, half the population lives in poverty, many without access to basic services like water and electricity.