Afreximbank Throws $17.5 Billion Lifeline to Angola’s Sonangol Amid Production Decline
The African Export-Import Bank has announced a massive $17.5 billion financing facility for Angola’s national oil company Sonangol, marking one of the largest trade finance deals in African energy history as the country battles to stabilize crude output and maintain its position in a declining basin.
The facility, disclosed in a statement reported by Reuters on Wednesday, is designed to support Sonangol’s oil trading operations and general corporate funding needs, providing crucial liquidity for crude exports. Afreximbank indicated the package will be delivered through structured trade finance instruments, though key details on maturities, drawdown schedules, and cargo-linked arrangements were not disclosed. The announcement comes as Angola confronts mounting challenges in sustaining oil production following years of underinvestment and natural decline across offshore fields. After exiting OPEC at the end of 2023, arguing that production quotas no longer reflected its diminished capacity as output fell below 1.2 million barrels per day, Angola has been working to reposition its energy sector to attract fresh capital and stabilize revenues.
Despite the basin’s decline, international oil majors including Shell have shown renewed interest in Angola’s mature deepwater assets amid tighter global supply conditions. However, reversing the country’s long-term production slide remains a formidable challenge. Sonangol has not yet clarified how the new facility will integrate with existing bank lines or trading arrangements, nor has Afreximbank specified whether the financing will be tied to specific export cargoes or released upfront versus in stages.
Source: oilprice.com
