Since it was established in 1976, Angola’s national oil company (NOC) Sonangol has become one of the country’s most important companies, boasting an extensive network of subsidiaries and partners that are involved in almost every sector of Angola’s economy.
Due to an abundance of lucrative oil reserves, Sonangol has long been the beating heart of Angola’s economy. At present, despite the current low oil price, oil remains the source of approximately 98% of the country’s foreign exchange and 75% of government revenue (Oxford Institute for Energy Studies, 2017). Sonangol effectively funds the entire Angolan economy, and all revenue generated by oil production in Angola goes through Sonangol in one way or another.
Often described as an ‘island of competence’ in Angola’s post-war economy, Sonangol has provided the government with the bulk of its revenues for more than 40 years, and on the surface, Sonangol has traditionally been viewed as a highly successful NOC, and is well regarded by the international and regional oil industry.
However, a decline in oil prices has drawn attention to some Sonangol’s less flattering aspects.
- Under former President José dos Santos’s firm control, Sonangol has become a lucrative source of personal income for the former president and his family and friends.
- Unchecked by official institutions and accountable only to the President, Sonangol has been allowed to develop political and economic influence beyond its official duties as a national oil company.
- While on the surface Sonangol has traditionally been viewed as a highly successful NOC, and is well regarded by the international and regional oil industry, declining oil prices has revealed concerns about mismanagement in Sonangol, and throughout Angola’s oil industry.