Oil Trading
The driving force of international sales of operations produced in Angola is the responsibility of the subsidiary Sonangol Comercialização Internacional (SONACI), whose focus is to promote the marketing of domestic supply, acting as an agent of crude oil commercialization and as agent for Subsidiary companies of Sonangol EP which export and import gas and refined products. It is SONACI who makes the management of Sonangol Trading Units in London (established in 1983), Houston (established in 1997), and Singapore (established in 2004). With trading offices on three continents, we can state that Sonangol's marketing activities for oil businesses are open 24 hours a day. At present, Sonangol sells 300,000 BPD in the international markets.
Trading Matters
Although Sonangol E.P.'s production is small, the oil that it trades represents its crude equity in Blocks in which it is a shareholder, as well as oil due to it through its role as a concessionaire.
Generally, the company will sell around 30 cargoes over 90 days, with each cargo, typically comprising almost a million barrels. Sonangol can choose their clients, and we prefer people who are end-users rather than traders.
The US, the largest oil consumer of the world, is still the biggest purchaser of Angolan crude, but China has moved into second place, with demand from Asia growing fast.
The value of Angolan crude
Not all oils are created equal, nevertheless, despite fierce competition from Nigeria's highly graded oils, Angolan oil sells well in the international markets. This performance can be exemplified by:
- Crude from Nemba and Palanca is light and appropriate for gasoline production and is favored by US buyers.
- Kuito’s crude is dense and has good acceptance in the Middle East where the economy is growing exponentially.
- For being good for production on fuel oil, a great majority of crude from Cabinda has lately been exported to China.
- Cabinda and Nemba come from Block Zero, Angola’s most prolific area, at the mouth of the Congo River.
- Kuito comes from deepwater Block 14.
- Hungo, Xikomba, Kissanje, Mondo, and Saxi-Batuque comes from deepwater Block 15.
- Dalia, Girassol, and Pluotonio come from Block 17 & Block 3.
For more information about the Blocks, please consult the concessions' map.
Angola's thirteen main grades of oil have quoted prices. Nemba, Girassol, and Palanca are the best quality crude type (i.e. lowest content of sulfur and asphalt) and trade at a premium to Brent. Crude from Dalia, Kuito, and Cabinda, with heavy content of sulfur and asphalt, normally trade at a discount to Brent.
Cabinda could be regarded as the benchmark Angolan crude and is a reference point for international markets. Platt’s, the commodities reporting company, considers Cabinda grade to be transparent and globally traded.