Stakeholder Sonangol

Country: Angola

Justification for SCS

Sociedade Nacional de Combustiveis de Angola or Sonangol is the largest and most influential company in Angola. It is a parastatal and holds a legal monopoly on rights to oil development and production in the country.

Stakeholder size (number of people)
a. 5,500 direct employees
b. 10,000 more jobs indirectly created in the country
c. 5-person Administration Council, with one President and 4 VPs. Main beneficiaries of “signature bonuses” that almost always come with concession awards, along with govt officials

Area of Influence
a. Geographic area
i. Has monopoly in/gives concessions on all of Angola’s oil deposits, segmented into “blocks” 0-34 just off the coast of the country (map can be viewed here)

Description of Organization
a. Who are the leaders?
i. Manuel Vicente, President of the Administration Council
b. How does one gain influence in the group?
i. From the outside – bribes, signing bonuses
ii. From the inside – specifics unknown, but certainly corruption throughout the organization
c. What issues do they care about?
i. Maintaining control over Angola’s oil
ii. Joining oil exploring/production deals with international companies on favorable terms
iii. Enriching themselves
d. What does the organizational structure look like?
i. Corrupt oligarchical parastatal
ii. Described as “the business arm of the Angolan govt” (Summit Reports)

Financial Resources (if applicable)
a. List activities that generate cash flow
i. Sonangol has a state monopoly on oil production/operations
ii. Gas production/operations
iii. Numerous subsidiaries that deal with logistics, aviation, engineering, data management, telecommunications
b. Income from activities
i. All concessions to international companies to Angolan oil field go through Sonangol
ii. International companies normally pay large, non-transparent “signature bonuses” to Sonangol as part of the contract. IMF has reported on huge discrepancies and inability to publicly track this money.
c. Profitability
i. Profit oil – oil Sonangol sells for profit after the joint venture partners take their share and Sonangol pays its expenses.
ii. KPMG found hundreds of dollars of discrepancies in reporting on this profit.

Military Resources (if applicable)
a. No arms/military resources of their own
b. However, as it is a parastatal company its operations can be protected by the govt military, as happened during the civil war

Provide a short history of the stakeholder group
a. What is their origin?
i. Formed 1976 at independence, with a mandate to manage the country's substantial petroleum and natural gas
b. How have they changed?
i. 1978, law passed to make the company the sole concessionaire for exploration and production
ii. Interests
1. Since then has grown substantially, with numerous subsidiaries at every level of business
2. Numerous foreign bank accounts
3. Has managed to secure confidentiality in business dealing with internationals: e.g. Exxon follows strict conf. clauses when dealing with Sonangol. When BP made an attempt at transparency Vicente wrote a letter to the company threatening to terminate their contract.
iii. Level of influence
1. Largest and most important company Angolan company
2. Produces and manages the oil that is driving Angola’s growth, accounts for 40% of GDP and 90% of govt revenue
3. Fully state owned
iv. Resources
1. Backed by all the resources of the state; in turn provides the engine for all of the state’s resources
c. What are their future goals?
i. Engaging in joint ventures that will allow them to expand operations and know-how but still maintain control
ii. Increasing clout in international markets
iii. Maintaining opacity in dealings