An overhaul of Angola’s energy sector poses a test for Trafigura’s close-knit relationship with the west African country, as the Opec member restricts spending and forges ties with rival trading houses during the prolonged oil slump.

In the past year energy bankers say Angola’s cash-strapped state oil company, Sonangol, shunned a $500m fundraising at Puma Energy, a fast-growing fuel retail and storage business it has invested in with Trafigura.

This comes as Trafigura and other Puma shareholders look at different options to fund the company’s expansion, bankers say, with public listing in London or elsewhere, among options being examined.

Vitol, the world’s largest independent oil trader, has also broken into Trafigura’s near-monopoly over the supply of diesel, gasoline and liquefied petroleum gas into Angola, signing a deal to import refined fuels.

Angola is a lucrative target for trading houses which can import lower quality fuels to African countries where standards are not as high as in Europe or North America.

While sources close to Trafigura say the longstanding relationship with Sonangol remains strong and that it remains the biggest importer of refined fuel into Angola, the moves illustrate how one of the industry’s most enduring relationships is evolving as Luanda tackles the first prolonged oil price downturn of its post civil war era.

Puma, which bought the UK’s struggling Milford Haven oil refinery last year and converted it to a storage terminal, approached its shareholders in late 2015 with a plan to raise $500m to fund further expansion during the downturn.

While Trafigura and Puma’s other big shareholders agreed to back the deal in proportion to their stakes, Sonangol did not, leaving the company $150m shy of its target.

Sources close to Trafigura say Sonangol backs Puma’s strategy and gave its blessing to the fundraising even though its stake was slightly diluted. Sonangol paid $500m to boost its holding from 20 per cent to 30 per cent in 2013, a deal that placed a $5bn valuation on Puma.

Sonangol said it remained “committed” to its investment in Puma and “continues to be a major shareholder” with representatives on the board. Trafigura declined to comment.

In an effort to save cash Sonangol has been cutting back elsewhere. It recently suspended work on a new oil refinery in the port of Lobito and a new fuel storage terminal it was building north of the capital Luanda.

Sonangol’s decision to award Vitol a one-year deal, which started in January, to import gasoline and liquefied petroleum gas is also being scrutinised by rivals in the industry.

“It’s a fundamental change,” said one oil industry executive. “The Angolan business was once the cornerstone of Trafigura.”

France’s Total, one of the largest oil producers operating in Angola, has also signed an initial agreement with the government in Luanda to explore setting up a forecourt business in the country. Currently all petrol stations in the country are controlled by either by Sonangol or Puma subsidiary Pumangol.

It’s a fundamental change. The Angolan business was once the cornerstone of Trafigura

Angola, which vies with Nigeria to be Africa’s largest oil producer, lacks local refining capacity to meet its own fuel needs.

The country’s fuel imports have increased fivefold in the last decade as demand increased after the end of the civil war. They reached almost 110,000 barrels a day in 2016, according to Citac, a London-based Africa energy consultancy.

Sonangol said all fuel supply contracts were “awarded on a tender basis” and confirmed Vitol as one of its suppliers.

Angolan president José Eduardo dos Santos appointed his daughter Isabel dos Santos as head of Sonangol in June as part of a dynastic shake-up of the country’s chief revenue source. The entire board of Sonangol was fired at the same time.

Manuel Vicente, who ran Sonangol between 1999 and 2012, had long been seen as the most likely successor to President dos Santos, but the elevation of his daughter has made her favourite to succeed her father, who first came to power in 1979.

Named by Forbes as Africa’s richest woman, Mrs dos Santos has faced scrutiny of her wealth, which includes a 25 per cent stake in Angola’s largest mobile telecommunications company Unitel.

After spending the past year working with western consultants on a plan to transform the country’s oil industry, she has vowed to increase transparency and improve governance at Sonangol to boost profits.

“Investment is being re-evaluated or reassigned because of more limited funds,” said Elitsa Georgieva of Citac.

15%

Percentage of Puma controlled by Cochan, the investment vehicle of General Dino

In Angola, Trafigura established its grip on fuel imports through DT Group, a joint venture with an investment group founded and chaired by powerful local businessman Leopoldino Fragoso do Nasciment. More commonly known as General Dino, he was once an adviser to the president and served on the winning side in the civil war, which ended in 2002.

General Dino’s investment vehicle, Cochan, has also put money into Puma alongside Trafigura and Sonangol. Cochan controls 15 per cent of Puma while Sonangol has built a 30 per cent stake in the company. Trafigura owns about 49 per cent.

Trafigura has increased its global oil volumes to more than 4m b/d a day and its direct business with Angola has become a smaller proportion of its trading operations after it expanded in Russia, Asia and the Americas. However, it still has a strong position in the country from years of investment in infrastructure.

In 2015, chief executive Jeremy Weir and the senior management group steered Trafigura to its strongest trading year on record. Profits in the first half of the 2016 financial year were boosted by the reversal of an impairment on a dormant Angolan iron ore mine following a deal with Luanda.



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