SOOGL provides $2.465 billion loan to Sonangol Sinopec International Limited to support its operations (Linked to Record ID#67022, #67025, #67026, #67027, #67024, #194)

📋 Staff Comments

1. Sonangol Sinopec International (SSI) is a joint venture (incorporated in the Cayman Islands) between Sinopec (a Chinese state-owned enterprise) and China Sonangol (a joint venture between the Hong Kong-based China International Fund and Angola's state-owned oil company Sonangol). Sinopec holds a 55% ownership stake in SSI, and China Sonangol holds a 45% ownership stake in SSI.
2. As of November 2009, eight oil fields had been discovered in Block 18. The remaining recoverable reserves of the net economic interest of SSI at the east zone (Greater Plutonio) of Block 18 were as follows: the total proved reserves are 102.49 million barrels (mmbbl), in which the proved developed reserves are 79.04 million barrels and the proved undeveloped reserves 23.45 million barrels; and the probable reserves are 67.24 million barrels.
3. Sonangol Sinopec International Limited (SSI) is a company incorporated in the Cayman Islands.
4. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
5. On July 2, 2004, Sinopec International Exploration and Production Corporation and Sonangol Asia Limited — a subsidiary of Sonangol (Angola’s state-owned oil company) — signed framework cooperation agreement. Under the terms of the agreement, Sonangol was granted the right to (re)purchase a 50% equity stake — held by Shell Development Angola B.V. (SDAN) — in an offshore oil field known as Block 18. Sonangol and Sinopec International Exploration and Production Corporation also agreed to jointly develop Blocks 15, 17, and 18. In December 2004, Shell Development Angola B.V. (SDAN) sold its 50% equity stake in Block 18 to Sonangol, leaving the remaining 50% ownership stake with BP. Then, on January 21, 2005, Sonangol agreed to transfer its 50% equity stake in Block 18 to Sonangol Sinopec International Limited (SSI) — a special purpose vehicle that was legally incorporated in the Cayman Islands on October 15, 2004 and a joint venture of Sinopec Overseas Oil & Gas Limited (SOOGL) and China Sonangol International Holding Limited (China Sonangol) — for an acquisition price of $421.5 million. SSI reportedly secured a loan from Standard Chartered Bank (with a corporate guarantee from Sinopec) to facilitate the $421.5 million acquisition. SOOGL held 55% of the total issued share capital of SSI, and China Sonangol held 45% of the total issued share capital of SSI. China Sonangol was a joint venture of New Bright International Development Limited (70% ownership stake) and Sonangol (30% ownership stake). The 50% equity transfer agreement was approved by Angola’s Ministry of Petroleum and Ministry of Finance on February 18, 2005. Then, on February 25, 2005, both parties formally signed the 50% equity transfer agreement (during a visit to Angola by the Vice Premier of China’s State Council). Shortly thereafter, in April 2006, SSI obtained partial equity stakes in additional offshore oil fields known as Blocks 15 (06), 17 (06), and 18 (06). On May 12, 2006, China Development Bank and SSI signed a $1.4 billion syndicated facility agreement for the Block 18 Oilfield Development Project. Members of the loan syndicated included ING Bank N.V., BNP Paribas S.A., Societe Generale, Standard Chartered Bank, KBC Finance Ireland (KBC), Crédit Agricole Corporate and Investment Bank (SG CIB), NATEXIS Banques Populaires (Natixis), London Branch of Bayerische Landesbank (BayernLB), China Development Bank (CDB), Export-Import Bank of China, China Construction Bank, Bank of China Limited, and the Agricultural Bank of China. The loan carried a 7-year maturity (with a final maturity date of June 2013) and a 2-year grace period. During the construction phase, the loan carried an interest rate of LIBOR plus 40 basis points, and in the following three years, the loan carried an interest rate of LIBOR plus 140 basis points. The loan was collateralized and backed by a corporate guarantee from China Petrochemical Corporation (Sinopec). The project sponsors (SOOGL and China Sonangol) pledged their shares in the borrowing institution (SSI) as sources of collateral. The loan’s security documents (collateral package) included the Shareholders' Undertaking Agreement; each SSI Share Charge; the Deed of Assignment of Insurance Proceeds; the Deed of Assignment of Rights under the Offtake Agreement; the Deed of Charge on Accounts; and the Deed of Assignment of Rights under the Hedge Agreement. The borrower was expected to use the proceeds of the loan to finance the development Block 18, one of the largest oilfields in Angola. China Development Bank contributed $205 million to the facility agreement (as captured via Record ID#67022). China Construction Bank contributed $144 million (as captured via Record ID#67027). Agricultural Bank of China contributed $76 million (as captured via Record ID#67026). Bank of China contributed $75 million (as captured via Record ID#67025). China Eximbank contributed $200 million (as captured via Record ID#67024).

📚 Sources & References

• Chinese Economic Statecraft: A Comparative Study of China’s Oil-backed Loans in Angola and Brazil
• CONNECTED TRANSACTIONS DISCLOSEABLE TRANSACTION
• Hong Kong Companies Registry Annual Return Form AR1 China Sonangol International Holding Limited
• Hong Kong Companies Registry Form M1 China Sonangol International Holding Limited
• Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of The Securities Exchange Act of 1934 For the month of March, 2010 CHINA PETROLEUM & CHEMICAL CORPORATION
• Sinopec to Purchase Angolan Oil Assets for US$2.46 Billion
• United States SEC Form 20-F 2012 Annual Report China Petroleum & Chemical Corporation
• 起家安哥拉 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.