Luanda — Angolan national fuel company (Sonangol) has decided to terminate the contract with the United Shine consortium, provided for the implementation of Cabinda Refinery, due to the non-compliance with the agreed actions.
According to the statement reached Angop on Wednesday, the United Shine consortium signed a generic agreement in February 2019 and a contract on 4 June of the same year.
The contract provides for the implementation of the project, after a long process of selection of an investor with the technical and financial capacity to meet the legal and compliance requirements selected in November 2018. This partnership would allow the project to be implemented as quickly as possible in order to reduce government expenditure on fuel imports.
However, in October this year, Sonangol was forced to terminate the contract, following non-compliance with the agreed actions and non-guarantee, in effective, unconditional and concrete manner of financing or guarantees to ensure the implementation of the Refinery in Cabinda.
Sonangol also noted a shortcoming in corporate capitalisation in terms of financial robustness at the equity level to ensure the completion of the project.
According to the communique, the consortium has not demonstrated the ability to prepare or carry out essential activities within the agreed period (24 months). The failure to submit additional technical, commercial and financial studies to support the project's completion within the deadline, failure to submit documentation for approval of the private investment project under Angolan law were among the other shortcomings detected. The consortium also did not have titles or documents that would confirm the ownership of the refinery for foreign travel to Angola and subsequent assembly in Cabinda in fixed deadline, 2022, as agreed, and did not maintain the technical partnership that preferred the choice of its proposal. In view of the above, Sonangol decided to negotiate on the termination of this contract thus paving the way for contacts with other potential investors with which it signed new agreement and signed a Memorandum of Understanding, for the financing and implementation of the project on 30 October 2019. GEMCORP CAPITAL LLP,
Sonangol, mandated by the Angolan executive, coordinates the strategy for the execution of the project of which it has a participative interest of 10% of the capital of society.