Angola’s Cabinda oil refinery is expected to begin production by April, having successfully completed its first phase ahead of schedule, although it has exceeded its budget, according to Atanas Bostandjiev, CEO of Gemcorp Holdings Limited, the project’s primary investor. The refinery is scheduled for commissioning in January-February, with initial fuel supplies projected to reach the local market by March-April. Gemcorp owns a 90% stake in the facility.
As Angola’s second oil refinery, the new facility aims to reduce the country’s reliance on costly fuel imports while addressing ongoing efforts to eliminate fuel subsidies. Bostandjiev revealed that investment for the first phase has risen to approximately $500 million to $550 million, surpassing the original estimate of $473 million due to rising costs stemming from the COVID-19 pandemic and inflation. The initial target for completing this phase was July 2025.
The greenfield project will refine Cabinda crude oil supplied by state-controlled Sonangol at a rate of 30,000 barrels per day (bpd), projected to meet 5-10% of Angola’s fuel requirements. Sonangol holds a 10% stake in the project.
Future plans include a second phase aimed at increasing crude processing capacity to 60,000 bpd, along with the addition of a hydrocracking unit for diesel and jet fuel production, which is expected to come online 18 to 24 months after the refinery starts operations. Bostandjiev highlighted the inefficiency of Angola’s current oil system, which exports 98% of its crude while importing nearly all refined products from Europe. China remains the largest consumer of Angolan crude, accounting for nearly 60% of exports in 2023.
Once operational, the refinery will initially export fuel oil and naphtha that cannot be processed locally while supplying the local market with diesel and jet fuel. Funding for the second phase has yet to be finalized, with a decision anticipated in April or May, once the refinery is operational. Additionally, the refinery may explore opportunities to export some fuel to the Democratic Republic of the Congo in later phases.
Gemcorp, a London-based investment firm, is the sole Western investor in the refinery project, with Bostandjiev noting that many Western institutions face challenges related to environmental, social, and governance (ESG) criteria that hinder investments in oil and gas initiatives.
