Agricultural Bank of China contributes $76 million to $1.4 billion syndicated overseas investment loan for Block 18 Oilfield Development Project (Linked to Project ID#67022, #67024, #67025, #67027, #194)

On May 12, 2006, China Development Bank extended Sonangol Sinopec International (SSI) a $205 million overseas investment loan in order to finance the acquisition and development Block 18, one of the largest oilfields in Angola. This loan was part of a larger $1.4 billion syndicated loan facility for the Block 18 Oilfield Development Project with the ING Group, BNP Paribas, Societe Generale, Standard Chartered Bank, KBC Bank, Credit Agricole Group, Natixis, BayernLB, CDB, Export-Import Bank of China, China Construction Bank, Bank of China, and the Agricultural Bank of China. 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) (see Project ID#194). Sinopec holds a 55% ownership stake in SSI, and China Sonangol holds a 45% ownership stake in SSI. China Development Bank contributed $205 million (as captured via Project ID#67022). China Construction Bank contributed $144 million (as captured in Project ID#67027). Agricultural Bank of China contributed $76 million (as captured in Project ID#67026). Bank of China contributed $75 million (as captured in Project ID#67025). China Eximbank contributed $200 million (as captured in Project ID#67024) Of the remaining $700 million, BNP Paribas and facility agent ING were both expected lend $115 million, while security agent Natexis was expected provide $91 million. BayernLB, Calyon, KBC, and Standard Chartered were each expected lend $76 million, and SG CIB agreed to provide $75 million. All Chinese overseas investment loans carried a 7 year maturity (with the final maturity date of the loan being 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. SSI purchased a 50% ownership stake in Block 18 from Shell, and BP also holds a 50% ownership stake. Block 18 is in deep waters and is located between the Kwanza and Congo basins, where the water depth varies between 750-1,750 meters. The block contains the Greater Plutonio development, which is the first BP-operated asset in Angola, consisting of five distinct fields discovered between 1999 and 2001, in water depths of up to 1,450 meters. Upon the start of oil production, Block 18 was expected to produce around 200,000 barrels a day, with much of it intended for export to China. This project reportedly cemented Angola’s place as the largest supplier of oil to China.

Additional details

1. This loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. 2. AidData has coded this transaction as a collateralized loan because Natexis was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan.

Number of official sources

6

Number of total sources

13