sonangol fin stmt 2010_jul11_eng
TRANSCRIPT
52 Sociedade Nacional de Combustveis de Angola (Sonangol) - EP(National Fuel Company of Angola - a Public Corporation)
2010
REPORT AND ACCOUNTS
Finance Department
Sonangol - EP
Notes to the Accounts for the Financial Year Ended December31,2010Amounts expressed in kwanza (AKZ)
REPORT AND ACCOUNTS
This report contains:
Balance Sheet
Earnings Statement
Notes to the Accounts
BALANCE SHEET AT DECEMBER31,2010(Amounts expressed in kwanza)Financial Year
Note20102009
ASSETS
Noncurrent assets
Tangible fixed assets4
Intangible fixed assets5
Investments in mining4A
Investments in subsidiaries and associates6
Other financial assets7
Other noncurrent assets9
TOTAL NONCURRENT ASSETS
Current assets
Inventories8
Accounts receivable9
Cash and other liquid assets10
Total current assets
TOTAL ASSETS
SHAREHOLDER EQUITY AND LIABILITIES
Shareholder equity
Capital12
Reserves and funds12
Earnings
TOTAL SHAREHOLDER EQUITY
Noncurrent liabilities
Medium and long-term loans16
Provisions for risks and charges18
Other noncurrent liabilities19
Total noncurrent liabilities
Current liabilities
Accounts payable19
Other current liabilities21
Total current liabilities
TOTAL CAPITAL AND LIABILITIES
/s/Jacinto Manuel VelosoChief, Accounting Department/s/Raquel Rute da Costa David VungeDirector of Finance
/s/Mbiavanga Filipe, Director of Internal Control and AuditRegistration No. 3227
EARNINGS STATEMENT AT DECEMBER31,2010(By type)(Amounts expressed in kwanza)Financial Year
Note20102009
Sales22
Other operating income24
Change in finished products and products in process25.1
Delivery of sales - concessionaire25.2
Cost of merchandise sold and raw materials consumed27
Payroll costs28
Amortizations29
Other operating costs and losses30
Operating balance
Financial balance31
Subsidiaries and associates balance32
Nonoperating balance33
Earnings before taxes
Tax on profits35
Net earnings from current activities
Noncurrent earnings34
Tax on profits
Net profit for the financial year
/s/Jacinto Manuel VelosoChief, Accounting Department/s/Raquel Rute da Costa David VungeDirector of Finance
/s/Mbiavanga Filipe, Director of Internal Control and AuditRegistration No. 3227
INTRODUCTION1A. Areas of businessThe Sociedade Nacional de Combustveis de Angola, E.P. (hereinafter called Sonangol - EP, or the company), is a wholly publicly owned corporation, created under Angolan law in 1976 by Decree 52/76 of June 9, 1976. According to its current articles of association approved by Presidential Decree 42/10 of May 4, 2010, the main activities of Sonangol - EP are prospecting, research, development, upstream production, transport, marketing, refining, and processing of liquid and gaseous hydrocarbons and their derivatives, including downstream petrochemical operations.Law 10/04 (the Law on Petroleum Activities) identifies Sonangol - EP as the Angolan enterprise to which the state has granted mining rights for prospecting, research, development, and production with respect to liquid and gaseous hydrocarbons. As concessionaire, Sonangol - EP is authorized to enter into partnerships with foreign and domestic entities for the conduct of oil operations within the national territory. These operations are currently based on partnership agreements and production sharing agreements.To fulfill more effectively and professionally its role as the national hydrocarbons concessionaire, the company created subsidiary companies Sonangol Pesquisa e Produo (Sonangol Research and Production) and Sonangol Gs Natural (Sonangol Natural Gas). These two subsidiaries have been used by Sonangol - EP, over time and in partnerships, as vehicles for investment in the exploration and development of crude oil and natural gas.Nonetheless, Sonangol - EP still partly engages in the crude oil business, through investments in Block0 - the Cabinda Concession.The table below summarizes the areas of business in which the company is involved through its subsidiaries and projects, thus gradually fulfilling its corporate purpose:SUBSIDIARY/PROJECTBUSINESS
Sonangol Pesquisa e ProduoProspecting, research (on natural gas), development, and production of crude oil
Sonags Sonangol Gs NaturalDevelopment and production of natural gas
Sonangol ShippingTransport of crude and refined oil
Sonarel Sonangol Refinaria de LuandaRefining of crude oil in Luanda
Sonaref Sonangol Refinaria (Project)Refining of crude oil in Lobito (under construction)
Sonangol LogsticaSupply and storage of refined oil products
Sonangol Distribuidora Marketing and distribution of refined oil products
Sonangol Limited (UK)Marketing of crude oil and LPG
Sonangol USA CompanyMarketing of crude oil
Sonangol Asia LimitedMarketing of crude oil
Sonangol Finance Limited Contracting of medium- and long-term credit
SonairAir transport services to support oil operationsReal estate and property management
MSTTelecommunications services
ESSAProfessional training services
Sonangol Holdings, LdaFinancial equity holding
PUAA Administrao e Gesto, S.A.Real estate and property management
Solo Properties (Knightsbridge) LtdReal estate and property management
SONIP Sonangol Imobiliria e PropriedadesReal estate promotion and property management
Sonangol Investimentos IndustriaisCoordination of the management, promotion, and development of industrial projects
CG Clnica GirassolHospital business
Sonangol HidrocarbonetosHydrocarbon research and mining
In 2010, Sonangol - EP expanded its business, with the establishment of two new subsidiaries, Sonangol Investimentos Industriais and Sonangol Hidrocarbonetos, the former being devoted mainly to coordinating the management, promotion, and development of industrial projects for Sonangol - EP and its subsidiaries in the Special Luanda Bengo Economic Zone, and the latter being involved primarily in hydrocarbons research and mining.2. Accounting policies adopted in the preparation of the financial statements2.1 Bases of presentation the accounts consolidation criterionThe Sonangol Board of Directors has chosen Sonangol - EP as the consolidating entity of the Group. Accordingly, since2008 the implementation of the Accounting Policies Manual (Manual de Polticas ContabilsticasMPC) has been under way. The objective is to lay the foundation for the first consolidation of the companys accounts; but, for the time being, consolidated financial statements were not prepared, presented, and audited for 2010.2.2 Bases of presentation preparation of the financial statementsThe financial statements were prepared on the basis of accounting records maintained as prescribed in the current Angolan legislation, defined in the general chart of accounts (Plano Geral de Contabilidade PGCDecree82/01 of November16,2001), and in accordance with generally accepted accounting principles and standards.The accounts classification established in the PGC has been amended, with the introduction of a number of specific items relating to the companys business (oil and gas industry). Accordingly, Sonangol - EP and its subsidiaries have devised a single chart of accounts for the Group so as to recognize those specific items, taking into account the MPC, which was designed for that purpose. The numbering of the notes below reflects that shown in the PGC. Notes not included in this annex are not applicable or insignificant for understanding the financial statements.2.3 Exchange rate fluctuationsTransactions are recorded on a historical cost basis and adjusted at year-end for the effects of exchange-rate fluctuations occurring during the year between the kwanza (AKZ) and the foreign currency in question.In 2010, current assets and liabilities denominated in foreign currency were revalued at the exchange rate prevailing on December31,2010, as published by the National Bank of Angola, and under the terms stated in Ministry of Finance Resolution104/91 of October18 and reiterated in Instruction01/DF-DC/2010. The exchange rates used were as follows:12/31/0912/31/10
USD 1 =AKZ 89,621AKZ92,874
EURO 1 =AKZ128,526 AKZ123,021
2.4 Key accounting criteriaThe key accounting criteria used to prepare the financial statements were as follows:1. Investments in mining in Block0Investments in mining include the share of Sonangol - EP in the expenditure relating to research, development, operations, and other expenses incurred by the operator of Block0. These investments are recorded at historical cost.Development expenses and those of management and capitalized services are amortized using the straight-line method, at rates depending on the amortization period specified in each concession contract. The contractual amortization period is six years.1. Tangible fixed assetsTangible fixed assets are shown at purchase cost, with adjustments for legally required revaluations minus cumulative amortization. Revaluations are based on the corresponding coefficients published each year by the Ministry of Finance.Amortizations are done using the straight-line method, at rates calculated to ensure that the value of properties is fully absorbed during their useful life, as estimated for each fixed assets item, as follows:Fixed Assets ItemUseful Life (Years)
Buildings and other construction20-50
Basic equipment10
Transport equipment5
Administrative equipment8-10
Consignable packaging5
Other tangible fixed assets5-10
Expenses incurred for the repair and current maintenance of fixed assets are considered costs in the year in which they occur. Large-scale repairs that lengthen the useful life of fixed assets are capitalized and amortized over the remaining portion of their useful life.1. Intangible fixed assetsIntangible fixed assets are shown at purchase cost, minus cumulative amortization.Amortizations are done using the straight-line method, at rates calculated to ensure that the value of the fixed assets is fully absorbed during their useful life, estimated for each fixed assets item, as follows:Fixed Assets ItemUseful Life (Years)
Development expenses3
Industrial property and other rights and contracts10
Start-up expenses5
Other intangible fixed assets5-10
1. Mining investments and works in progressTangible fixed assets relating to oil exploration and production are recorded at purchase cost and basically correspond to the following: Expenses incurred in respect of exploration area (field) research and development, plus the structure and financial costs incurred up to the date of the start of production, which are capitalized in works in progress. When the field begins its production these expenses are transferred from works in progress to fixed assets and are amortized; Research expenses, when incurred, involve the whole geographic area of the field, irrespective of where the reserves are located; Research expenses relating to a field under exploration and development are classified in works in progress; and All expenses incurred during a phase of oilfield research that proves unsuccessful are recognized as costs in the earnings statement for the financial year in which the research and/or development work is halted. Also considered as current financial year expenses are all exploration costs, such as seismic interpretation and acquisition as well as geological and geophysical costs in general.1. Investments in subsidiaries and associatesShareholdings in subsidiary and associate companies are recorded at purchase cost.Financial investments classified as other financial assets represent investments in asset markets (venture capital investment funds) and are valued at the market value prevailing on the balance sheet date.1. InventoriesCrude oil inventories are valued at the cost price equivalent to the average annual production cost. Valuation is based on the quantities declared in the operators inventory. The cost of stocks sold is calculated on the basis of the specific production cost of each concession.1. Accounts receivable and other noncurrent assetsThe balances of accounts receivable from customers, other debtors, and subsidiary and associate companies are recorded at their net payment value.Noncurrent assets consist of medium- and long-term financial transfers to subsidiaries. These are permanent interest-bearing loans with a repayment period longer than 12 months, the balance of which is shown at net market value.1. Cash and other liquid assetsCash and other liquid assets include: (i) cash; (ii) bank sight and time deposits; and (iii) other short-term investments maturing in up to three months that can be immediately callable without significant risk of fluctuations in value.1. ProvisionsProvisions are established whenever: (i) there is a legal or constructive obligation resulting from past events; (ii) it is likely that an outlay of funds will be needed to settle a liability; and (iii) a reliable estimate can be made of the amount of the liability.Provisions are not made for future operating losses. Provisions are reviewed on the balance sheet date and are adjusted to reflect the best estimate at that date.1. Other current liabilitiesSupplier balances and other current liabilities are recorded at their nominal value.1. Sales and provision of servicesSales are recorded net of taxes, discounts, and other intrinsic costs, at the market value of the amount received or receivable.1. InterestInterest received is recorded on the basis of the financial year specificity principle, taking account of the amount owed and the actual rate in force during the period until maturity.1. Taxes, duties, and fees Block0The company is liable for mining taxes, duties, and fees under Law 13/04 of December 24 (the Law on the Taxation of Petroleum Activities). Under this legislation, taxable earnings are defined as presumed monthly profit and calculated provisionally for each Block under production, reported to the tax authorities in provisional tax returns, and paid by legally established deadlines.Provisional tax returns are replaced at the end of the financial year by final tax returns, adjusted to reflect the tax reference prices, the final costs incurred by the company in oil operations, and its structural costs.Final tax returns are subject to review and adjustment by the National Tax Directorate (DNI), Ministry of Finance, which is the revenue authority. Taxes for 2009 are currently being reviewed and definitively established.The taxes, duties, and fees referred to above include the following:Oil production tax levied on the amounts of crude oil and natural gas produced in the year, valued at the tax reference prices, at the rate of 20percent for the Cabinda concession (Block0);Oil transaction fee levied on the annual profit recognized under partnership agreements at the rate of 70percent and deductible for the purposes of calculating the oil income tax assessment basis; andOil income tax levied on annual profit (net of the oil production tax and the oil transaction fee) recognized under partnership agreements (Cabinda concessions) and at the rate of65.75percent.Only current tax is recognized, there being no calculation or recording of any deferred taxes, whether positive or negative, resulting from temporary differences between the accounting base and the tax base.1. Income of the national concessionaireUnder current legislation, Sonangol - EP is required to transfer to the state an amount equivalent to a minimum of90percent of its earnings from sales made as national concessionaire. This amount is considered a tax and, as such, is included in the costs for the financial year.3. Changes in accounting policiesNo changes in accounting policies were made or reported. Nonetheless, the Accounting Policies Manual is currently being implemented in the Sonangol Group, the objective being to provide information on the account consolidation process. The achievement of this objective will make it even more possible, through the harmonization and documentation of accounting principles from the standpoint of the Group, to take account of the specific nature of the business activities of the various companies comprising the Group. To date, policies have been implemented concerning the Groups chart of accounts, additions and deferments, and financial statements. Procedures for closing accounts and settling intra-Group transactions have also been put into place.
NOTES TO THE BALANCE SHEET4. Tangible fixed assets4.1 Composition of tangible fixed assets, by item
ItemGross AmountCumulative AmortizationNet Amount
Tangible fixed assets
Land and natural resources
Buildings and other construction
Basic equipment
Transport equipment
Administrative equipment
Other tangible fixed assets
Works in progress
Total
4.3 Movements during the financial year, in gross amounts
ItemInitial BalanceRevaluationIncreaseSalesWrite-off/TransferFinal Balance
Tangible fixed assets
Land and natural resources
Buildings and other construction
Basic equipment
Transport equipment
Administrative equipment
Other tangible fixed assets
Works in progress
Total
4.4 Movements during the financial year, in cumulative amortization
ItemInitial BalanceRevaluationIncreaseSalesWrite-off/TransferFinal Balance
Tangible fixed assets
Land and natural resources
Buildings and other construction
Basic equipment
Transport equipment
Administrative equipment
Other tangible fixed assets
Works in progress
Total
4A Investments in mining4A.1 Composition, by itemItemGross AmountCumulative AmortizationNet Amount
Research expenditure
Development expenditure
Inventory material
Supply material
Material in transit
Means of transport
Other investments
Works in progress
Total
4A.2 Movements during the year, in gross amounts
ItemInitial BalanceIncreaseDecreaseFinal Balance
Research expenditure
Development expenditure
Inventory material
Supply material
Material in transit
Means of transport
Other investments
Works in progress
Total
4A.3 Movements during the year, in cumulative amortization
ItemInitial BalanceIncreaseDecreaseFinal Balance
Research expenditure
Development expenditure
Inventory material
Supply material
Material in transit
Means of transport
Other investments
Works in progress
Total
4B Works in progress4B.1 Composition, by item
ItemInitial BalanceIncreaseDecreaseFinal Balance
Nonmining
- Buildings and other construction
- Refinery project- SINCO project- Cabinda biodiversity project- Prospection and research project
- Miscellaneous projects
Mining
- Block0
Total
In the case of works in progress, the following changes were made during the period:i.Transfer of the amount allocated for the Sonaref project, against payment, to Sonangol Refinaria do Lobito, in the context of its establishment as a subsidiary in the Group;ii.Closure of the items relating to the SINCO project and the prospection and research project, the amounts in question having been recognized as charges to the company; andiii.Closure of the Cabinda biodiversity project item, the amount in question having been assigned to expenditure for the period.
5. Intangible fixed assets5.1 Composition, by itemItemGross AmountCumulative AmortizationNet Amount
Intangible assets
- Intangible fixed assets
Grand total
5.2 Movements during the financial year, in gross amountsItemInitial BalanceRevaluationIncreaseSalesWrite-off/TransferFinal Balance
Intangible assets
- Intangible fixed assets
Grand total
5.3 Movements during the financial year, in cumulative amortizationItemInitial BalanceRevaluationIncreaseSalesWrite-off/transferFinal Balance
Intangible assets
- Intangible fixed assets
Grand total
6. Investments in subsidiaries and associates6.1 Composition, by itemItemGross AmountCumulative ProvisionsNet Amount
Subsidiaries
Shareholdings
Associates
Shareholdings
Loans
Total
6.2 Movements in the initial balance and in transactions during the yearGross Amount
ItemInitial BalanceIncreaseDecreaseFinal Balance
Subsidiaries
Shareholdings
Loans
Associates
Shareholdings
Loans
Total
6.3 Details on subsidiaries and associatesCompanySubsidiary Accounts
Shareholder EquityPercent of Equity HoldingAmount HeldGross Amount Recorded
Subsidiaries
Sonangol P&P
Sonangol Gs Natural
Sonangol Refinaria de Luanda
Sonaref
Sonangol Shipping
Sonangol Logstica
Sonangol Distribuidora
Sonangol Finance Ltd
Sonangol Holdings Lda
Sonair
MST Telecomunicaes
Sonangol Limited
Sonangol USA Company
Sonangol Asia
Puaa
Essa
SONIP
SOLO Properties
Clnica Girassol
Sonangol Hidrocarbonetos Ltd
Sonangol Investimentos Industrias
Total Subsidiaries
Associates
Banco Millennium BCP
Banco Caixa Geral Totta Angola
Banco Millennium Angola
Petroci
Banco Privado Atlntico
Banco Privado Atlntico Europa
Angolan Securities and Derivatives Exchange
Total - Associates
Grand total
Thepercentage of equity held by the company in each of the subsidiaries is as stated in Decision06/GPCA/06 of April 20, 2006. For Sonangol Holdings Lda, it is as stated in Decision02/2007 of March 5, 2007. In the cases of the subsidiaries Sonair, Servio Areo SARL, and Sonangol Gs Natural, it is as stated in Decisions023/2008 and02/2009 of December 22,2008 and April 6,2009 respectively. In March2009, Sonangol - EP and Caixa Geral de Depsitos signed a strategic partnership agreement for the establishment of the Banco de Produo e Desenvolvimento (BPD). The BPD will have $500million in statutory capital, with Sonangol - EP directly holding50percent of its shares, which represents an investment of $250million.As at December31,2010, Sonangol - EP held 685,138,638 shares in Millennium BCP, corresponding to a14.59percent shareholding and valued at market price (fair value). In accordance with the valuation criteria specified in the PGC, whenever the purchase cost exceeds the sale value the corresponding provisions must be constituted. In this regard, and based on the market listings obtained as at December31,2010, the company recognized an impairment loss on this investment, as shown below:
Value DateNo. of SharesAmount in EuroAmount in Kwanza
12/31/0712/31/0812/31/0912/31/10
Fair market value at 12/31/10
These securities are held at Banco de Investimento Global (BIG) under the terms of the custody contract signed with Sonangol - EP.
7. Other financial assets7.1 Details of other investmentsGross Amount
ItemInitial BalanceIncrease/ DecreaseFinal Balance
Investments
Energy Fund II
Energy Fund III
Total
7.1.1Composition
ItemGross Amount
12/31/1012/31/09
Energy Fund II- CDM Resource- Cobalt International Energy, LP- Legend Natural Gas II, LP- Niska Gas Storage- Petroplus International- Stallion Oilfield Services, Lda
Subtotal
Energy Fund III- Cobalt International Energy, LP- Dresser Inc.- Foresight Reserves, LP- Frontier- Hong Hua LDT- Jade Partners LLC- Kinder Morgan Inc.- Legend Natural Gas III, LP- Moreno Energy Inc.- Niska Gas Storage, LLC- Permian Tank & Manufacturing, Inc.- Phoenix Exploration Company LP- Red Technology Alliance LLC- Targe Energy LLC- Titan Specialties- Vantage Energy LLC
Subtotal
GRAND TOTAL
7.2 Commitments
DescriptionCommitment Amount (USD)Percentage of ShareholdingExecutions (USD)
Carlyle-Energy Fund II
Carlyle-Energy Fund II
The amounts recorded for venture capital investments Energy Fund II and Energy Fund III represent their fair market value, as shown in the final reports as at December31,2010.
8. Inventories
8.1 Inventory movements during the financial year
ItemInitial BalanceIncreaseDecreaseFinal Balance
Raw materials
Crude oil or natural gas
Block 0
Total
8.2 Composition of inventories, by Block
ItemQuantityAverage Unit Cost (AKZ)Total
Block0
Areas A and B
Total
9. Other noncurrent assets and accounts receivable
9.1 Composition
ItemCurrentNoncurrentFinal Balance
Maturing in up to 5 yearsMaturing in over 5 years
CustomersDomesticForeignAdvances to suppliersSubsidiaries and associatesIntra-Group transactionsOther debtors
Total accounts receivable
9.1.1 Composition, by type of other noncurrent assets
CompanyInitial BalanceIncrease/DecreaseFinal Balance
Subsidiaries
Sonangol P&PSonagsSonangol Shipping Holding (SSHL)Sonangol LogsticaSonangol Holdings LdaSonairEssaSONIP
Total - Subsidiaries
Associates
FCKSChina Sonangol InternationalGrupo GeniusSonilsForce PetroleumKwanda LimitadaACREPAspenway
Total - Associates
Grand total
The transfers made by Sonangol - EP to each of its subsidiaries as well as its loans to associates are each the subject of a contract. Any reimbursement not made is automatically transformed into a further transfer.
Such transfers represent investments made by the company in its subsidiaries and not only those for which the repayment period is deferred.
Also included here are loans granted to nonassociate companies, primarily Force Petroleum (Angola) and ACREP, to finance their oil operation liabilities, and to the Kwanza Sul cement factory (FCKS), all of these within the framework of the Business Development Law.
9.1.2 Composition of accounts receivable, by type
Item12/31/1012/31/09
Customers
Domestic
Foreign
Miscellaneous debtors
Increases and deferments
Intra-Group transactions
Stock of the concessionaire
Others
Total accounts receivable
9.1.2.1 Composition of customer balances
Item12/31/1012/31/09
Customers
Domestic- Sonangol Refinaria de Luanda
Subtotal
Foreign- Trafigura Beher Amsterdam- Sonangol Congo Kinshasa- DTS Refining Pte Ltd- Enco So Tom- Braskem Incorp.- PTT Public Company Ltd- Formosa Petrochem Co.- STASCO Shell International Trading- Shell Trading Comp. Ltda- Conoco Trading- CNOOC Trading- China Sonangol International Hld Ltd- China National Unit Oil- TOTSA Total Oil Trading- Reliance Industries- Indian Oil Corporation- DT Refining- Kangoi Oil Trading Ltd- Unipec China Intern. Chemic. Beijing- Valero Marketing & Supply- Vitol S.A.- Others
Subtotal
Total Customers
The balance maintained with Sonangol Refinaria de Luanda is largely the result of crude oil sales made during the fourth quarter but not yet paid for. These sales have generally been settled only after publication of the tax reference price by the Oil Ministry.
The balance in respect of foreign crude oil customers will be fully settled in January2011. This represents a post-closure event but is in keeping with the terms and conditions for crude oil sales.
9.1.2.2 Composition, by type of debtor
Item12/31/1012/31/09
Other miscellaneous debtors
Increases and deferments
Sonangol Shipping (Angola), LuandaSonangol Gs Natural
Sonangol Distribuidora
Sonangol Logstica
Sonangol Holdings
Sonangol Refinaria de Luanda
Essa
Clnica Girassol
Sonangol Finance LtdSonangol Shipping Holding LimitedSIINDTuala Kumoxi
Amounts receivable Barclays Wealth
Amounts receivable Esperaza BVSupplies Elf
Advances to suppliers
Concessionaire inventory
Amounts receivable BCGTA partners)Amounts receivable Total EP (Abandonment Fund Block 3/8)Material stimulus social fund
Workers social fund Subscription
Others
Subtotal
Total - Other miscellaneous debtors
The Increases and deferments item reflects the amount for Sonags accounts receivable, related to the collection of Sanha operating costs, which will take place in early2011.
Transactions with the subsidiaries relate basically to services provided to Sonangol - EP and to amounts charged by the latter and remaining unpaid, related to the reimbursement of principal and interest on transfers it has granted.
As regards the intra-Group transactions, the Sonangal Finance balance consists mainly of amounts resulting from the differences found between the remainder to be transferred after debt servicing in the context of financing contracted by Sonangol - EP and the amount actually transferred by the subsidiary in question. It also includes dividends for2009,recognized and paid to the subsidiary at the end of the period.
9.1.3.1. Stock of oil rights as concessionaire (value)
ItemInitial BalanceIncrease (Production)Decrease (Exports)Final Balance
Concessionaire
Block 2/85
Block 2/05
Block 3/85
Block 3/91
Block 3/05
Block 4 Gimboa
Block 14 (Kuito)
Block 14 (BBLT-Nemba)
Block 14 (BBLT-Kuito)
Block 14 (TL)Block 14 (Belize Norte)
Block 15 (Hungo)
Block 15 (Kisanje)
Block 15 (Xikomba)
Block 15 (Mondo)
Block 15 (Saxi-Baluque)
Block 17 (Girassol)
Block 17 (Dlia)
Bock 18 (Plutnio)
Total
9.1.3.2. Concessionaires stock of oil rights (in barrels)
BlockInitial StockConcessio-naires Profit OilConcessio-naires ExportsAdjustmentsFinal Stock
Block 2/85
Block 2/05
Block 3/85
Block 3/91
Block 3/05
Block 3 Gimboa
Block 14 (Kuito)
Block 14 (BBLT-Nemba)
Block 14 (BBLT-Kuito)
Block 14 (TL)Block 14 (Belize Norte)
Block 15 (Kisanje)
Block 15 (Xikomba)
Block 15 (Mondo)
Block 15 (Saxi-Batuque)
Block 17 (Girassol)
Block 17 (Dlia)
Bock 18 (Plutnio
Total
Concessionaires stock fell sharply because of the volume of exports in2010, as recorded in the fourth quarter.
10. Cash and other liquid assets
10.1 Composition, by type
ItemMovement in Cash and Other Liquid Assets
20102009
Cash
Transfers of funds
Balances held at banks
Sight deposits
Time deposits
Bonds
Total
10.2 Details of bonds
ProductAmount (USD)Amount (AKZ)DateMaturity Date
BAI deposit bonds
Treasury bonds*
Total
* Represents 20,000 bonds, each valued at US$5,000.
The negotiable securities portfolio consists of: (i)35,000subordinated deposit bonds issued by the BAI, each with a nominal value of US$1,000, after the redemption of10,000bonds this year. These mature in six years and bear interest paid semiannually at the six-month LIBOR plus a margin. Returns on this investment totaled US$748,240; and (ii)20,000treasury notes maturing in five years, generating income on the order of US$3,823,505.
12. Shareholder Equity
12.1 Composition and movements during the year
ItemInitial BalanceIncreaseDecreaseFinal Balance
Statutory capital
Supplementary contribution
Legal reserve
Investment fund
Current balance for the financial year
Total
Given the need to adjust the companys capital structure and build its borrowing capacity in light of future challenges, the proposal was presented, in Decision8/2010, to increase the statutory capital of Sonangol - EP to AKZ1,000,000,000,000 (one trillion Kwanza). Such an adjustment, through the incorporation of asset inflows and reserves, was approved by the shareholders in letter2344/66/01/GMF/2010of October14,2010.
Out of the total for adjustment, as at December31,2010 action had been taken in respect of AKZ900,000,000,000, leaving AKZ100,000,000,000 to be incorporated into financial year2011, based on the distribution of 2010 earnings.
By Presidential Decree42/10 of May10,2010 (setting forth the Policy on the Distribution of Earnings), the companys profits, after the deduction of withheld taxes, are to be distributed as follows:
(a)10percent for constitution of the legal reserve, whose cumulative value should not exceed 2percent of the statutory capital;
(b)At least 10percent for constitution of the fund to assess potential exploration for hydrocarbon resources;
(c)At least 5percent to the fund for other investments;
(d)Up to 5percent to the social fund;
(e)Allocation of individual incentives to workers and to members of the management body by way of their share in the profits, within the limitations set in the pertinent legislation; and
(f)Any other voluntary funds approved by the board of directors and agreed by the competent state bodies.
18. Provisions for risks and charges
ItemInitial BalanceIncreaseDecreaseFinal Balance
Workplace accidents
Pension provisions
Abandonment provisions
- Block 2
- Block 3
Total
The amount shown above in Provisions for risks and charges includes Abandonment provisions. These consist of liabilities declared by the oil operators of various Blocks, for which funds (collected in the form of cost oil) are periodically transferred to the companys accounts. The funds in question are intended to cover future expenses related to the closure of oil wells and the removal of platforms and other installations when reserves run out.
The company currently records and recognizes abandonment provisions only in respect of Blocks 3/05 Canuku, Block2/85, and the now extinct Block3/80. The company is aware that substantial amounts are held in operators accounts for Blocks3/85, Block3/91, Block15 Xicomba, and Block 14 Kuito. As these amounts are not controlled by the company, it is also impossible to recognize them in the accounts.
As concessionaire, Sonangol - EP has used the provisions, making the funds available to Sonangol Pesquisa e Produo, as the pertinent operator, to meet the costs of dismantling the FPSO and of the environmental impact and inspection of the project for abandonment.
19. Other noncurrent liabilities and accounts payable
19.1 Other noncurrent liabilities
ItemMovementMaturity (months)
20102009
Sonangol Finance
- SNL Finance US$1 bn (SCB)
- SNL Finance US$3 bn (SCB)
- SNL Finance US$2.5 bn (SCB)- SNL Finance US$1.5 bn (CA-CIB)- SNL Finance US$1 bn (CDB & SCB)- SNL Finance US$2.5 bn (ICBC)
Subtotal
Subscription to be made
- Sonangol Gs Natural- PUAA
Subtotal
Total
This item records loans contracted by the company through its subsidiary Sonangol Finance Limited. Although recorded in Other noncurrent liabilities, the following notes are presented in accordance with the principles set out in the general chart of accounts.
19.2 Short and long-term loans obtained
19.2.1 Composition of loans
ItemAcqui-sition YearGross AmountMaturity (Months)
Initial BalanceIncreaseRepay-mentCurrent AmountNoncurrent Amount
Liabilities- SNL Finance US$1 bn (SCB)- SNL Finance US$3 bn (SCB)- SNL Finance US$2.5 bn (SCB)- SNL Finance US$1.5 bn (CA-CIB)- SNL Finance US$1 bn (CDB & SCB)- SNL Finance US$2.5 bn (ICBC)
Total
As a further increase was needed for Sonangol - EP to finance its capital structuring projects and other operating expenses under its annual budget for the financial year, in2010the company engaged in two new financing operations, as can be seen in the Increase column in Table19.2.1. The loans contracted were in the sums of $1,000,000,000 and $2,500,000,000, from consortiums led respectively by China Development Bank (CDB) in April and by Industrial and Commercial Bank of China (ICBC) in November.The financing mentioned above is guaranteed by the Gross Oil Income Contract between Sonangol - EP and Sonangol Finance Limited, under which the former is required to collateralize monthly income corresponding to 125percent of the monthly debt service, and a corporate guarantee in which financial accords require Sonangol - EP to observe the following:(a)The net position amount may not, in any circumstances, be less than AKZ750,000,000,000;
(b)The EBITDA/net debt ratio may not be less than 0.5; and
(c)The EBITDA/debt service ratio may not be less than 1.3.
In 2010 and as required by the reporting requirements that form an integral part of credit agreements, the company comprehensively observed the terms of the financial accords, as it is in compliance with all of them.
19.3 Composition of accounts payable
Item12/31/1012/31/09
Suppliers
Mining creditors
Other creditors and liability accounts
Transactions with the concessionaire
Intra-Group transactions
Other obligations
Total
19.3.1 CompositionItem12/31/1012/31/09
Suppliers
Domestic
Foreign
Mining creditors
Cabinda Association
Other creditors and liability accounts
Total
19.3.2 CompositionItem12/31/10
Transactions with the concessionaire
Oil taxes- Bonuses
- Price caps
- Concessionaires income
Transactions with the National Treasury- Taxes payable- Tax contingencies
Increases and deferments
Intra-Group transactions
Sonair
Sonangol Shipping (Angola) Luanda
Sonangol P&P
MS TelecomSONIP
Other obligations
FINA (minority shareholders)
Social and material incentives fundSomoilKotoil
OGE Dividends
OGE CustomsCapital investment tax (IAC)
Industrial Tax Law 7/97
FS/FST concession
Others
Total
The amounts payable to Somoil, Kotoil, and the FS/FST concession relate to the sale on their behalf, at end-2009, of crude oil, the delivery of which is confirmed during the subsequent financial year.19.3.3 Transactions with the National Treasury Transactions with the concessionaire
ItemGeneral Table of Transactions with the Concessionaire
Initial BalanceAmount PayableAmount ReceivableAmount PaidFinal Balance
Current
Initial balanceConcessionaires incomeExternal debt serviceTransfer to the concessionaireNovas CentralidadesOthersSubtotal
BonusesPrice capsSubtotal
Total
As regards transactions with the government, the concessionaires income represents the value of profit oil from the various Blocks under production, which is settled in three forms: (i)payments directly to the accounts of the National Treasury; (ii)transfers to the accounts of the concessionaire; and (iii)payments representing government debt service. The total amount recognized as profit oil in2010was AKZ1,513,923,340,867. The sum of AKZ1,600,666,338,005 was validated in2010, but, from it, income for the year, net of payments related to2009 liabilities, stood at AKZ77,896,185,799.Accordingly, the liabilities pending settlement at December31,2010 were those established as at December2010 plus the Block17 liabilities for December2009. These liabilities were settled during the first quarter of2011.Based on the current legislation, the concessionaires income declared by the company is subject to review by the DNI; this explains the tax contingencies recorded as a liability for the company. The amounts posted in the amended accounts for FY2007 and FY2008 are shown under that heading.Under article 54 of Law13/04 on the Taxation of Petroleum Activities, payments from the national concessionaire revert to the General Government Budget. These are covered under price caps and bonuses (which include contributions to social projects, trade discovery, and signings) and relate to payments made by the companies for the development of oil operations.Sonangol - EP disbursed funds for the development of a housing project called NovasCentralidades, under the responsibility of its subsidiary SONIP. Those funds will be recovered, within the legal framework of the state, through transactions with the concessionaire.The amounts received from these companies operating in the oil sector are in the custody of Sonangol - EP, as concessionaire, and constitute a liability of Sonangol - EP to the National Treasury.19.3.4 Transactions with the National Treasury Oil taxes payable
ItemGeneral Table of Transactions with the National Treasury
Initial BalanceAmount Receivable/PayableAmount PayableAmount PaidFinal Balance
CurrentAdditional
Tax payable
- Production fee- Oil transaction fee- Oil income tax
Total
The amount of tax payable relates to the December liabilities that will be settled in2011, which include the adjustments made at the end of the period when the final returns are recorded.Under the legislation in force, the final tax declared by the company is subject to revision by the DNI. This explains the tax contingencies posted in the amended accounts for FY2002 to FY2008.19.3.5 Transactions with the National Treasury Tax contingencies
ItemGeneral Table of Transactions with the National Treasury
Initial BalanceAmount Receivable/PayableAmount PayableAmount PaidFinal Balance
CurrentAdditional
Tax contingencies
- Production fee- Oil transaction fee- Oil profit tax- Concessionaires income- Dividends for collection
Total
21. Other current liabilities21.1 Composition of other current liabilities
ItemMovement
20102009
Liquidity management
- Sonangol Distribuidora- Sonangol Logstica- MS Telecom
Total
This item includes the loans granted to Sonangol EP, relating to the investment of cash surpluses from the subsidiaries Sonangol Logstica, Sonangol Distribuidora, and MSTelecom. Those loans are subject to respective contracts.
21.2 Composition of short-term liabilities
ItemCurrent Amount
Sonangol Finance- SNL Finance US$1 bn (SCB)- SNL Finance US$3 bn (SCB)- SNL Finance US$2.5 bn (SCB)- SNL Finance US$1.5 bn (CA-CIB)- SNL Finance US$1 bn (CDB & SCB)- SNL Finance US$2.5 bn (ICBC)
Total
The above amounts represent contractual liabilities that the company must assume in2011to the financial institutions.
NOTES TO THE EARNINGS STATEMENT22. Sales 22.1 Composition, by area of business and by market
Area of BusinessDomestic MarketForeign MarketTotal
201020092010200920102009
Mining
Crude oil Associate
Crude oil - Concessionaire
Accessory products
Deliveries to refinery
Total
24. Other operating income24.1 Other operating incomeType12/31/1012/31/09
Income from secondary business
Sales of refined products
Marketing fees
Other
Total
Included in other operating income are operating costs collected from Sanha and the income related to bonuses paid for trade discovery.
25.1 Change in finished products and goods in the manufacturing process25.1.1 Composition of the change in the concessionaires stockItemInitial StockFinal StockChange/Year
Crude oil- Concessionaires stock
Total
The concessionaires stock item shows the concessionaires rights (profit oil) at the end of each period. This is recognized as the concessionaires asset and/or liability with respect to the Group. Accordingly, the change corresponds to any decrease noted in the final stock after deduction of the volume of exports for the year.
25.2 Surrender of proceeds from the concessionaires sales to the government
Concessionaires income12/31/1012/31/09
Concessionaire - Block 2-85
Concessionaire - Block 2-05
Concessionaire - Block 3-85
Concessionaire - Block 3-91
Concessionaire - Block 3-05
Concessionaire - Block 3 CanukuConcessionaire - Block 4
Concessionaire - Block 14
Concessionaire - Block 15
Concessionaire - Block 17
Concessionaire - Block 18
Total
The amounts involved represent income from crude oil salesthe rights of the concessionaire at least 90percent of which must, under article 55(2) of Law13/04 of December24,2004, be surrendered to the National Treasury. In the absence of a costing system that makes it possible to separate out the costs of exercising the concessionaire function, the company has opted for the largest deduction possible, constantly bearing in mind the charges that are legally eligible for such a deduction.
27. Cost of stocks sold and raw materials consumedAssociation Contract
Item12/31/1012/31/09
Production fees
Production costs
Production expenses
Marketing expenses- Associate- Concessionaire
Subtotal
Charges for refined products
Total
28. Payroll costs28.1 CompositionType12/31/1012/31/09
Wages and salaries
Special services
Subsidy for shift in function
Training expenses
Premiums and other additional remuneration
Family bonuses
Social gatherings and social action
Accommodation expenses
Medical expenses
Insurance expenses
Pensions
Uniforms
Other
Total
29. AmortizationAmount in AKZ
Type12/31/1012/31/09
Tangible assets
- Buildings and other construction
- Basic equipment
- Transport equipment
- Administrative equipment
Subtotal
Intangible assets
- Intangible fixed assets
Subtotal
Investments in mining
Research expenses
Development expenses
Inventory material
Subtotal
Total
30. Other costs and operating losses30.1 CompositionType12/31/1012/31/09
Conservation and repairs
Representation expenses
Fuel and lubricants
Rent and leases
Communications
Insurance
Information technology hardware
Travel and accommodation
Fees and adjustments
Publicity and advertising
Surveillance and security services
Offers and grants
Taxes and fees
Specialized work
Hygiene and comfort material
Water and electricity
Auditors and consultants
Office material
Legal cases and notary services
Food products and meals
Books and technical documentation
Other
Total
31. Profit and loss account31.1 CompositionIn AKZ
Type12/31/1012/31/09
Profits and gains
Interest
Return on property investments
Return on equity investments
Positive exchange differences
Costs and losses
Interest
Banking expenses
Financing-related charges
Negative exchange differences
Provision for financial investment
Total
32. Balances with subsidiaries and associatesCompanySubsidiary AccountDividend ShareDividendPartnersIAC (10%)Dividend
Shareholder Equity2009 BalanceSonangol - EPHoldingsPaidOwed
SubsidiariesSonangol P&P
Sonangol Gs Natural
Sonangol Refinaria de Luanda
Sonangol Shipping
Sonangol Logstica
Sonangol Distribuidora
Sonangol Finance Ltd
Sonangol Holdings Ltda
Sonair
MST Telecomunicaes
Essa
Total Subsidiaries
Associates
Banco Millennium BCP
Total Associates
Grand total
This item concerns the amounts collected from the subsidiaries by way of dividends for the2009financial year, minus the capital investment tax (IAC), which is withheld by the subsidiaries.
33. Nonoperating balances33.1 CompositionIn AKZ
Type12/31/1012/31/09
Profits and gains
Gains on fixed assets
Adjustment related to previous years
Costs and losses
Provisions for doubtful loans
Losses on fixed assets
Irrecoverable debt
Adjustment related to previous years
Compensation
Discontinuation of operations (projects)
Other losses
Total
By management decision, provisions were made and recognized as irrecoverable debt with respect to amounts receivable from Sonangol Congo (50percent) and Kwanda Ltda (100percent).
34. Noncurrent balances34.1 Composition
In AKZ
Type12/31/1012/31/09
Noncurrent profits and gains
Other gains
Noncurrent costs and losses
Fines and penalties
Other losses
Total
35. Income taxUnder the legislation in force, the companys final income tax liabilities stood at AKZ102,902,461,541. This amount relates to oil income tax and the oil transaction fee.35.1 Adjustment to the companys tax liabilities35.1.1 Adjustment to the companys tax liabilities for 2010Tax ReturnAdditional Tax (-)/ Tax Credit (+)
TypeProvisionalFinal
Fees
Production fees
Taxes
Oil transaction fees
Oil income tax
Profit oil
Concessionaires income
Total
The table above shows the difference between the taxes recognized in the provisional tax returns and those in the final tax returns as at 12/31/10. The latter amount may be altered in the accounts by amendment of the Tax Assessment Committee, so that changes can be expected to the final tax.35.1.2 Production feesYearTax Returns
Final (Sonangol)Review CommitteeFinal (Min. of Finance)
2002200320042005200620072008
35.1.3 Oil transaction feesYearTax Returns
Final (Sonangol)Review CommitteeFinal (Min. of Finance)
2002200320042005200620072008
35.1.4 Oil income taxYearTax Returns
Final (Sonangol)Review CommitteeFinal (Min. of Finance)
2002200320042005200620072008
35.1.5 Concessionaires incomeYearTax Returns
Final (Sonangol)Review CommitteeFinal (Min. of Finance)
2002200320042005200620072008
39. Balances with related entities39.1 Composition of current transactionsCompany12/31/09Loans GrantedRepayment12/31/10
SubsidiariesSonangol P&PSonangol Gs NaturalSonangol Shipping Holdings LtdSonangol LogsticaSonangol Holdings LdaSonairEssaSONIP
Total
39.2 Composition of noncurrent transactionsCompany12/31/09Loans GrantedRepayment12/31/10
SubsidiariesSonangol P&PSonangol Gs NaturalSonangol Shipping Holdings LtdSonangol LogsticaSonangol Holdings LdaSonairEssaSONIP
Total
Apart from the transactions with subsidiaries shown in this table, the company had already disclosed transactions with the National Treasury (see note 11- no. 53 and note16- nos. 65 and 66) as well as transactions with public enterprises (EDEL onlysee note11) and with associated companies (note 7).
41. PensionsThe company does not recognize any balance sheet liability as regards the defined pension plan, insofar as the general chart of accounts considers its recognition as a temporary exclusion. Nonetheless, the company is holding funds in its assets to cover future deficits in the cost of the pension plan.The funds being managed by Sonangol and AAA Penses show the following cumulative balances:
[Date]Cumulative Pension Plan Balance
AAA Penses Sonangol - EP
12/31/00
12/31/01
12/31/02
12/31/03
12/31/0412/31/0512/31/06
12/31/07
12/31/08
12/31/09
12/31/10
42. Financing guaranteeSonangol - EP is assumed to be the guarantor of external financing for the Republic of Angola from international financial institutions, in the sum of $4,500million. The guarantees in question are established through the earmarking of crude oil ladings/sales, in accordance with the pertinent contractual clauses.43. Events occurring after the balance sheet date43.1 Kwanza Sul Cement Factory (FCKS)By decision of the companys shareholders, the ongoing investment in the FCKS construction project will be called the Instituto de Desenvolvimento Industrial de Angola (Angolan Industrial Development InstituteIDIA). Disbursements made by the company to date under the Business Development Law 14/03 of July18,2003 will be recovered in accordance with the pertinent procedures.43.2 Sonangol Holdings Limitada (SHL)By decision of the companys shareholders, the financial investments secured by its exclusive subsidiary Sonangol Holdings in some of the associated companies will undergo adjustments, the nature and size of which are yet to be determined. Such adjustments will give legitimacy to the subsidiary in securitizing future income (dividends), with a substantial impact on its capacity to repay its liabilities to the company.44. Additional mining information44.1 Sonangols stake in joint ventures
Area/BlockPercen-tageInvestorStatusOperatorOther Companies
1. Concessions in Angola
Block 0 - Cabinda Areas A and B41Sonangol - EPProductionChevron TexacoTotal, Eni
Block01/0620Sonangol P&PExplorationTullow Angola BVProdoil, Force Petroleum
Block 2/8525Sonangol P&PProductionSonangol P&PBraspetrom BV, Chevron, Somoil, Poliedro Oil, Kotoil
Block 2/05 Morsa West70Sonangol P&PProductionSonangol P&PSomoil
Block 3/0525Sonangol P&PProductionSonangol P&PChina Sonangol, Ajoco, Eni, Somoil, Nafigas, Ina-Nafte
Block 3/85 and 3/916.25Sonangol P&PProductionTotalEni, Ajoco, Svenska, Nanaftaplun, Naftagas
Block 4 - Gimboa 50Sonangol P&PProductionSonangol P&PNorsk Hydro, Somoil, ACR
Block 5/0620Sonangol P&PExplorationVaalco AngolaInter Oil
Block 6/0620Sonangol P&PExplorationSonangol P&PFalcon Oil, Initial Oil
Block 8/0520Sonangol P&PProductionMaersk Oil & GasSvenska
Block 14Block 15/06
Block 162015
20Sonangol P&PSonangol P&P
Sonangol P&PProductionProduction
ExplorationChevron TexacoEni
Maersk Oil & GasEni, Total, PetrogalSSI, Total, Falcon Oil, Statoil, PetrobrasOdebrecht, Ocean Angola Devon
Block 17/ 0624Sonangol P&PExplorationTotalSSI, Falcon Oil, ACR, Partex, Somoil
Block 18/0620Sonangol P&PDevelopmentPetrobrasSSI, Falcon Oil, Grupo Gema
Block 2320Sonangol P&PDevelopmentMaersk Oil & GasSvenska
Block 2620Sonangol P&PExplorationPetrobras
Block 3120Sonangol P&PDevelopmentBPEsso, Marathon, SSI, Statoil
Block 32Block 332020Sonangol P&PSonangol P&PDevelopmentExplorationTotalTotalEsso, Marathon, Petrogal, SSIFalcon Oil, NIR, GALP
Block 3420Sonangol P&PExplorationSonangol P&PNorsk Hydro, Phillips, Braspetro, Shell
2. International concessions
Blocks in Brazil
Block C-M-498100Sonangol P&PExplorationSonangol P&P Brazil
Block C-M-622100Sonangol P&PExplorationSonangol P&P Brazil
Block S-M-22560Sonangol P&PExplorationSonangol P&P BrazilPetrobras
Block ES-T-410/Espirito Santo50Sonangol P&PExplorationPetrobras
Block ES-T-401/Espirito Santo50Sonangol P&PExplorationPetrobras
Block REC-T-166Block REC-T-130Block POT-T-749Block POT-T-794Block POT-T-748Block BT-REC-18-Maritaca Field575030303050Sonangol P&PSonangol P&PSonangol P&PSonangol P&PSonangol P&PSonangol P&PExplorationExplorationExplorationExplorationExplorationDevelopmentSonangol P&P BrazilSonangol P&P BrazilSonangol P&P BrazilSonangol P&P BrazilSonangol P&P BrazilSonangol P&P BrazilSomoilPetrobrasPetrobrasPetrobrasPetrobrasSomoil
Block BT-REC-7/Cambacica Field25Sonangol P&PDevelopmentPetrobras
Block BT-SEAL-18/Aracuo Field30Sonangol P&PProductionSonangol P&P BrazilPetrobras
Block BT-REC-19/Guanambi Field20Sonangol P&PProductionPetrobras
Iraq Block75Sonangol P&PExplorationSonangol P&PNajmah & Qaiyarah
Iran Block20Sonangol P&PExplorationSonangol P&PSouthpars 12 & Petropars
Gulf of Mexico Blocks20Sonangol P&PExplorationCobalt
Sudan Block30Sonangol P&PExplorationSonangol P&PHS Resources & other entities
3. Gas consortium
Open Area40SonagsExplorationSonagsENI, Gas Natural, GALP, EXEM
4. Angola LNG Project
Zaire Soyo22SonagsDevelopmentAngola LNG LDTENI, BP Angola, Total
Information in addition to mining data relates to the stake of Sonangol - EP in Block0, as an investor, and its indirect stake in the other blocks through its subsidiary Sonangol Pesquisa e Produo.
44.2 Summary of crude oil and natural gas reserves(Thousands of barrels)Units
Reserves at January 1, 2010
Revisions
Purchases
Sales
Production
Reserves at December 31, 2010
This information, concerning proven reserves, relates solely to claims secured by Sonangol - EP, as investor in Block0, and by Sonangol Pesquisa e Produo, as investor and operator in the other blocks, as shown in note 42.1- Sonangols stake in joint ventures.
As a result, the stakes of Sonangol EP, as concessionaire, are not included, owing to the characteristics of the production sharing agreements, which determine the degree of predictability of the oil resources.
/s/
Jacinto Manuel VelosoChief, Accounting Department
/s/
Raquel Rute da Costa David VungeDirector of Finance
/s/
Mbiavanga FilipeDirector of Internal Control and Audit
Seen and approved
/s/
Francisco de Lemos Jos MariaExecutive Director
/s/
Manuel Domingos VicenteChairman of the Board of Directors