February 28, 2018 / 4:16 PM / a year ago

UPDATE 2-Angola oil production seen steady in 2018 - Sonangol

* Oil output forecast at 1.6 mln barrels per day in 2018

* Sonangol chairman targets investment and exploration

* Chairman says debt down to $5 bln, from $14 bln in 2015 (Adds Sonangol debt figure, chairman quote)

By Stephen Eisenhammer

LUANDA, Feb 28 (Reuters) - Oil output in Angola, Africa’s No. 2 crude producer, is forecast to total around 1.6 million barrels per day in 2018, the chairman of state-run oil company Sonangol said on Wednesday, close to the 1.632 million bpd it averaged last year.

Sonangol’s Carlos Saturnino said he aimed to keep production steady by launching fresh investment and exploration in the sector, with Angola facing a gradual decline in oil output as aging fields become less productive.

The fall in crude prices has devastated government finances over the past few years as oil makes up 95 percent of exports.

In 2016, Angola produced 1.72 million bpd but output has been partly constrained since then by OPEC-mandated cuts.

Speaking at a news conference in Luanda, Saturnino said net profit for Sonangol, which regulates Angola’s oil sector, was $224 million in 2017 versus $81 million the previous year when oil prices were lower.

Debt in 2017 fell to around $5 billion from $14 billion in 2015, Saturnino said, due mainly to a government cash injection of about $10 billion over that period.

Of the current $5 billion in debt, Saturnino said just under $2 billion was with Chinese banks, namely the China Development Bank and Bank of China.

It was Saturnino’s first briefing since Angolan President João Lourenço fired Isabel dos Santos, daughter of his presidential predecessor, from the helm of Sonangol.

Lourenço took power in September and is seeking to win credibility with international investors and shed Angola’s image as an opaque oil economy with rampant corruption.

Saturnino said Sonangol had been “sick” when he took over in November and criticised the previous administration as being over-reliant on costly consultants and having conflicts of interest.

“Sonangol is sick, it has challenges... but it’s trying to treat itself, to re-gain muscle and in time it will run and sprint again,” he said to loud applause from employees. (Editing by James Macharia; Editing by Tom Balmforth and Dale Hudson)

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