Introduction
According to B.Beamon (10098), supply chain can be defined as “integrated process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together in an effort to: (1) acquire raw materials, (2) convert these raw materials into specified final products, and (3) deliver these final products to retailers”. (1). Supply chains are usually characterized by forward movement of products and opposite flow of relevant data. As it is stated in the SAGE publication “Supply chain management” (2001), basic supply chain consists of a company, immediate supplier, and an immediate customer directly linked by one or more of the upstream and downstream flows of products, services, finances and information. (2)
Company’s general characteristics& activities
According to the information, posted at company’s official website (2013), Sonnagol is “the sole concessionaire for exploration of oil and gas on the subsoil and continental shelf of Angola, and is responsible for the exploration, production, manufacturing, transportation and marketing of hydrocarbons in Angola”. (Sonangol EP official website, 2012) The company was established in 1976 as a stated-own enterprise, which aimed at effective managing of Angolan hydrocarbon resource exploration. Nowadays company’s primary goal lies in “prospecting, research, development, production, transportation, commercialization and transformation of liquid and gaseous hydrocarbons and their derivatives, including petrochemicals”. The company can also “ engage directly or indirectly in activities complementary or ancillary to its corporate purpose or any other industrial or commercial purposes”. (Sonangol EP official website, 2012) It can also establish new companies and acquire the capital of an established companyin the whole or partly. Sonangol has lots of subsidiaries and takes part in a wide variety of joint ventures. It maintains foreign facilities in such cities as Brazzavile (Congo), Hong Kong (China), London (the UK), Houston (the USa) and Singapore).
Both Sonangol and its subsidiaries share the same values, which are orientation to the client, excellence in performance, team work, quality, health, safety and environment, ethical conduct and effective communication, establish mutual goals and work together to implement them. The Sonangol group is united by the following mututal mission: “to establish a business system around the oil industry, focusing on all aspects of management of hydrocarbon resources, environmental preservation and industrial safety” (Sonangol EP official website, 2012). Sonangol’s subsidiaries operate in such areas as exploration of crude oil, production and marketing of crude oil and petroleum oil derivatives. Main areas, between which functions of subsidiaries are divided, are oil concessions (exclusive rights to exploration of oil and gas in Angola), exploration and production, marketing and transportation, refining and distribution (one of largest segments), which includes processing of raw materials (crude oil), organizing storage and distribution of petroleum-related products.
Sonangol Supply Chain
As we have already mentioned, Sonangol has more than 30 subsidiaries and participates in a wide variety of joint ventures. Having such subsidiaries and participation in joint ventures lets Sonangol EP establish supply chains within its influence area, not involving any “extraneous” actors. As Sonangol EP has exclusive concession rights to explore Angolan shelf for oil and gas, it does not need any crude oil and gas suppliers. Other companies are involved in such processes as processing crude oil and gas, organizing storage of primary products, marketing and distribution. So, let us consider activities of Sonangol’s subsidiaries to understand the way Sonangol EP gets its primary products processed and traded off.
Such upstream activities as fabrication, drilling and support services are performed by such joint ventures as Petromar, Sonaid, Technip Angola, Angloflex, Sonastolt, Sonamer and Kwanda Lda.
Turning to downstream activities, we cannot help mentioning one of most important subsidiaries of the company is Sonangol Distribuidora. This company aims at processing primary products, extracted from the shelf and offers services related to distribution of oil derivatives. First of all, “Sonangol Distribuidora is the major distributor of gasoline and diesel in Angola, with functional gas stations in all provinces. Most of our gas stations have convenience shops with car care and convenience store products”( Sonangol Distribuidora official website, 2012) It also aims at distributing such products as different types of fuels, liquefied propane gas, kerosene and even heating appliances. It is worth mentioning that is Sonangol Distribuidora functions only at Angolan market. Oil derivatives are sold via the brand NGOL, which is owned by Sonangol.
As we have already mentioned, Sonangol’s subsidiaries function not only within Angolan market, but all over the world. Let us research into Sonangol’s EP business bonds with these companies. One of most outstanding ones is China Sonangol International Holding. China Sonangol International Holding. Deals merely with investments and encompasses four major sectors of business, which are oil and gas, mining industries and infrastructure, real estate and transportation. The holding ensures global investments. Some of them come back to other Sonangol subsidiaries.
Other overseas subsidiaries of Sonangol are direct parts of Sonangol EP supply chain. For instance, Sonangol in Cape Verde and in Congo concentrate on marketing of oil derivatives and related issues. Activities of Sonangol Kongo are wider than the ones of Sonangol in Cape Verde and include “storage, transportation and import of refined oil products”. Downstream activities are also exercised by such Sonangol subsidiaries as Sopor (Portugal), Sonangalp (Angola), Enco (storage of products in Angola) and Sonangol Cargo SARL. Furthermore, such subsidiaries as Sonasia, Sonangol in London and Sonangol in Houston focus on ensuring the distribution of oil derivatives to Asian, European and American markets respectively.
Uniqueness of supply chains, established by Sonangol EP, lies in the fact that almost all companies, which participate in supply chains, are Sonangol EP subsidiaries and joint ventures, in which Sonangol participates. Furthermore, company’s supply chains erasure distribution of its products at world’s most important markets – African, American, Asian and European ones. Moreover, even non-core activities, which are necessary to ensure movement of goods along the supply chain are exercised by Sonangol’s joint ventures. For instance, Sonangol Shipping is busy with transporting crude. According to Sonangol’s EP official website (2012), Sonangol Shipping ”fleet of oil tankers has national and international routes”. Sonanship is another transportation subsidiary, which exercises maritime transportations along with Sonangol Shipping. The difference in their activities lies in the fact that the former concentrates on maritime transportation of oil derivatives, whereas the latter focuses on transportation of primary products. Air transportations to Angolan oil industry are provided by Sonair. Particular role in ensuring transportation belongs to Sonasurf. Other subsidiaries and joint ventures, which concentrate on performing support activities, are WAPO Angola (general services), Banco de Comercio e Industria and Banco Africano de Investimentos (banking services), Sodispal (services related to food, retail and catering), Manubito (vessel scheduling) and Bricomil (civil engineering services).
Conclusion
Sonangol EP is a world-known Angolan company, which has exclusive rights to explore oil and gas on the subsoil and continental shelf of Angola. The main peculiarity of company’s supply chains lies in the fact that almost all supplies and support activities are exercised via company’s subsidiaries and joint ventures. Activities of subsidiaries and joint ventures encompass both upward and downward ones, and ensure distributing company’s products to markets all over the world. The fact that both upstream, downstream and non-core activities are held by company’s subsidiaries and joint ventures helps Sonangol EP keep an eye on the way the whole supp0ly chain functions and influence possible changes with respect to any type of related activity. The company also has a chance to exercise control over performance of its overseas subsidiaries in Africa, Asia, the USA and Europe.
References
Beamon, B., 1998. Supply chain design and analysis. International Journal of Production Economics, 55(3), pp.281-294
Mentzer, J. (ed.)., 2001. Supply chain management. Thousand Oaks: SAGE publications
Sonangol EP., 2012. Official website. Available at < http://www.sonairsarl.com> [Accessed 10 March 2013]
Sonangol Distribuidora , 2012. Official website. Available at < http://www.snl-distribuidora.com>[Accessed 10 March 2013]
