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September 13, 2009

Chevron to support farmers in Angola

Chevron Corp. signed a memorandum of understanding with the US Agency for International Development and the Cooperative League of the United States of America in Angola on Aug. 9 to supply $6 million for agricultural redevelopment.

US Secretary of State Hillary R. Clinton, in remarks at the signing ceremony in Luanda, Angola, called the MOU “a down payment on the future” to revitalize small and medium farming in Angola. “Equally important is a model of the global architecture of cooperation we are building through partnership with and beyond government,” she continued.

“The partnership between USAID, Chevron and CLUSA represents a new approach to development assistance on the part of the Obama administration. While we will continue to provide emergency food aid to address immediate crises, we are focused on helping countries build mechanisms that sustain progress in agriculture over the long term,” Clinton said.

She cited Alan Kleier, Chevron’s managing director of global upstream and gas, and Estavao Rodrigues, CLUSA’s Angola director, for their leadership.

Chevron signed the agreement two days after reporting a successful offshore oil and gas discovery by its affiliate, Cabinda Gulf Oil Company Ltd. (CABGOC) and its partners in Block 0 adjacent to Angola’s Cabinda coastline. CABGOC is operator and holds a 39.2% interest, with Angolan national oil company Sonangol (41%), Total E&P (10%), and ENI Angola Production BV (9.8%).

In a fact sheet at its website, USAID, which is part of the US Department of State, said that the MOU with Chevron and CLUSA, which is a division of the National Cooperative Business Association, will help Angola diversify its economy by revitalizing small and medium-scale commercial farming, and by promoting “agricultural development that is environmentally friendly, socially just, and economically sustainable.”

It said that the partnership’s mechanisms include providing finance, business and training support to small and medium scale farmers and related agricultural enterprises, strengthening agrarian schools’ capacity, assisting non-government agencies to deliver savings and credit products, technically assisting commercial banks to provide wholesale loans to rural financial institutions, and financing and supporting private sector-based agricultural initiatives.

Angola is still recovering from 27 years of civil war, which ended in 2002, and successfully elected a national assembly in 2008, USAID said. “As a potential powerhouse for regional trade and investment, Angola-which is already sub-Saharan Africa's second largest oil producer and the sixth largest source of US imported oil-has tremendous agricultural resources and the potential to recover its status as an agricultural exporter and make an important contribution to regional growth and stability,” it said.

The country is Africa’s third biggest oil producer, behind Nigeria and Libya, with 1.9 million bbl a day of output, according to the US Energy Information Administration. It said that the country exports more than 90% of its crude to the United States and China, which has agreed in recent years to provide multi-million dollar oil-backed loans to fund infrastructure development.

The Chinese loans, which are costly and depend heavily on international oil prices, put Angola in a position where it could break ties with the International Monetary Fund, EIA said. “Nonetheless, the country is experiencing high levels of foreign direct investment, particularly in the oil sector,” the US government’s energy analysis and forecasting agency said.

It said that in addition to Chevron, other major international oil companies active in Angola include BP Plc., Exxon Mobil Corp., Occidental Petroleum Corp., AP Moeller-Maersk AS, Roc Oil Co. Ltd., Statoil, Total, ENI, and Sinopec. US independent producer Devon Energy Corp. also has operations there.

In her Aug. 9 remarks at the MOU signing ceremony, Clinton thanked the three participants. “Let me especially thank Chevron for recognizing that it is important to give back to the countries where the natural resources come from,” she added.

Penn Energy

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