Presentation is loading. Please wait.

Presentation is loading. Please wait.

PRESENTED AT THE 11 TH AFRICA OIL & GAS TRADE & FINANCE CONFERENCE (Kenyetta International Conference Centre) NAIROBI, KENYA by 23 rd - 25 th April 2007.

Similar presentations


Presentation on theme: "PRESENTED AT THE 11 TH AFRICA OIL & GAS TRADE & FINANCE CONFERENCE (Kenyetta International Conference Centre) NAIROBI, KENYA by 23 rd - 25 th April 2007."— Presentation transcript:

1 PRESENTED AT THE 11 TH AFRICA OIL & GAS TRADE & FINANCE CONFERENCE (Kenyetta International Conference Centre) NAIROBI, KENYA by 23 rd - 25 th April 2007 “Is There A Future For African Refining?” ENGR. A.L. YAR’ADUA, FNSChE GROUP EXECUTIVE DIRECTOR, REFINING & PETROCHEMICALS, NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC) NOT AN OFFICIAL UNCTAD RECORD

2 African Refining Prior to 1954 there were no refineries in Africa. In the 50 years between 1954 and 2004, 48 refineries were built in Africa.Prior to 1954 there were no refineries in Africa. In the 50 years between 1954 and 2004, 48 refineries were built in Africa. In 1954 the first African refineries were built in Algiers (CFP/Total) and Durban (Socony/Mobil).In 1954 the first African refineries were built in Algiers (CFP/Total) and Durban (Socony/Mobil). Luanda refinery (Petrofina) in 1958, and refineries in Kenya (Shell/BP), Ghana (ENI/Agip), Senegal (consortium) in 1963 and Nigeria in 1965.Luanda refinery (Petrofina) in 1958, and refineries in Kenya (Shell/BP), Ghana (ENI/Agip), Senegal (consortium) in 1963 and Nigeria in 1965. In the 1970’s, several state controlled refineries were built, such as Arzew in Algeria, WRPC & KRPC in Nigeria, CORAF in Congo, and SoNaRa in Cameroon.In the 1970’s, several state controlled refineries were built, such as Arzew in Algeria, WRPC & KRPC in Nigeria, CORAF in Congo, and SoNaRa in Cameroon. A final burst of refineries occurred in the 1980’s, including a refinery at Port Harcourt in Nigeria. New refineries built in the past 10 years are Khartoum ( 2001), and MIDOR in Egypt in 2002.A final burst of refineries occurred in the 1980’s, including a refinery at Port Harcourt in Nigeria. New refineries built in the past 10 years are Khartoum ( 2001), and MIDOR in Egypt in 2002. Historical Background

3 Refining Capacity (January 2002) Number of Refineries Crude Oil Distillation % of Africa Capacity Algeria445014.0 Angola1391.2 Cameroon1421.3 Congo (Brazzaville) 1210.65 Congo (Kinshasa) 1150.46 Cote d'Ivoire (Ivory Coast) 1652.02 Egypt972622.60 Eritrea1150.46 Gabon1170.53 Ghana1451.40 Kenya1902.80 Liberia1150.46 Country Refining Capacities Refining Capacity (January 2002) Number of Refineries Crude Oil Distillation % of Africa Capacity Libya334310.71 Madagascar1150.46 Morocco21554.84 Nigeria444514.0 Senegal1270.84 Sierra Leone 1100.31 Somalia1100.31 South Africa 446914.64 Sudan31223.81 Tanzania1150.46 Tunisia1341.06 Zambia1240.74 Algeria, Egypt, Libya, Nigeria, South Africa – The Big Players African Total Refining Capacity 3,202,000 BPD

4 50 built, 12 closed, 38 operating50 built, 12 closed, 38 operating 17 countries have refineries, 37 do not17 countries have refineries, 37 do not Smallest 7,000 B/D, largest 300,000B/DSmallest 7,000 B/D, largest 300,000B/D 19 North of Sahara, 19 South of Sahara19 North of Sahara, 19 South of Sahara 19 English Spoken, 18 French, 1 Portuguese19 English Spoken, 18 French, 1 Portuguese 1 coal based, 1 gas based (+1 under construction-Nigeria GTL)1 coal based, 1 gas based (+1 under construction-Nigeria GTL) 13 complex, 25 simple (No cracking)13 complex, 25 simple (No cracking) 20 government owned, 18 have some private shareholding20 government owned, 18 have some private shareholding Operating Refineries

5 Common African Priorities Outlook for Global Refining margins Changes to product specifications Deregulation, removal of government subsidies Threat of new refinery capacity in the Middle East Technology upgrades for African refineries “Dumping” of low quality products in Africa Impact of investment in African refining Performance of African refineries Training - technical/commercial/economic Black market activity Freight rates and ship vetting regulations Safety and Environment Issues Facing African Refining Industry

6 Products Supply & Demand 37 countries import all their finished products 37 countries import all their finished products 6 countries with refineries also allow private imports 6 countries with refineries also allow private imports All have a regulatory body for specs, imports, licences, price structures, etc All have a regulatory body for specs, imports, licences, price structures, etc Most countries have only 1 or 2 product import terminals Most countries have only 1 or 2 product import terminals Nigeria has 25 private import terminals and over 100 licensed importers Nigeria has 25 private import terminals and over 100 licensed importers Oil Production 9.5 m b/dOil Production 9.5 m b/d Refinery capacity 3.1 m b/dRefinery capacity 3.1 m b/d Refinery throughput 2.5 m b/dRefinery throughput 2.5 m b/d Additional Demand 2.5 m b/dAdditional Demand 2.5 m b/d Refineries’ Production

7 TAXING Petroleum Products In Africa The region is net importer of petroleum products West & Central Africa 14 million MT of clean products East & Southern Africa 9 million MT of clean products

8 TAXING Petroleum Products In Africa… Wide variations in pump prices within the same region – mainly due to varying tax structures Gasoil: 103 Gasoline: 112 Gasoil: 89 Gasoline: 93 Gasoil: 63 Gasoline: 49 Gasoil:109 Gasoline: 113 Gasoil:119 Gasoline: 125 +16% +12% +63%+129 % +90% +41% +73% +131% +11% +16 % +20% Gasoil: 122 Gasoline: 153 Gasoil: 81 Gasoline: 76 Gasoil: 75 Gasoline: 76 Gasoil: 101 Gasoline: 105 Gasoil: 97 Gasoline: 115 Gasoil: 124 Gasoline: 129 +101 % +51% +21 % +46 % +28% +12% +65 % +70 % +19% Cross boarder smuggling, Adulteration of products, Closure of small refineries, etc

9 African Gas Oil Imports 12,830 2003 12,830 14,990 2004 14,990 10,000 2001 10,000 PricePrice

10 New Capacity Additions  Will there be a products GLUT and collapse in prices? ASIA, MIDDLE EAST & AFRICA 3 In Nigeria 1 In Algeria 1 In Ghana 1 In Sudan Also one each in Libya and Egypt Others Angola – Lobito – 200mb/d Libya – Masuria – 200mb/d

11 Surge In Engineering Costs Escalation of New Build Costs Impact of Cost Escalation CountryCompanyLocationType,000BPD$bn KuwaitKPCAl ZoarRefinery6306.415 UAETakreer/ConocophillipsFujairahRefinery50011.8 EgyptNoor DevelopmentKafr Al SheikhRefinery3509.514 VietnamPetroVietnamNghi SonRefinery14035.25 BrazilPetrobras/PDVSAPernambucoRefinery2002.54 EcuadorPetroecuadorMantaRefinery2002.54 USATesoroAnacortesCoker0.250.4 Cancelled Projects USATesoroAnacortesCoking United RefiningWarrenCoking SunocoNortheast RefineriesCDU Expansion PhillipinesShellTabangoCDU Expansion IndonesiaPertaminaNew Capacity QatarExxonGTL Project Reviewed/Delayed USAMAPGarvvilleExpansion GermanyConocophillipsWilhelmshavenCoking Capacity Addition Constraints

12 Close-outwww.nnpcgroup.com Conclusion The question is “Is there a future for African refining? Answer is a capital YES. Africa after Asia will become the next region with clear growth for vehicle ownership in the next few decades; hence a rise in products demand is anticipated. This makes the market now and in the future re- assuring. Refining investment costs remain high and this indeed, is a huge threat to the growth of the sector. But we must aim towards forming partnership with well intentioned investors.

13 Close-outwww.nnpcgroup.com


Download ppt "PRESENTED AT THE 11 TH AFRICA OIL & GAS TRADE & FINANCE CONFERENCE (Kenyetta International Conference Centre) NAIROBI, KENYA by 23 rd - 25 th April 2007."

Similar presentations


Ads by Google