NOT AN OFFICIAL UNCTAD RECORD
The Future of Africa’s Refining in a
Liberalized Economy
By Jamal M Ba-Amer
SAMIR Deputy General Manager of Development
1
The International Context

Several African countries have:




Emergent economies
Low level of market liberalization
Business environment sufficiently
attractive for private investments
World Bank promotes liberalization and
transparency as pillars for development
2
The Industry Context


Lead phase out is finally on the agenda
Globalisation of car manufacturing will
eventually bring clean fuels in Africa


Difficult for small refineries to remain
financially viable in liberalized markets


Already happening in Morocco
Below 50,000 B/D it is difficult to justify even
small investment in clean fuels projects
Some countries have privatised refineries,
other are in the process of doing it
3
Africa is a very low weight player
Refining Capacity
Products Demand
25
Million B/D
20
4% of world capacity
3% of world demand
15
10
5
0
Far East &
Oceania
USA &
Canada
Europe
Latin
America
4
FSU
Middle
East
Africa
Does every country need a refinery?
Current Oil Products Demand By Country
Thousand B/D
800
600
400
200
Morocco is the largest net
‘Energy importer’ in Africa
Egypt
Algeria
Libya
Nigeria
Size to be internationally competitive
Morocco
0
• Security of supply is better provided by domestic refineries if
demand is sufficient, but…
•… most countries do not have sufficient oil demand to justify
having an internationally competitive refinery
5
Energy-wise, there are several Africas…


Oil rich North Africa trades with the
Mediterranean and is almost isolated
from Sub-Saharan Africa
In Sub-Saharan Africa:



West Africa is oil-rich but little developed
East Africa is oil-poor and little developed
South Africa is the most developed
economy
6
North-Africa Refining Capacity
100
Export Refineries
Crude Capacity, B/D
Crude Capacity, kB/D
300
FCC Equivalent, %
80
250
Competitive FOB Refinery
200
150
100
MOH
60
40
Competitive CIF Refinery
SK
20
50
0
FCC Equivalent, % of Crude Capacity
350
0
• 243,000 B/D of capacity is at refineries smaller than 60,000 B/D
• The 6 largest refineries are all simple hydroskimmers
• Viability of the industry is a strategic issue mainly for Morocco
7
East-Africa Refining Capacity
100
Mombasa
Crude Capacity, B/D
FCC Equivalent, %
80
60
40
Karthoum-Upgraded to
enable processing of
domestic crude
80
60
40
20
20
0
0
FCC Equivalent, % of Crude Capacity
Crude Capacity, kB/D
100
• 9 refineries out of 11 may find it difficult to compete in a liberalized
market
• The remaining two are simple hydroskimmers
8
South-Africa Refining Capacity
100
180
Crude Capacity, B/D
160
FCC Equivalent, %
80
140
120
60
100
80
40
60
40
20
20
0
0
• Size and complexity are comparable to Western refineries
• Superior economy of scale would justify further investment
• Best positioned to be key regional suppliers in a liberalized market
9
FCC Equivalent, % of Crude Capacity
Crude Capacity, kB/D
200
West-Africa Refining Capacity
Crude Capacity, kB/D
180
100
Nigerian
Refineries
Crude Capacity, B/D
FCC Equivalent, %
160
80
140
120
60
Abidjan
100
80
40
60
40
20
20
0
FCC Equivalent, % of Crude Capacity
200
0
• Three Nigerian refineries and the Abidjan refinery have size and
configuration to be competitive. Nigeria is key to the region…
•….But the historical performance of the Nigerian refineries has not
been satisfactory.
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How much capacity is at refineries
with a competitive size?
North Africa
1377 kB/D
7% FCC
East Africa
140 kB/D
0% FCC
South Africa
474 kB/D
31% FCC
West Africa
460 kB/D
14% FCC
• In Sub Saharan Africa only 1.5 million B/D has competitive size (less
than any of the “Big-Four” EU countries taken individually)
• Size is not everything. Significant effort (capital and know-how)
required to make capacity operable and profitable
11
Does this capacity meet oil demand?
North Africa
800
Existing Crude Capacity
At Competitively Sized Refineries
Current Oil Products Demand
Thousand B/D
700
600
500
400
300
200
100
0
Egypt
Libya
Tunisia
Algeria
Morocco
• Morocco has the least oil production and needs to maintain competitive
its only internationally-sized refinery
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What about Sub-Saharan Africa?
800
Existing Crude Capacity
Thousand B/D
700
At Competitively Sized Refineries
600
Current Oil Products Demand
500
400
300
200
100
0
East Africa
West Africa
South Africa
• West Africa would be served by a revival of the Nigerian refineries.
Otherwise the region will remain a large importer of products.
• The South African industry has surplus to serve East Africa
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Conclusions – North Africa


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North Africa is oil rich and has excess refining
capacity
Refinery complexity is generally low
Some refineries may not be viable in liberalized
markets


but this does not generally pose a strategic problem
Morocco is a special case

little crude production. The country must rely on a
‘Western-like’ refining industry
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Conclusions – Sub Saharan Africa

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Most countries do not have an internationally
competitive refining industry
Capacity at competitively sized refinery would be
sufficient, but performance has not been satisfactory
Key to the region is the successful privatization of the
Nigerian refineries
East Africa lacks competitive capacity
South Africa has the most competitive industry. Well
positioned to be a strategic supplier for others
Most countries will need to focus on secure product
imports, rather than supporting a domestic refinery
15
The Refining industry in Morocco

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Morocco has firm commitments towards liberalization
Adoption of Clean Fuels specifications (similar to EU)
There are two refineries, of which Mohammedia has
an internationally competitive size
Samir is working at an important upgrading project
for the Mohammedia refinery
The project would give Morocco the only
internationally competitive refining industry in the
continent outside of South Africa and crude producing
countries
16
SAMIR Upgrade Project Configuration
Fuel gas
AMINE
GPL
Naphtha
Essence légère
Fuel gas
Essence lourde
REFORMING 1
Unité H2
68
Reformat
REFORMING 2
1
230
810
430
KERO MEROX
2
Jet/Kero
KERO HDS
3
420
Sulfure Unit
GASOIL HDS
100
GASOIL
2500
3925
H2
1400
VIS BREAKER
DSV
1700
HYDRO
CRACKER
Fuel
gas
Naphtha
Naphtha
Gas oïl
Residue
FUEL OIL
2600
DSV
DISTILLATION
H2 riche gas
8250
C4
LPG
ESSENCES
NAPHTA+GAZ
Gas oïl
SWS
150
561
Huiles de 130
base
COMPLEXE HUILES
Bitumes
Demin Water
1410
200M3/h
207
Nouvelles unités
en Kt/A
Thank you for your kind
Attention
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