Oil Marketer Says Africa Needs to Refine its Oil

Posted by Michelle Howard
Monday, April 14, 2014

Ethiopia's leading private oil marketer plans to expand into neighboring east African economies and is interested in part financing a refinery after commercial discoveries in the region.
 


Tadesse Tilahun, CEO of National Oil Ethiopia, said untapped crude deposits in Kenya and Uganda handed governments and investors the opportunity to construct a refinery able to compete with cheap imports from India, the Gulf and beyond.



Doing so would help African countries extract more value from their resources and cut their import bills, Tadesse said.



"Africa's demand for refined products is growing hugely because of its economic growth. The crude findings are also increasing. That is the opportunity," Tadesse said in Addis Ababa as part of the Reuters Africa Summit.



"We want to (build) a refinery. We have already discussed this in principle with our shareholders, who are very much committed."
 


National Oil's (NOC) shareholders include Saudi billionaire Mohammed Hussein Al Amoudi, whose investment portfolio in construction, gold, hotels and energy has helped amass an estimated fortune of over $15 billion, according to Forbes.



Tadesse said other private and public investors would need to come on board.
 


Eastern Uganda has become the latest frontier in the global hydrocarbon hunt after gas finds off Tanzania and Mozambique and oil discoveries in Uganda and Kenya.



Even so, Sub-Saharan Africa faces headwinds supplying more of its own refined petroleum products. Regional cooperation and funding for oil-related infrastructure are proving slow, while foreign oil refiners and traders are flooding the $80 billion market with imports.



Existing pipelines also tended to run to the coast, Tadesse said, either for the export of crude or the import of refined products from small-scale refineries found near ports.


 


"That has to change," Tadesse said. "Refineries are now needed inland so that Africa can supply itself."
 


Constraints
Tadesse acknowledged the price tag was problematic for many African countries. Oil production in Uganda has been delayed in part due to a row between the government and investors over the size - and thus cost - of a refinery in the country.



"It would be in our own interest, for all countries in this area, to have a common refinery, a joint facility, where we can take our own product," Tadesse said.



Kenya plans - but has made little progress towards - a new $2.8 billion refinery on its northern coast. Industry experts say Ugandan and Kenyan oil exports could reach 500,000 barrels per day - oil Tadesse would rather see stay in the region.
 


Founded in 2004, NOC now claims a 35 percent share of a market tightly controlled by the Ethiopian state. So too are other key sectors including banking, retail and telecoms, which the government says need shielding from foreign investors while the economy diversifies away from its agricultural base.



Tadesse said NOC had secured a license for fuel stations in neighbouring Djibouti and targeted expanding its downstream operations into Kenya within five years. Plans to enter South Sudan have been shelved due to the four-month conflict there.



"We want to be a regional player," Tadesse said.



Oil consumption has doubled in 10 years in Ethiopia, one of Sub-Saharan Africa's fastest-growing economies and now the region's fifth-largest after leap-frogging Kenya.
 


Demand for oil in Ethiopia is seen tripling by 2025, indicative of the economic transformation under way in Africa's second-most populous nation which is still better known abroad for the famine of 1984 and communist-era purges.



But the pace of NOC's expansion at home hinges on the government relaxing its grip on the industry.



Tadesse said the government imported all fuel products and set the market price, allowing fuel stations a margin of just 4 Ethiopian cents - roughly 0.2 U.S. cents - per litre. Land rights issues also hindered growth.
 


"In no way can that be attractive to investors," he said.

(By Aaron Maasho; Writing by Richard Lough; Editing by Susan Fenton and David Evans)

Maritime Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Ensco Announces Cash Tender Offer

Ensco plc announced today that it has commenced a cash tender offer to purchase any and all of its outstanding 3.25% Senior Notes due 2016 (CUSIP No. 29358QAB5).

Seadrill: Rig Rates Have Not Bottomed

The market for oil and gas drilling rigs continues to deteriorate as oil companies cut back on investments, Seadrill Chief Financial Officer Rune Magnus Lundetrae

‘Blue Queen’ on First Mission

The platform supply vessel 'Blue Queen', an ULSTEIN PX121 design, was named at Ulstein Verft on Friday 27 February. The ship will be working in the spot market.

Ports

Egypt on a War Footing to Expand Suez Canal

The Suez Canal Authority is in a race to quickly expand the vital waterway for two-way traffic by August 2015, says an Associate Press report. Workers dig round the clock on Suez Canal expansion,

Vancouver Port Fire Leads To Evacuation

A chemical fire at a Vancouver container terminal led to a partial evacuation of Canada’s largest port for several hours Wednesday afternoon, as a cloud of white

Indian Port Workers to Launch Indefinite Strike

Port and dock workers in India are planning to go on an indefinite strike starting March 16th – they are protesting the government’s move to corporatize major ports.

Energy

Ensco Announces Cash Tender Offer

Ensco plc announced today that it has commenced a cash tender offer to purchase any and all of its outstanding 3.25% Senior Notes due 2016 (CUSIP No. 29358QAB5).

BG Group's Australian Project Helping to Double LNG Supplies

A smooth start to operations at BG Group's Australian project in Queensland is expected to help the British company to roughly double its liquefied natural gas (LNG) supplies in 2015/16,

Seadrill: Rig Rates Have Not Bottomed

The market for oil and gas drilling rigs continues to deteriorate as oil companies cut back on investments, Seadrill Chief Financial Officer Rune Magnus Lundetrae

News

Gofree Available on B&G® Zeus2 & Zeus2 Glass Helm

B&G® announced today the availability of the newly launched GoFreeTM wireless, cloud-enabled features on its full line of Zeus2 and Zeus2 Glass Helm multifunction displays.

USCG Monitors Cargo Vessel Near Welch island Ore.

The Coast Guard is monitoring a vessel that lost propulsion and briefly grounded in the vicinity of Welch Island, Wednesday. The crew of the 738-foot bulk

GOST® to Unveil New Products at MSE Conference

GOST® (Global Ocean Security Technologies),announced today that it will highlight its newest commercial maritime products at the 2015 Maritime Security East conference in Jacksonville,

 
 
Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1734 sec (6 req/sec)