Petroleum Africa
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Thursday, July 10, 2014
Planned refinery construction and expansion projects could see the sector grow capital expenditures to over $300 billion by 2020; however, Africa will actually see an increase in production costs.
According to GlobalData, the global refining capital expenditure (CAPEX) is forecast to reach approximately $333 billion between 2014 and 2020, representing an annual average of almost $48 billion and 1.6 Mmbd. However, Africa will experience significantly higher production costs for its own new grass-root projects planned in Nigeria, Angola, and Gabon. This is a result of having a lack of skilled workforces and minimal infrastructure capacity – so most, if not all, of the equipment, materials, and labor will need to be imported.
GlobalData’s Managing Analyst covering Downstream Oil & Gas, said: “Further costs for this region will also result from the financial and geopolitical risks associated with the construction of onshore refining facilities in African countries, such as Algeria and Uganda. These factors will push Africa’s refining CAPEX to almost $28 billion by the end of 2020.”
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