Petroleum Africa
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Friday, October 5, 2012
The 11th edition of ENI’s World Oil and Gas report was released recently. One thing that stood out in the report was Africa’s refining sector. While the continent’s need for refined products has grown exponentially over the years, African countries have not increased their refining capacity.
In 1995 the continent had 45 refineries; as of the end of 2011 that number had only increased by one and the utilization of these refineries’ installed capacity has fallen over the years. Currently Africa’s utilization of its installed refining capacity sits at around 67%.
The drop in utilization can be attributed to, in some cases, the lack of maintenance of some refineries. For example Nigeria’s refineries have become decrepit over the years and have seen their capacity utilization drop 24% since 1995 due to maintenance issue and the mismanagement of funds to make repairs.
While a host of plans have been initiated to increase installed capacity in various countries through the construction of new refineries, these have not taken off for a myriad of reasons. A few reasons behind the lack of progress include lack of financing, security issues, and in the case of Nigeria lack of clarification of the PIB. In the case of Angola, financing is holding up the construction of its second refinery, Lobito.
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