Page 13 - Downstream Monitor - MEA Week 32

DMEA
neWs In bRIef
DMEA
RefInInG
Despite proposals, no
approval yet for Namibia oil
refinery
e Ministry of Mines and Energy has con rmed that although it has received several proposals for the establishment on an oil re nery, it has not yet granted any approval as it awaits feedback on crucial documentation such as feasibility and environmental studies.
It is believed that a local oil re nery would provide much-needed relief from rising fuel prices; however this relief could be quite minimal.
“ e Ministry of Mines and Energy has been approached by many companies that expressed their intentions to invest in oil re ning business ventures in Namibia and have submitted their proposals to the ministry,” con rmed executive director in the Ministry of Mines and Energy, Simeon Negumbo.
“No approval has been granted yet to
any particular company to proceed with the construction of an oil re nery. Reason being, before the ministry can provide its approval for the project to go ahead, companies themselves have an obligation to conduct feasibility studies and establish if venturing in oil re ning in Namibia is a feasible business to undertake. None of the intended investors have yet submitted such a feasibility study to the ministry,” said Negumbo.
e executive director further explained that having a local re nery would allow the country to not completely rely on imports of petroleum products, thereby providing Namibia with some security of petroleum products supply.
“However, a local re nery alone will
not shield us from geopolitical upsets as
the country is not yet a crude oil producer. e impact to the oil prices is that a local re nery, if run e ciently, could o er price relief to consumers attributed to the bene ts of increased production volumes, however it might not be that signi cant,” Negumbo added.
e handful of companies that have expressed interest in constructing a local oil re nery have estimated the initial capital injection from around N$4 billion (for the rst phase) up to an astronomical N$120 billion, which could produce anywhere between 25 000 barrels of re ned oil per
day up to 100 000 barrels per day. However, Negumbo emphasised that the investment value di ers depending on the speci cations and technology used in the re ning process.
Local media recently reported that Clasox Petroleum, a Namibian registered company, has applied for 10 hectares of land just
outside Walvis Bay for the construction of
an oil re nery. Additionally, a er the recent Economic Growth Summit in Windhoek, Comsar, which is owned by Russian billionaire, Rashid Sardarov, expressed interest in establishing a N$21 billion oil re nery in the country.
According to 2018 import statistics, Namibia spent more than N$11.4 billion on the import of oil, gas and re ned fuel products.
neW eRA
Nigeria’s Dangote oil
refinery delayed until end of
2020
Africa’s largest oil re nery will not be nished until the end of 2020 due to problems
importing steel and other equipment, executives at dangote, which is building the facility in the Nigerian commercial hub of Lagos, told Reuters.
Nigeria, Africa’s most populous nation, imports virtually all its fuel due to sclerotic and underutilised re neries, and even the state oil company is looking to the 650,000 barrel per day (bpd) dangote re nery to help address this.
Price caps force NNPC to import nearly all its gasoline at a signi cant cost and periodic fuel shortages are common.
despite the delays at the congested Apapa and Tin Can Island ports in Lagos, a dangote executive said the company could start using the re nery’s tank farms as a depot to warm up operations.
“We will be able to complete the (re nery) project by the end of next year - mechanical completion,” said dangote Group Executive director devakumar Edwin, who oversees the project.
e company expects fuel production within two months of completion of the re nery, which could transform Africa’s biggest crude producer from a fuel importer into a net exporter, upending global trade patterns.
Billionaire Aliko dangote, who built his fortune on cement, rst announced a smaller re nery in 2013, to be nished in 2016. dangote then moved the site to Lekki, in Lagos, upgraded the size and said production would start in early 2020.
Industry sources told Reuters last year that fuel output was unlikely before 2022.
Edwin also said during an interview at
his o ce in Lagos that dangote is setting up its own trading desk, with a senior team of three people and a sta of roughly 30 who will monitor international commodity prices.
“We are setting up a complete trading desk here with us. In the next three months the full
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