Unlocking opportunities in Sub-Saharan Africa
Published by Callum O'Reilly,
Senior Editor
Hydrocarbon Engineering,
Sub-Saharan Africa is in a bind when it comes to fuel. Since 2020, a wave of refinery closures in Zambia, South Africa and Cameroon related to COVID-19 dramatically reduced the region’s ability to supply an estimated 2 million bpd of diesel, gasoline and jet fuel. Since then, complications surrounding the Ukraine war have impacted cost, as well as the ability to import fuels, including 700 000 bpd of diesel.
However, Sub-Saharan Africa is also home to prolific natural resources. Over 140 million years ago, when the ancient supercontinent of Gondwana separated, Africa and South America split along the mid-Atlantic ridge. In South America, exploration of the sedimentary and stratigraphic structures that were created in Guyana’s offshore basins has led to a new major oil exporter. Many of these geological features are mirrored on Africa’s Atlantic coast. On paper, the region represents immense opportunities, but many jurisdictions are plagued by civil unrest, corruption and mismanagement that deter investment. Still, progress is being made.
Nigeria
The imminent commissioning of Nigeria’s greenfield Dangote refinery appears to be a beacon in the gloom. Construction of the US$20 billion facility (and at 650 000 bpd, it is the largest single train refinery in the world), has been completed. When it comes onstream, it is expected to displace 300 000 bpd of costly gasoline imports, and generate export opportunities to international markets.
There is some concern as to when it will reach full production, however. While preliminary testing has already begun, the plant is not expected to reach full capacity until 2024. A significant change in the country’s output is also adding a new wrinkle with regards to reliable feedstock supplies. Crude production has dropped from 2 million bpd when the project was conceived a decade ago, to slightly over 1.3 million bpd today.
Part of plunging production is due to larceny; the theft of crude from pipelines remains a significant problem. In October 2022, Nigerian authorities uncovered a bootleg crude pipeline network in the fractious Niger Delta region that was being used to siphon off crude...
This article was originally published in the July 2023 issue of Hydrocarbon Engineering magazine. To read the full article, sign in or register for a free subscription.
Written by Gordon Cope, Contributing Editor.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/11072023/unlocking-opportunities-in-sub-saharan-africa/
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