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Africa takes centre stage

Published by , Senior Editor
Hydrocarbon Engineering,


Africa is the world’s second largest and second most populous continent, after Asia. With more than 16% of the global population – and the youngest population among the continents – Africa has the potential to take a much larger share of the global economy and trade, given its vast natural and human resources. Oil and gas production from the continent accounts for 8% of global supply, according to Rystad Energy’s latest data, putting it close to Asia’s 10%.

In terms of oil demand, however, Africa’s demand is one-seventh of the size of Asia’s. The lack of economic development and poor investment in oil and gas infrastructure has resulted in Africa being a crude exporting and product importing continent.

The supply is dominated by four large producers: Nigeria, Algeria, Angola and Libya. Almost 70% of the continent’s crude production (between 5 – 7 million bpd) is exported to Asia/China and Europe. The demand side is led by Egypt, South Africa, Algeria and Nigeria.

Half of the demand is for road transport fuels – gasoline and diesel. Two-thirds of demand is currently met by product imports from the Middle East, Europe and Asia.

The downstream/refining sector is lackluster in Africa, with just 2% of global crude being refined on the continent.

This article will provide signals and signposts for trading and strategic horizons, covering key future developments in Africa’s oil sector – with an emphasis on crude, products and downstream refining.

Refining capacity

Low utilisation of refinery capacity, at a rate of between 60 – 65%, reflects the poor state of health of the continent’s refining and overall downstream sector. Nigeria’s Dangote refinery coming online will be a significant development for Africa. While crude production is expected to decline, increasing refining to meet growing demand is going to significantly bolster economic activity and development across the continent. Major shifts in crude and product trade flows can be expected in the years ahead. The COVID-19 pandemic may have dented the continent’s upstream and downstream sectors, but based on real-time data, Africa was not impacted to the extent that other regions were, and has recovered well. The road transport sector has experienced a full and speedy rebound, while the aviation sector has slowly recovered...


Written by Mukesh Sahdev, Rystad Energy.


This article was originally published in the July 2022 issue of Hydrocarbon Engineering. To read the full article, sign in here or register for a free subscription.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/18072022/africa-takes-centre-stage/

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Downstream news