Market Trends of Africa Oil Refining Industry
This section covers the major market trends shaping the Africa Oil Refining Market according to our research experts:
Egypt Expected to Dominate the Market
Egypt is the biggest oil refiner in Africa, with 12 refineries and more than ten refining companies. The major refineries include Middle-East Oil Refinery (MIDOR) and the Cairo Oil Refining Company (CORC). The country's refining sector has flourished a lot in the last two decades due to the government's efforts to develop the sector and private investments.
The refinery throughput of the country in 2021 was around 591 thousand barrels per day. The output is still less compared to the constantly increasing fuel demand. Thus, the Egyptian government has planned many greenfield and brownfield refining projects to accelerate the domestic refining capacity in the coming years.
For example, in August 2022, the ATB Riva Calzoni company completed the cargo delivery for the upgradation of Assuit Refinery, the project currently under development. The upgradation project, with the EPC contractor as TechnipFMC, includes the construction of a hydrocracking complex, vacuum distillation unit, and coker unit in the refinery for the transformation of low-value petroleum products into around 2.8 million tons of cleaner products, such as Euro V Diesel.
In addition, there is an ongoing project for constructing a gas oil complex to convert low-value fuel oil into high-value distillates, such as high-value gas oil, LPG, and many other products with high quantities. The USD 2.9 billion project is expected to be completed in 2023.
Such developments are expected to help Egypt acquire the highest share in the oil refining sector in Africa.
Growing Investments in Developing Countries Expected to Drive the Market
The region has witnessed a noticeable growth in the investments made in the oil and gas sector of developing countries, such as Nigeria, Algeria, Angola, etc. For instance, the Nigerian oil and gas refining sector is expected to get accelerated by investments by independent energy companies due to the government's plans to have a majority shareholding of private companies, even in state-owned refineries, in the coming years. They hinted at attracting new investments.
The country's refining sector witnessed an extreme decline recently due to productivity issues caused by poor infrastructure. The four public-sector refineries can collectively process 445,000 barrels of crude oil daily, but they ran at around 2.5% combined average utilization rate in 2019. This caused the oil refinery throughput of the country to slide down to 3 thousand barrels per day in 2021. These issues demanded new investments to help the refining sector. There were about 23 valid licenses pending approval as new refinery proposals as of 2021.
For example, a new ammonia and methanol production plant is being developed in Nigeria by Brass Fertilizer & Petrochemical Company, a project with a capacity of 1.70 million tonnes per annum (mtpa). The new plant is expected to start operations by 2025.
Furthermore, the other most awaited refinery is the new refining and petrochemicals complex constructed by BUA group in the Nigerian state of Akwa Ibom. The complex is expected to add a refining capacity of 200,000 barrels per day once operational in 2024. The products to be manufactured include high-quality gasoline, diesel, and jet fuel, meeting the Euro-V specifications.
Due to such interest from private companies in the Nigerian refining sector, the African oil refining market is expected to grow in the coming years.
