The constantly evolving and dynamic African downstream oil industry holds mass potential for the continent, according to African energy specialist CITAC Africa executive director Gary Still.

Speaking at the annual African Refiners & Distributors Association (ARA) conference, in Cape Town on the 13th of March 2018, Still predicted that while energy would be increasingly retrieved from different sources such as gas and renewables, the oil share is forecast to remain unchanged in percentage terms.

There have been many developments in refining capacity in Africa.  Some of these developments include upgraded units in several refineries in Egypt and the expansion of three refineries in Algeria, as well as Dangote Group’s investment in Nigeria. Dangote is building the world’s largest greenfield refinery, which will churn out 600 000 bbl/d of oil. West Africa offers a particularly complex downstream environment. Still says the region has “a patchwork of different specs, with seven permissible levels of sulphur.”

Despite this, however, private investment in downstream oil has not been as strong as hoped. “We fear that private equity does not have enough confidence in bankrolling refinery projects. That’s not only in Africa . . . It’s global.” Africa, however, has been quite resilient in the face of this. “The momentum is there. There are survivors in niche areas with the right political environment.”

According to Still, aromatics, polycyclic aromatic hydrocarbons and olefins could be the next targets following benzene. Furthermore, African countries has shown an increased interest in liquefied petroleum gas, with demand likely to double within the next ten years in sub-Saharan Africa.

Challenges facing the African downstream oil industry include the need for extra storage, keeping track of and retrieving gas cylinders, little harmonization amongst African countries, and different pricing and product import arrangements.

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