Africa’s demand for energy, which is far higher than that of other regions in the world, is expected to be very positive for the African downstream oil industry, which has seen a $30-billion investment push in logistics, distribution, storage terminals, import facilities and retail marketing in recent years.
These developments were mentioned during the fourteenth annual conference of the African Refiners and Distributors Association (ARA) held in Cape Town this week.
Speakers pointed out that Africa’s demand for gasoline and diesel is expected to increase by about 4% a year. This is far above the projected overall global demand. According to BP’s Global Energy Outlook, global demand for energy is projected to increase at 1.3% a year – more slowly than before as a result of increases in energy efficiency.
Gas production in Africa is expected to increase by 2% a year, with liquefied natural gas (LNG) production projected to increase by 1% a year. “Our expectation is that the onset of LNG production will drive downstream growth,” said Standard Bank head of oil and gas Paul Eardly-Taylor, who was also bullish about retail developments in Africa.
Meanwhile, the refining sector has faced many challenges over the past few years, but there are green shoots of investment, particularly the huge Dangote refinery, in Nigeria, which is progressing fast, with refining units soon to be installed.
In Egypt, Africa’s largest refiner, EGPC outlined a massive investment programme for its eight refineries in addition to the imminent start-up of the privately financed $4.5-billion project at the Egyptian Refining Company. Algeria has also been investing heavily in upgrading its refining system, while the Uganda refinery is fast progressing.
African Development Bank chief natural resources officer Rose Mwebaza highlighted the importance of developing skills in the new oil sector developing in Uganda. She said some 150 000 new jobs are set to be created in Uganda, where 77% of the population are under the age of 30. She said a lot of training was required locally in Uganda. Mwebaza also called for mutual transferability of skills from countries like Nigeria, South Africa and Ghana.
During the conference, Côte d’Ivoire Energy Minister Abdourahmane Cissé presented the €600-million new finance package for the SIR refinery in Abidjan and announced the planning for upgrades to meet the ARA’s AFRI-4 specifications.
Human capital and corporate social responsibility were also high on the agenda at the ARA conference. Many speakers stressed the need to encourage the recruitment of more women into the growing African energy sector.
Anibor Kragha of Nigeria replaced outgoing ARA president Hilaire Kaboré of Burkina Faso to become the ARA president for 2019/20. Kragha said he was “looking forward to strengthening the ARA to assist its members, both refiners and distributors, to respond to the rapid growth in African demand”.