Ethiopian oil marketer says Africa needs to refine its oil
Addis Ababa, 19 April 2014 (WIC) - Ethiopia's leading private oil marketer plans to expand into neighbouring east African economies and is interested in part financing a refinery after commercial discoveries in the region, according to the Africa Report.
Tadesse Tilahun, CEO of National Oil Ethiopia, said untapped crude deposits in Kenya and Uganda handed governments and investors the opportunity to construct a refinery able to compete with cheap imports from India, the Gulf and beyond.
It would be in our own interest, for all countries in this area, to have a common refinery
Doing so would help African countries extract more value from their resources and cut their import bills, Tadesse said.
"Africa's demand for refined products is growing hugely because of its economic growth. The crude findings are also increasing. That is the opportunity," Tadesse said in Addis Ababa as part of the Reuters Africa Summit.
"We want to (build) a refinery. We have already discussed this in principle with our shareholders, who are very much committed."
National Oil's (NOC) shareholders include Saudi billionaire Mohammed Hussein Al Amoudi, whose investment portfolio in construction, gold, hotels and energy has helped amass an estimated fortune of over $15 billion, according to Forbes.
Tadesse said other private and public investors would need to come on board.
Eastern Uganda has become the latest frontier in the global hydrocarbon hunt after gas finds off Tanzania and Mozambique and oil discoveries in Uganda and Kenya.
Even so, Sub-Saharan Africa faces headwinds supplying more of its own refined petroleum products.
Regional cooperation and funding for oil-related infrastructure are proving slow, while foreign oil refiners and traders are flooding the $80 billion market with imports.
Existing pipelines also tended to run to the coast, Tadesse said, either for the export of crude or the import of refined products from small-scale refineries found near ports.
"That has to change," Tadesse said. "Refineries are now needed inland so that Africa can supply itself."
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