The Changing Face of the Sub-Saharan African Downstream

Transcription

1 The Changing Face of the Sub-Saharan African Downstream CITAC Africa LLP The Downstream African Energy Specialist Gary Still, Executive Director 1 March 2011

2 Contents I. CITAC Who are we? II. Divestment by the majors: context and trends III. 2011: Why are traders moving further downstream? IV. Summary and conclusions

3 I. CITAC Who are we?

4 Who are we? UK-based, independent consultancy founded in 1998 to focus on the downstream African energy sector Extensive experience in projects relating to refining, storage, trading and distribution of petroleum products in English- and French-speaking Africa Well known for commercial training courses in London and Africa Retained consultant to the African Refiners Association

5 What is the ARA? African Refiners Association 5 years old An NGO that has the aim of helping African refiners, importers and marketers manage the challenges of the future 20 of the 25 refining companies in Africa are paying members - Includes 37 of Africa s 42 operating refineries 28 African companies are Associate Members (AMs) - AMs are importers, terminal operators, shippers, regulators, major marketers Major sponsors: NNPC, Sonangol, Total, BNP Paribas, PetroSA and SIR

6 Some clients:

7 II. Divestment by the majors: context and trends

8 Refinery divestment Began in late 1980 s s : the second big wave 2009: KPRL/Indeni Latest news: Sapref? (Chevref?) Only Total still has strong presence (WAF)

9 Why the decline in private ownership? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Gov ernment Majors Non-majors

10 Marketing divestment Began in late 1980 s s Big divestment drive in 2008 Followed by a second in Local players have filled the void: - Engen Epic Oilibya and KenolKobil moving south... Only Total committed to staying

11 Oilibya and Engen expansion

12 Total African footprint Outside Europe, we are focusing on fast-growing markets such as Africa, where we are a major marketer with activities in more than 40 countries, the Mediterranean basin and Asia

13 Why are the majors divesting? Desire to concentrate on fewer, larger markets ROI - answerable to shareholders HSE Regulation (e.g. Benin) Politics E&P more profitable

14 Shell: a case in point Africa: profitable growth and sustainable leadership; divest where not possible

15 ExxonMobil Mobil Africa operations do not meet Exxon environmental and ethical standards

16 III. 2011: Why are traders moving further downstream?

17 2011: Vitol/Helios land, PUMA expands? On 19 February 2011, Vitol/Helios announced their purchase of Shell s downstream assets in 14 countries A marked move away from core business Puma has agreed to buy BP s operations in in 5 countries. Already present in 7 others. Rising local companies also vied for these assets (KenolKobil, Oilibya)

18 Why are traders moving downstream? Offshore margins shrinking Integrated trading operation means guaranteed outlet for product Traders need volume Shell deal: all or nothing Real estate? Re-sale? SSA product imports destined for huge growth

19 Africa s share of world oil demand (2010) 52.5% Africa Other non- OECD 43.8% 3.6% OECD Source: CITAC/IEA

20 Oil Demand Growth Outlook 7% 6% 5% 4% 3% 2% SSA World 1% 0% -1% -2%

21 IV. Summary and conclusions

22 Summary/conclusions Trading companies see opportunity for more integrated operations African economic/demand outlook strong; refinery outlook uncertain Local players continue to expand via acquisitions and organic growth Traditional majors returning to core E&P activity?

23 Thank you for your attention! CITAC Africa LLP The Downstream African Energy Specialist CITAC Africa LLP Belgrave House 76 Buckingham Palace Road London SW1W 9TQ UK Tel: +44 (0)