The Organisation of the Petroleum Exporting Countries said on Tuesday that Africa’s refining outlook had improved, with Dangote project accounting for half of the 1.2 million barrels per day of new capacity expected by 2026.
The oil cartel said this in its 2021 OPEC World Oil Outlook, which was launched in Vienna, Austria.
It said, “Africa currently exports over a third of its extracted fuels; however, in the long-term, due to the projected rise in the continent’s population and the increased desire for urbanisation, it will be necessary for the continent to consume these fuels locally, and in a manner that meets global emissions standards.
“There is also a need for investments in the downstream sector, particularly refining, either by upgrading existing facilities or through building new ones.”
According to the report, one of the ways to finance these projects could be for governments to seek financial partnerships with the private sector for the expansion of their refining and petrochemical industries.
It said, “Africa’s medium-term outlook looks more optimistic relative to the WOO 2020, with 1.2 mb/d of new capacity expected by 2026. Half of this is accounted for by the 650 tb/d Dangote project in Nigeria, which is likely to come on line in 2022. In addition, there are several smaller projects in West Africa, mostly located in Nigeria, Angola and Ghana.
“These projects include a number of pre-fabricated modular facilities. Once commissioned, these projects will help to reduce product imports to Nigeria and West Africa and will, in turn, increase the use of local crude. In North Africa, refinery capacity expansions are likely in Algeria and Egypt.”
OPEC noted that the African energy sector had made progress in recent years regarding energy policies that would enhance the continent’s socioeconomic development.