African refining costs to soar in 2014

Africa will suffer significantly higher production costs for its own new grass-root refinery projects, planned in Nigeria, Angola and Gabon, according to GlobalData. These countries have a lack of highly skilled workforces and minimal infrastructure, meaning that most if not all equipment, materials and labour needs to be imported.

Carmine Rositano, GlobalData’s managing analyst covering downstream oil and gas, says, “Further costs for this region will also result from the financial and geopolitical risks associated with the construction of onshore refining facilities in African countries, such as Algeria and Uganda. These factors will push Africa’s refining capital expenditure to almost US$28-billion dollars  by the end of 2020.”

The global refining capital expenditure is forecast to reach about US333-billion dollars between 2014 and 2020, representing an annual average of almost USD48 billion dollars and 1,6-million barrels a  day.