• Thursday, February 29, 2024
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Refinery to keep running after strategic review

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tema-oil-refinerySenegal will keep its one, ageing oil refinery in operation after the gov¬ernment completed a strategic review to determine its future.The study commissioned by the government considered closing the 25,000 barrel per day SAR plant and converting it into an import and storage terminal.

Phillips Oduoza, the chief executive of United Bank for Africa (UBA) said SAR, owned by state oil company Petrosen (46 percent), Total (20 percent) and the Saudi Binladin Group (34 percent), has secured a loan of $350 million to finance 2014 crude imports.

While demand for fuel in Africa is booming, refiners such as SAR have been struggling to compete as ship¬ments from foreign refiners and traders have been flood¬ing the $80 billion market.

The Senegal plant, more than 50 years old, is expensive to run because there is no local source of crude oil, and most is imported from Nigeria. Even with the Senegal plant open, its capacity is sufficient at best to supply less than half of Senegal’s market of 1.8 million tonnes a year.

Meanwhile, its debt after rescheduling amounted to 31 billion CFA francs ($63.7 million) at the end of 2012.

The plant will close for major maintenance work in April, sources said, temporarily boosting imports further. But it will need to spend more for Senegal to avoid losing ground to Cote d’Ivoire as a regional supply hub. Ivory Coast’s SIR refinery is almost three times the size of the SAR facility and has ramped up output over the past two years after operating well below capacity during a decade of political turmoil that ended in 2011.

SAR needed to invest to expand storage and pipelines to improve supplies to neighbouring, landlocked countries. The country has also already built a fuel pipeline from coastal Abidjan to inland Yamoussoukro and plans to extend it to Burkina Faso, which currently gets fuel by truck from Senegal.