Researcher at the Africa Center of the French Institute of International Relations, Benjamin Augé does not believe that the continent can become a major player in fuel production.
Why is there such a shortage of refineries in Africa?
There are refineries, but generally they are small and only supply their local market. Why don’t we build more? Quite simply because there are countries like Saudi Arabia or India which have built very large refineries, [produisant] up to 900,000 barrels per day, therefore very profitable, which allows them to “water” an entire part of Asia and even Africa, particularly on the coast of the Indian Ocean. So no one is going to invest in small, unprofitable refineries in Africa, just at the request of presidents.
This is exactly why Uganda cannot finance its refinery [attendue pour 2025, elle prévoit une capacité de 60 000 barils par jour et utiliserait une partie du pétrole ougandais ; TotalEnergies est le principal opérateur]. Since the discoveries [de gisement] in 2006, President Yoweri Museveni put pressure on it, but, seventeen years later, he is losing this standoff with the oil companies. Because the profitability is not there, and importing refined oil from the Gulf or India will always be much cheaper.
Didn’t Chad and Niger both open a refinery in 2011?
Yes, and moreover Museveni adopts exactly the same approach as that, at the time, of the Nigerian president Mamadou Tandja: the one who exploits the oil builds a refinery. As in Chad, these projects are political. The difference with Uganda is that the Chinese (CNPC is the operator in these two countries) have been the main operators of oil in recent years. China operates through state companies which see refineries as an asset within the framework of a much broader cooperation: they can lose money there to gain money in a whole bunch of other sectors such as roads, electricity, mines…
With 650,000 barrels per day, the new Dangote refinery is therefore an exception. Will she be able to change the situation in Nigeria?
Many people thought that the majority of Nigeria’s gasoline would now come from this facility, which is easily the largest refinery in Africa and one of the largest in the world.
Of course, Nigeria sees this as a local success, and Dangote played the game by making people believe that it was an industrial project with a Nigerian vocation. He will probably sell some locally to have peace. But, in reality, Dangote has exactly the same strategy as India, which is his model: he has built a world-sized structure, with a global vocation, which aims to be very profitable. Its objective is not necessarily local supply, or even Africa, but to sell its essence to all those who want to buy it, whether they are in Latin America, France, South Africa or the Nigeria. Likewise, it is free to buy Nigerian crude or not. And he will probably choose the cheapest oil possible.
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