AFRICA 60 f t l AFRICA – 60 years of petroleum supply supply

Mark Elliott, Chairman CITAC Africa Ltd

Geneva, May 2012

Contents:

1. 1950’s: WARP and the majors

2 1960’s: NOC’s refineries for all 2. 1960’s: NOC’s – refineries for all

3. 1970’s Phibro makes inroads, Stinnes in Nigeria3. 1970 s Phibro makes inroads, Stinnes in Nigeria

4. 1980’s: SIR exporter, ME refineries and new players

5. 1990’s: PH ref & Nigerian JV’s -Traders get stronger

6. 2000’s: Withdrawal of majors – Traders take over

1 1950’s: WARP and the MAJORS1. 1950’s: WARP and the MAJORS

1950’s “WARP” and the majors1950 s WARP and the majors

• WARP = West African Replenishment • WARP = West African Replenishment Programme run by Mobil and Shell

• Monthly requirements submitted to WARP by • Monthly requirements submitted to WARP by African marketers

• Alternate months- 30kt mixed cargo vessels• Alternate months- 30kt mixed cargo vessels• Shell out of Curacao refinery, Mobil from UK• First refineries built Durban 1954 Luanda 1958• First refineries built Durban 1954, Luanda 1958• South Africa (Durban) fed parts of South• East Africa deficit fed from BP Aden refinery• East Africa deficit fed from BP Aden refinery

Map of 1950’s African supplyMap of 1950 s African supply• Show arrows from Curacao and UK Thames• Arrows from Durban to Zim/Zam• Arrows from Yemen to East Africa

1950s Supply routes1950s Supply routes

fi i f2. 1960’s: NOC’s – refineries for all

1960’s – NOC’s and refineries for all1960 s NOC s and refineries for all

• Independence (Ghana 1958 ) led to demands for Independence (Ghana 1958…) led to demands for National Airlines, National Oil Companies and the like

• Refineries built in Kenya, Senegal, Cote d’Ivoire, Gabon, Tunisia. Morocco, Sudan, Eritrea etc

• 4 identical 20mb/d refineries built by ENI in Ghana, Zaire, Tanzania and ZambiaTanzania and Zambia

• Port Harcourt refinery built in Nigeria in 1962 by Shell/BP

• Imports stated being taken over by tenders issued by newly created NOC’s

• Zimbabwe refinery closed by sanctions

Map of Refinery construction in AfricaMap of Refinery construction in Africa• Map showing the 54 refineries– take data from page 7 of the Refining report (James)

i i3. 1970’s:Phibro makes inroads, Stinnes in NigeriaStinnes in Nigeria

1970’s – 1970’s:Phibro makes inroads, Stinnesi Ni iin Nigeria• NOC tenders for crude and products often won by Phibro

P t i k d B l d th Phib t M ll k • Patrick de Barros led the Phibro team - Many well known traders came from this team

• Marc Rich broke from Phibro and began to compete –• Marc Rich broke from Phibro and began to compete especially on Tunisian and Nigerian crudes (later Angolan)g )

• Petrobras then Stinnes hold Nigerian crude for product swap contract

• More refineries built (Algeria, Libya, Congo) - demand for small crude cargoes grows small crude cargoes grows

• South Africa takes over supply of the South• Algeria, Libya becomes a major exporters

Port limits increasingly constrain supply for traders Standard Africa port map from AR p34

N dhib Port SudanP t Nouadhibou

Dakar

Conakry

Nouakchott

BanjulBissau Djibouti

Assab

Berbera

PortoGrande

Massawa

Cap Lopez

Monrovia

Freetown

Malab

o

DoualaLimbe

BataMogadishu

M b

BananaPointe Noire

Ango Ango

Dar es SalaamLuanda

Nacala

Mombasa

30 000+ MT

Victoria

Beira

Walvis Bay

Maputo

Toamasina

30,000+ MT cargoes25,000 MT max cargoes

10,000 MT max cargoes

Port Louis

Cape Town

Durban

p

Saldanha Bay

Richards Bay

PortElizabethMossel

Bay

East London

Port limits increasingly constrain supply for traders Standard Africa port map from AR p34

Malab

o

i4. 1980’s: SIR exports, Mid East refineries and new playersrefineries and new players

1980’s – SIR exports, Mid East refineries and l new players

• 1982 SIR expansion and hydrocracker – surplus p y pproducts

• Gulf (Chevron) sign processing deal – small ( ) g p gcargo supply to WAF customers

• Refineries built in Kuwait, Jubail etc. New supply pp ysources to East Africa, Somalia, Ethiopia etc

• Refineries begin to close – Lome, Monrovia, Asabg• Chevron dominates WAF clean/fuel, processes in

SIR, SOGARA, SOZIR, Elf follows then Total• Sonara, Kaduna and PH refineries built• Marc Rich/Sonangol JVg

3 small Maps 1)Clean Supply to WAF (especially showing SIR and Sonara exports)2) Clean EAF supply ( from our old AR’s)3) Fuel imports/exports (see p 31 of AR)

GASOLINENWE/Med

GASOILNWE

AtlanticBasin

WCA Clean Product Supply Routes

0.5mn MT

Gabon

1.5mn MT

GASOLINE (13.8mn MT)( )

GASOIL (9.1mn MT)

GASOILIndia, Middle East

GASOLINEIndia

Routes for supply into Africa become establishedestablished

5 1990’s: Pt Harcourt refinery & 5. 1990 s: Pt Harcourt refinery & Nigerian JV’s – Traders get stronger

1990’s Port Harcourt, Nigerian JV’s – traders t tget stronger

• In 1988 PH refinery (180mb/d) had been built to y ( )meet growing domestic demand

• Demand collapses and NNPC convert PH to pexport ( Bonny Export terminal).

• Calson/Hyson created. Duke, Nigermed etcy g• Refineries have problems -Nigerian imports rise • Traders compete for Nigerian imports and other p g p

major import markets (find homes for Euro mogas) g )

• Vitol -Ghana, Total - East Africa, Addax - Senegal

6 2000’s: Withdrawal of majors –6. 2000 s: Withdrawal of majors –Traders take over

Refining – departure of the majors

100%

80%90%

100%

50%60%70% Gouv ernement

Majors

Non majors

20%30%40%

Non-majors

0%10%20%

2002 2011

Marketing – Total, the only remaining major 

Vivo Energy (Vitol/Helios/Shell)

Vivo Energy launched in 7 t i D 2011countries Dec 2011;

On completion in all 14 countries (exp. End-2012), Vivo Energy will operate more than 1,300 retail stations and around 1.2mn m³ of storage

Shell and Vivo Lubricants: Shell and Vivo Lubricants: blending capacity of around 120,000mt (in 7 countries)

Puma Energy (Trafigura)

In 2011 Puma Energy:In 2011 Puma Energy:

- acquired Chevron’s Namibia k ti b i (S )marketing business (Sep);

- completed acquisition of BP Botswana, BP Namibia, 75% stake in BP Zambia, 50% stake in BP Tanzania, and 50% stake in BP Malawi.

- Sold 20% stake to Sonangol in Sep’11 Sep 11

Puma Energy Presence in AfricaAfter KenolKobil buyout

Marketing operations

Non-marketing operations

AOG>>Emerging Capital Partners 

Kenol- Kobil/ OiLibya – future?

 

Import restrictions vary widely…

7 What next?7. What next?

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