presented by: nasr eldin elhussein md, nile petroleum ... · cpa in 2005 and subsequently the 2011...
TRANSCRIPT
Established in 1954 as JV between Sudan Gov & Total Company .
Operated under Total flag till 1993
Owns 6 subsidiaries and JVs in Sudan, Ethiopia and Kenya
Owns and operates 28 depots
Owns and operate more than 260 service stations
Owns a modern LOBP and Grease plant
Owns oil products road transport company
Serves around half of the total market of Sudan of all oil products and all
key customers
Blends E5 bio fuels in Ethiopia (only in the region)
Supplies Sudanese Oil products of LPG & Motor Gasoline into the region.
Sudan has been relieved from the longest war in Africa after reaching the
CPA in 2005 and subsequently the 2011 referendum.
However, the nation will split into two countries by next week after a
peaceful referendum. Still more land and population will remain in the
mother country.
Total current population is @ 42.3 m.
Sudan is still under US embargo prohibiting international financial aid and
goods of US origin.
Long negotiations regarding Darfour in Doha resulted in Stakeholders
Peace Agreement.
Secession of South will impact on oil revenue, however this mainly affects
Forex account as oil export represents only 7.2% of GDP.
Sudan will remain controlling around 33% of the total oil production.
Exploration results from northern states are very promising.
Oil from South oilfields will be processed and exported through North
resulting in more oil revenue to Sudan.
Rapidly increasing production and high prospects of Gold and other
minerals are expected to cover for part of the Forex account 2011 loss
after 9th of July.
Sudan suffered from US embargo for more than 15 years which affected the borrowing ability.
However, outstanding economic performance has been achieved:
Sustainable GDP growth over past 15 years from
less than US$ 15bn to over US$ 65bn
Significant Improvement in GDP per Capita from
less than US$1,500 to over US$ 2,300
Increased foreign investment to over US$ 3bln as
yearly average over the past 4 years.
Oil production is at current rate of 483,000 bbld.
More oilfields are expected to enter the production
phase by end of the fiscal year and over the next 3
years.
Northern Sudan climate is hot and dry in September-
May; rainy season from April/May to September/October
depending on latitude (average annual rainfall 100 mm).
Southern Sudan rainy season from April to October
(average annual rainfall 1,000 mm)
With desert covering wider part of the country, such
climate put pressure on the efforts for conservation of
green cover.
The government has thus put plans to encourage the use
of LPG as a cocking gas since the 90’s of the last
centaury, however with logistics difficulties and product
availability issues this has only materialized in good
spread of LPG use after 2003.
To encourage the use of LPG particularly after the
operation of Khartoum refinery, the government
maintained good level of price subsidy, tax and customs
holidays on LPG equipments and relatively better
distribution margin (compared to other Oil Products).
The market is regulated and LPG prices are currently
subsidised by the government with more than 55% of its
international prices.
Sudan LPG consumption was as low as 30K tpa in 2000
and rapidly increased to over 300K tpa in 2010 and
expected to reach 540K tpa by 2014.
LPG per head was less than 1 Kg per head per year in
2000. Now it is exceeding 7 Kgs (2010 actual). This
expected to exceed 12 Kgs by 2014.
Khartoum, the capital represents over 60% of the total
nationwide consumption despite the fact that the
population of Khartoum is only 13% (5.3 m). Khartoum
consumption by head is @ 35 Kgs per head per year.
Currently, the LPG demand is supplied from one of the
local refineries (Khartoum refinery) with nearly one
thousand MT per day.
Consumption of LPG varies according to the demand
location. This is mainly affected by the difficulties of
product logistics. Consumption of some towns is still at
as low as 1 Kg per head per year.
Some supplies to neighboring countries from Khartoum
refinery are taking place.
With projected growth the demand will exceed the local
supplies and thus importation is inevitable.
Main demand for LPG comes from household which is supplied in
mainly 12.5 Kgs bottles.
Other LPG bottles such as 5 Kgs, 25Kgs and 45 Kgs are still in
use but with lower share than 12.5 Kgs bottles.
Other sectors supplied are mainly bakeries and very few autogas.
Industrial sector is also demanding the product that however,
restricted to house holds and bakeries due to high subsidy
There was a successful experience of using LPG in power
production. However, with the development in hydropower
production there was no demand for LPG.
Autogas experience started early this century by a small player. It
is now dying out due to infrastructure and reputational issues.
Currently 99% of the nationwide demand is supplied by 4 key
players with relatively similar size. Aman is the largest with 25%
and Nile is at 22%. Such players are supplying everywhere in the
country except for south where only Nile is operational.
Other small players (5 players) are sharing 1% and operating in
selective markets.
Solid fuel (wood) is still widely used in the form of char coal. Yet to have industry initiatives to encourage the LPG use.
It worth mentioning that no LPG association is yet present in the country.
Despite high governmental subsidy and regulated official prices of LPG bottles, the government is yet to implement
adequate regulations to maximise the targeted end-user benefits. Still some of the subsidy is absorbed as margin by
the long chain of product distribution.
Lack of infra structure, particularly in South, represents real challenge to LPG logistics.
Downstream marketing margin is relatively low compared to the increasing cost of operation.
Issues related to market practices are exist &
need to be addressed collectively by the
industry e.g. counterfeiting and Illegal filling
(decanting) of cylinders and Unauthorised
acquisition, detention and migration of
competitors bottles
HSE is still a concern despite the low level of
accidents reported. As in the rest of Africa the
level of HSE awareness requires more
enhancements.
HSE issues that require attention and action
are laying mainly at the lower layers of the
distribution chain e.g. providing compliant
transport of bottles, loading and offloading of
bottles, LPG kiosks standards and in kiosk
bottles illegal decanting etc.