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NEWS UPDATE: OPEC hinges attainment of global 6.9mbpd refining capacity addition on Dangote Refinery

NEWS UPDATE: OPEC hinges attainment of global 6.9mbpd refining capacity addition on Dangote Refinery

Dangote’s 650,000 barrels-per-day (bpd) oil refinery projection has been identified as one of the oil distillation companies that would boost global refining capacity by 6.9 million barrels per daytime betwixt 2021 and 2026.

The Organisation of the Crude oil Exporting Countries (OPEC), which made this disclosure in its 2021 World Oil Outlook released lately, said Africa’s medium-term outlook appears to a greater extent optimistic with 1.2 million barrels-per-day (mb/d) of new capacity expected by 2026; half of which is to be accounted for by the 650,000 bpd Dangote Oil Refinery projection in Nigeria, which is likely to come up on stream in 2022.

The oil cartel identified these projects, which are located mostly in Nigeria, Republic of Angola and Republic of Ghana, to include a number of pre-fabricated modular facilities. “One time commissioned, these projects will assist to cut down production imports to Nigeria and Westward Africa and will, in turn, increment the utilisation of local rough. In Northward Africa, refinery capacity expansions are likely in People’s Democratic Republic of Algeria and Arab Republic of Egypt,” it said.

Similar to preceding outlooks, OPEC said refinery additions are concentrated in developing regions, such as the Asia-Pacific, the Middle East and Africa. OPEC added that the total medium-term capacity additions of 6.9 mb/d are composed of projects in different evolution stages.

“Around 3.5 mb/d of capacity is under interpretation or shut to this stage; hence, these are the projects with the highest certainty to materialize in the medium-term. There are also projects totalling 3.4 mb/d that are mostly in early stages of evolution, but still advanced plenty in terms of financing and engineering science to be considered ‘firm’ medium-term additions,” the global organisation stated.

These regions, it famous, account for nearly 90% of the additions in the period 2021–2026. “The medium-term outlook contains several big projects, many of which have petrochemical integration as good. These developments are in line with expected oil demand growth,” it added.

Speaking on investments in refinery projects, OPEC puts the total global estimated required investments at $1.5 trillion in the 2021-2045 period. It famous that these include investments of nearly $450 billion in new refinery projects and expansions of existing units located mostly in developing countries, including those in the Middle East, Asia-Pacific, Africa and Latin America.

OPEC stated, “Required investments in the midstream sector are estimated at around $1.1 billion in the same time horizon and are attributed to the expansion of the infrastructure for refining, storage and pipeline systems, predominantly in developing regions, but also in big oil exporting regions (e.g. the US & Canada and the Russian Federation & Caspian). Thus, globally, oil-related investment needs in the long-term are estimated at $11.8 trillion.

“Long-term (2021–2045) capacity additions are expected at 14 mb/d, mostly in developing countries. Notwithstanding, the Reference Instance projects a important slowdown in the rate of additions. Africa and Other Asia-Pacific are the regions where important incremental capacities are expected, fifty-fifty after 2030.

The written report said, “The continent of Africa is home to an abundance of free energy resources, including in relation to 10 per cent of the world’s oil reserves; nevertheless nonetheless, it still has difficulty in harnessing these precious resources to encounter its free energy demand. This, in turn, hinders efforts to supply affordable and dependable free energy required for economical growth and evolution.

“Africa has yet to unlock its huge potential in the free energy sector, although its ever-increasing population growth and economical prospects require to a greater extent free energy. This drawback is mostly due to regional uncertainties, as good as regime policies and regulatory frameworks guiding the free energy sector, and to a greater extent lately, the efficiencies required to cut down CO2 emissions in exploration and production activities. These challenges have made it increasingly hard to secure much-needed financing for E&P from foreign investors.”

The written report famous that the impacts of the COVID-19 pandemic had also been a major setback, particularly for those countries depending heavily on revenue from fossil fuels for their economical growth and evolution.

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