The downstream market in the region is largely underdeveloped and, is controlled by the governments; hence, this market is heavily dependent on government spending. The governments in the region have failed to maintain and utilize these facilities.
Hence, though this region accounts for about 28% of the total oil production in Africa, many countries in West Africa depend heavily on import to fulfill their requirements for downstream industry end products. As a result, many countries in the region are inviting private investment in the sector.
Browse details of 75 pages research report on West Africa Oil & Gas Downstream Market @ www.researchcosmos.com/reports/wes…2018-2023/1586298
Cheaper Feedstock and Private Investments – Drives the Market
Since the fall in oil prices in mid-2014, the feedstock buying power of the downstream companies has increased. The cheaper feedstock has substantially increased the profit margins for downstream companies.
The larger profit margins, combined with the policy to encourage private investment, are expected to drive the downstream market in the region. The major restraint of the downstream industry in West Africa is underutilization of the refining capacity, caused by the combination of factors, like failure to maintain the refineries and inconsistent feedstock supply.
The heavy government subsidies have had an adverse effect on the downstream sector, as these subsidies reduce the profit margins and can even result in losses. An example of the effect of government subsidies is the refining industry in Nigeria.
In January 2016, the government of Nigeria removed gasoline subsidies; this helped Nigeria’s refineries achieve their first profit since February 2015. Low-profit margins have resulted in failure to maintain the refineries.
Nigeria is expected to be Fastest Growing Market
Nigeria has a nameplate capacity of 445,000 bpd, the largest in West Africa and the fourth largest in Africa. However, the refining facilities are very old, and they suffer from lack of maintenance and inconsistent feedstock.
As a result, 80% of the country’s downstream product requirement is fulfilled by the imports. The government of Nigeria plans to process all the domestic refined product consumption locally by 2019.
In order to improve the downstream industry production and reduce the dependence on import, Nigeria's Department of Petroleum Resources (DPR) and state-owned Nigerian National Petroleum Corporation (NNPC) have opened their door to private, international, and local investors. This has resulted in the Dangote Group building the largest oil refinery with the nameplate capacity of 650,000 bpd of oil, which is not only expected to meet Nigeria’s consumption but also allow the country to become an exporter of the refined product.
Avail Sample Market Brochure of the report @ www.researchcosmos.com/request/1586298
The Dangote oil refinery is expected to start the production by 2019. Apart from that, in May 2017, Emmanuel Ibe Kachikwu, Ministry of State, Petroleum Resources, Nigeria, announced that the Nigerian government has reached an agreement with Agip to build a new refinery of 150,000 bpd capacity.
Owing to increased investments to build new infrastructure, Nigeria is expected to be the fastest growing market for the downstream industry in the region.
Notable Developments in the Market
- January 2018: Nigerian National Petroleum Corporation’s Escravos-Lagos Pipeline suffered an explosion.
- January 2017: Eni SPA and Nigerian National Petroleum Corp. have signed a Memorandum of Understanding (MoU), under which both have agreed to the modernization of NNPC subsidiary Port Harcourt Refining Co Ltd.’s (PHRC) refining complex in Rivers State, Nigeria.
MAJOR PLAYERS: NIGERIAN NATIONAL PETROLEUM CORPORATION, DANGOTE GROUP, ENI S.p.A., TEMA OIL REFINERY Ltd, amongst others
Inquire this report @ www.researchcosmos.com/inquire/1586298
Reasons to Access This Report
- Analyzing the effect of government policies, oil price, and expected new investments in upstream, midstream and downstream industry of the region on the West Africa downstream market
- Analyzing various perspectives of the market with the help of Porter’s five forces analysis
- Identifying which countries are expected to witness the fastest growth during the forecast period.
- Identifying the latest developments, market shares, and strategies employed by the major market players.
- 3 months analyst support along with the Market Estimate sheet (in excel).
Ask for Report @ www.researchcosmos.com/customization/1586298
For more information:
Make an Inquiry about this report HERE!