Industry Trend Analysis - Refining Growth To Curb Crude Exports - FEB 2018

BMI View: Nigeria ' s projected growth in refining capacity over the early 2020s will substantially erode the country ' s crude oil exports given a weak new projects pipeline.

In recent years, major oil exporters have been expanding their downstream sectors to maximise the value of crude oil through product and petrochemical sales, as well as boost economic diversification away from crude oil sales. Nigeria is late to this trend but is moving to a potentially transformational period with the start-up of the 650,000b/d Dangote refinery by 2020 and potentially a second 250,000b/d facility led by Petrolex Oil & Gas in Ogun State by 2021.

While this is positive news, particularly as the refining sector is moving away from the inefficient state facilities and into the public sector, other countries have planned increases in oil production to meet new demand from domestic refineries as well as sustain exports. Nigeria may struggle in this regard given the dearth of new projects in the run up to the 2020/2021 period, where new refining capacity will start up.

Refining Capacity Up, Oil Exports Stable
Saudi Arabia - Oil Exports & Refining Capacity (000b/d)
Source: BMI, JODI

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