The MSGBC region’s downstream sector represents a very attractive investment opportunity due to growing regional demand, industry-focused policies and the introduction of local oil and gas to the market in 2024.
During the region’s premier energy conference, MSGBC Oil, Gas & Power 2023 , a panel discussion titled “Meeting Growing Demand: A Renewed Approach to West Africa’s Downstream Sector” examined developments in the downstream sector of the region, the challenges encountered and strategies to expand infrastructure. The session was sponsored by the Société Nationale Industrielle et Minière de la Mauritania.
Across the MSGBC region, demand for energy is increasing rapidly, and according to Rus Jiri, Africa Sales Director at Nueman Esser, this has resulted in “increased demand for petroleum products for refineries”. With the development of the 100,000 barrel per day Sangomar oil field ready to come online in 2024, the region appears poised to ramp up refinery and advance distribution. However, despite this opportunity, several challenges persist in the market.
In particular, the energy transition has led to a decrease in investment in oil and gas, while current refining facilities need upgrades to adapt to changing specifications of petroleum products. Marième Ndoye Decraene, Managing Director of Senegal’s main refinery, Société Africaine de Raffinage (SAR), explained that “Currently, we are able to satisfy 50% of the market in terms of energy production. We have launched improvements to the refinery and implemented technical solutions to process the heavier Sangomar oil compared to oil currently imported from Nigeria. We are working with the Africa Corporation Bank to secure financing for these projects.”
Ndoye added that “We will benefit from pooling investments through regional roadmaps. We need to modernize our refineries in innovative ways, which is why we need financing, especially sustainable and green financing.”
Jiri introduced the role of training and capacity building, highlighting how refinery improvements can translate into employment opportunities. Jiri added that, for Nueman Esser, “We are delivering new technologies to meet changing standards while revitalizing operations and infrastructure, which provides new training opportunities for Africans.”
Mohamed Filali, Founder and Managing Director of Jurisfiscal, added that revitalizing the downstream sector and promoting cross-border collaboration will be crucial for the transition to be fair and just across the MSGBC region. Filali said that “Mauritania can be strong in the downstream sector by strengthening its cooperation with Senegal.”
Expanding on strategies that countries in the MSGBC region can adopt to attract investments in the downstream sector, Filali said countries must adhere to their macroeconomic plans and find ways to maximize the flow of capital in line with their growth plans. and availability of resources. He said: “Introducing tax exemptions will not work because other countries will continue to tax industries and profit while you lose. Mauritania can maximize the use of green hydrogen for green steel and attract investments from that.”
Meanwhile, Mohamed Mansare, Upstream Director, SONAP, Guinea, highlighted some of the effective ways Guinea has been able to develop infrastructure projects. Mansare said that “Guinea has become a country capable of financing a number of projects without external assistance, such as the two oil depots under construction by SONAP in Kôdjaran. Guinea has managed to control its inflation, and today, we are always looking for oil and gas, but it is certain that the importation of hydrocarbons can be done with our neighbors.”
Thus, investment opportunities in the downstream sector of the MSGBC region are abundant, and investors have been encouraged to engage with countries in the region
