March 2017

Trends and Resources

Business Trends: Africa—Will increasing demand spark downstream capacity builds?

Over the past decade, Africa’s oil demand has increased by more than 1 MMbpd, to nearly 3.9 MMbpd. Africa’s oil production is more than double the amount it consumes, but lack of investment, failing infrastructure and inadequate refining capacity force the continent to rely on imports to satisfy increasing fuel demand.

Nichols, Lee, Hydrocarbon Processing Staff

Over the past decade, Africa’s oil demand has increased by more than 1 MMbpd, to nearly 3.9 MMbpd. Africa’s oil production is more than double the amount it consumes, but lack of investment, failing infrastructure and inadequate refining capacity force the continent to rely on imports to satisfy increasing fuel demand. Most African refineries operate well below capacity, and the majority of new refining investments rarely progress beyond the initial concept stage. As a result, refined products imports have increased for years. In the short term, African oil demand is expected to climb by nearly 1 MMbpd by 2022 (FIG. 1). FIG. 1. African oil demand, 2015–2021

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