Angola has given two Russian companies the green light to build a major refinery complex and railroad that will help the African country – a major oil exporter –cut its dependence on imported petroleum.
The $12bn mega project is being put forward by companies Rail Standard Service and Fortland Consulting Company, which have set up a consortium with local partners.
Their aim is to build a 400,000-barrel per day refinery in the southwestern city of Namibe. The work will also include a rail link to the newly refurbished Benguela railroad.An order signed by Angolan President José Eduardo dos Santos on 9 March gives the Russian JV permission to develop 10 km2 of land, and commits the Angolan government to buying 364,000 bpd of petrol and other fuels as production increases over an 11-year period, reports Portuguese news site, Negocios.
The investors will benefit from eight years of tax exemptions and will be allowed to repatriate their profits.The project is Angola’s latest attempt to set up a refining and petrochemical industry to extract more value from its oil production, presently the largest in Africa at 1.7 million bpd.
Now the country relies on the Refinaria De Luanda, owned by state oil company Sonangol. This was built in 1955, and has an output capacity of ±65,000 bpd. Products from this refinery are reportedly more expensive than imports. There is also the Chevron’s Cabinda Refinery, producing only 16,000 bpd.
As a result Angola is forced to import 80% of its petrol at a cost of about €160m a month – a serious drain on the country’s foreign currency reserves.
