Mozambique Seals $8b Oil Refinery Deal

By Jose Alface Posted 04 April 2008 @ 03:52 pm EET     Print     Reprint     E-Mail     Comments

MAPUTO (IBTimes.com) - Mozambique's government approved plans to build an $8 billion oil refinery within the next two years, in a bid to reduce the country's dependence on imported fuels.

Oilmoz Lda, a company founded by former Mozambican foreign affairs minister Leonardo Simao, plans to start building the refinery, after the country's only facility was shut down in 1984.

The refinery in southern Maputo province will be capable of producing 350,000 barrels a day when it starts operating in six to seven years, Mozambique's energy ministry said in a press release.

"We've already got the financial structure ready with a consortium of banks,'' Fausto Cruz, co-founder of Oilmoz.

Leonardo Simao said the project would be financed through loans from foreign banks.
Meanwhile, the country's state-run oil company Petroleos de Mocambique S.A.R.L., or Petromoc, will own a stake in the plant, the exact shareholding structure has not been confirmed.

The OILMOZ development is the second oil refinery project announced by Mozambique over the past year.

In October last year, the Mozambican government and U.S. company, Ayr Logistics, sealed a $5 billion deal for the construction of a refinery in Nacala-a-Velha in the northern Nampula province. The output is expected to be 300,000 barrels a day.

Ayr said earlier it February that it expects an environmental impact study on the plant, in the northern port city of Nacala, to be completed this year.

The former Portuguese colony has limited energy supplies, leaving it reliant on foreign oil and gas. Riots over fuel price increases on February 5 in the capital Maputo, left at least three dead.