Buyer walks away from Morocco’s Samir refinery – “Hopes that the country’s only refining facility might re-open are dealt a blow” Petroleum Economist
Casablanca, Morocco (Petroleum Economist) September 11, 2020 — London-based infrastructure project financer Elite Capital has told the Moroccan court responsible for the insolvent Samir refinery that it is breaking off talks, ongoing since 2018, to buy the shuttered plant.
The 2mn bl/d refinery is Morocco’s only such facility, meaning its closure has left the North African state entirely dependent on refined product imports. It has been shut-in since August 2016, says Elite Capital, while court-appointed experts value the unit at MAD21.6bn ($2.1bn).
Faisal Khazaal, Elite Capital’s Kuwaiti chairman, cites a “flaw” in the proposed deal as the motivation for walking away from what he terms “marathon negotiations”. Dubai’s Tabarak Investment Capital investment bank was also part of the Elite Capital negotiating group.
Smaller, older Mediterranean refineries—Samir dates back to the 1950s—have come under increasing pressure in their home market over several years due to an expansion of more modern and cost-effective plants in the Middle East that can easily access the region. Significant investment in upgraded and new refining capacity on the US Gulf Coast on the back of US shale oil feedstock has also increased competition in the Atlantic Basin market, putting pressure on refiners both in northwest Europe and the Mediterranean.
Samir is by no means the only regional casualty, although some other facilities have managed to avoid having to close entirely by repurposing to produce biofuels or become storage plants—the latter an option the Moroccan government is exploring for Samir. But while using Samir’s storage would boost its products supply security, having a fully functioning refinery again would be even better. Elite Capital’s decision to exit can only be a blow to hopes of an imminent refining restart.
Petroleum Economist – Contact Details –
27 Furnival Street,
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Elite Capital & Co. – Contact Details –
Elite Capital & Co. Limited
33 St. James Square
London, SW1Y4JS
United Kingdom
Telephone: +44 (0) 203 709 5060
SWIFT Code: ELCTGB21
Website: ec.uk.com
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