Mozambique signs $8 bln oil refinery deal
Mozambique's government has approved the construction of an oil refinery in an $8 billion deal designed to reduce the energy-hungry southern African nation's dependency on imported fuels.
The refinery in southern Maputo province will be capable of producing 350,000 barrels of refined fuel per day when it becomes operational in seven years, Mozambique's energy ministry said in a press release.
The agreement with OILMOZ, the company developing the project, was signed on Monday, it said.
Leonardo Simao, one of the founders of OILMOZ, told Reuters that the project would be financed through loans from foreign banks. He said environmental and feasibility studies would be completed within two years.
The OILMOZ development is the second oil refinery project announced by Mozambique in the past year.
The Mozambican government and U.S. firm Ayr Logistics signed a $5 billion deal last October for the construction of a refinery in Nacala-a-Velha in the northern Nampula province.
It will have an expected output capacity of 300,000 barrels per day when it starts production in 2005.
The refineries could help ease an energy crunch in Mozambique, which has enjoyed an economic boom since the end of a 17-year civil war in 1992.
The former Portuguese colony has limited energy supplies, making it reliant on foreign oil and gas. It also has faced rising petrol prices and frequent shortages at pumps, prompting fears that its economic growth could slow.
A slew of refineries have been proposed in sub-Saharan Africa but analysts say few will go ahead due to rising costs and financing difficulties.
