Zambia shortlists five firms for majority stake in oil refinery

16th April 2018 By: Reuters

Zambia has short-listed five companies including Britain's Glencore Energy and Sahara Energy Resources to buy a majority stake in its only oil refinery, a state-owned firm said on Monday.

The government-owned Industrial Development Corporation (IDC) has said it wants a strong strategic equity partner that will improve the production capacity of Indeni Oil Refinery to a level that will meet the nation's future petroleum demand.

The IDC said in a statement the short-listed firms will now be asked to submit technical proposals on their bids.

Seven firms submitted bids to buy a majority stake in Zambia's sole 24 000 barrel per day Indeni Petroleum Refinery, an executive at the agency handling the bidding said on March 17.

Others short-listed are Joint Stock Company Global Security of Russia, China Petroleum Technology and Development Corporation and a Chinese consortium of Beijing Huiersanji Green Chem - Tech Co. and Avic International Holding Corporation.

"Indeni's contribution to the national petroleum demand in Zambia has, since 2005, been less than 50% and this will progressively reduce if nothing is done to increase the production capacity of the plant," the IDC said.

With a design capacity of 1.1-million tonnes per annum and a current output of 850 000 tonnes per annum, Indeni's production was far short of Zambia's combined demand of petrol and diesel currently in excess of 1.7-billion litres per annum, it said.