Qatar oil refinery for Harare?
Posted by CM on December 16, 2007
If the following takes place, it would be a significant development for Zimbabwe:
Qatar’s Venessia Petroleum plans to build a 120 000 barrels-per-day refinery in Zimbabwe costing as much as $1,5-billion, the company’s general manager said on Monday.”We have signed the agreement with the Zimbabwe energy ministry and the feasibility study is nearly completed,” Jawhar Zaidi said.
Zaidi said the refinery, to be located in Harare, would move into the design stage by the end of the year. “We would look to import crude from Qatar or another Middle Eastern country,” Zaidi said, adding that the company had still to decide how the project would be financed.
Venessia Petroleum is chaired by Abdulaziz Bin Mohammad Bin Jabor al-Thani, a member of Qatar’s ruling family, Zaidi said.
Zimbabwe’s economy is on the brink of collapse with inflation running at an annual 6,600 percent, the highest in the world. Isolated from the West over its human rights record, the government has proposed a bill to transfer majority ownership of foreign companies to Zimbabweans. The bill, if passed by the Senate, would force mining and banking firms to give at least 51 percent control to Zimbabweans.
Another member of the Venessia group plans to build a hotel in Zimbabwe, Zaidi said, adding the company was not concerned about the political situation.
It is hilarious for Zaidi to say his company “was not concerned about the political situation.” That would make Venessia a very naive and foolish investor!
Obviously they would have received guarantees to safeguard their investment which they believe are credible enough to make it worthwhile. For a non-Western investor of that magnitude, and investing in the critical area of fuel, perhaps that is the case given the country’s energy desperation.
There is no question this is a good area to invest in in Zimbabwe given the chronic fuel shortages of the past eight years. And a Qatar company would certainly have no trouble with providing the crude oil for the refinery. An obvious issue would be whether for them to be allowed to charge fuel economic retail prices for the fuel. This has not been such a straightforward issue in the Zimbabwe of price controls often completely unrelated to production costs, and of a deep official mistrust of the business sector in general.
This would be a very good development for Zimbabwe if it came about.