An upward trend in bunkering in Nigeria

What trends in the bunkering sector are you expecting in the coming years?
The oil and gas industry took a major hit in 2020 as a result of the global Covid-19 pandemic. However, we have seen the market rebound in 2021. Oil prices are beginning to climb, touching the USD 65 benchmark.
This in addition to events that will happen in the coming year and a half, such as the commissioning of the Dangote Refinery, will definitely trigger an upward trend in bunkering activities around our waters.
Investments already made in the refining sector position Nigeria as both a refining and bunkering hub in West Africa.
Moreover, as vaccines are rolled out, activity in the shipping industry should pick up, which will further propel activity in the bunkering sector.

How has the International Maritime Organization (IMO) cap on sulphur content in marine fuels changed the maritime sector?
In January 2020, the new global cap by the IMO on sulphur in marine fuels came into effect. The regulation mandates a maximum sulphur content of 0.5% to reduce the air pollution created by the shipping industry. The effects on the African continent were expected to be profound.
When the regulation took effect, doubts were expressed in some quarters about our regulator’s commitment to ensure compliance. However, compliance has been strict and rigorous, and oil traders and ships that do not meet the IMO regulation cannot operate within Nigerian waters. Unfortunately shipping costs have increased as a result but this is a small price to pay for a cleaner environment.

What is Propetrol’s position in Nigeria and what is your strategy for growth on the continent?
We currently have a large share of the bunkers and offshore cargoes market in Nigeria, Our ambition is to grow our trading capacity and revenues along the West African coast in countries such as Ghana, Gambia and Sierra Leone in the short term and to become a major player in the African refined products market in the mid-term.
To this end, we have established a trading desk in South Africa that covers the regional market, with countries such as Mozambique and Zimbabwe. As of today, Nigeria accounts for 80% of our revenue, but our focus across the continent will probably reduce that to 70% by next year.

What is the strategy behind your ongoing fleet expansion and new terminal?
We currently have three vessels. We plan to expand our fleet by two more this year. We are looking at a low-draft, small tanker that can access the creeks and a 15,000-17,000 deadweight to service our customers along the West African coast and take our cargoes into the terminal we recently acquired. increasing our fleet, gives us the capacity to penetrate markets we currently do not reach due to equipment limitations.
Our new terminal in Lagos has a capacity of 25,000 tonnes. This terminal will drive efficiency in our service delivery to our C&I customers inland and provide leverage in our retail network expansion plans.

What is Propetrol’s strategy to grow its retail petrol outlets?
At present we have 15 retail stations. The plan is to increase our network to 40 stations in the next three years. We believe we can increase our retail footprint by 10-15 retail stations per year.
We are also keeping an eye on the federal government’s transition to LPG from gasoline as the preferred automotive fuel. We have made efforts to include LPG retail points in our retail stations and we will continue to ride this trend. Our retail footprint extension gives us the visibility our brand needs.

Is Propetrol looking to enter the upstream sector?
Propetrol participated in the marginal field bid round. Our vision is to become vertically integrated. The acquisition of a marginal field is a step in the right direction for us.