Sudan has attracted much attention the past decade, mostly for a vicious civil war that finally split the country in 2011. But even in the midst of such turmoil, business opportunity can exist. Thats the case for the countrys lubricant industry, according to a government official who addressed the ICIS African Base Oils and Lubricants Conference in Durban, South Africa in November.
Lubricant demand in the combined war torn country rose more than four-fold in the decade leading up to the breakaway of South Sudan. That growth is expected to continue, said Ishag A. Bashir, Minister of Oil in the Republic of Sudans Ministry of Petroleum. The market certainly has challenges, he said, but prospects for progress seem good in spite of them.
Potential demand in a country of this size, where infrastructure, industry and transport are in the early stages of development, could go over 400,000 metric tons per year, he said, noting that demand in 2011 was one-quarter of that amount. There is much to be expected from the demand side in the future.
Bashir, who is also president of a consulting business, Viking Energy, said local and regional companies essentially have the Sudanese and South Sudanese lube markets to themselves these days. International oil majors such as Shell, Mobil, Agip and Total exited the countrys downstream sector in the 1980s. Today seven domestic companies blend lubricants in the country, led by Tappco, which claims 40 percent of the market.
Lubricant demand in the country was a meager 20,000 t/y in 2001, Bashir said, but rose to approximately 95,000 by 2011. He forecast that the pace of growth will pick up the next few years and that demand will approach 150,000 t/y by 2015.
While projecting lube demand for the both countries, Bashir contended that Sudans economy and lube market has advantages over South Sudans because the latter is landlocked, which complicates transportation of supplies.
He acknowledged some problems. An arid climate creates a need for lubricants that can handle dust and high temperatures. However, a significant portion of lubricants in the market are low quality, some unbranded and not adhering to any performance specifications. They nevertheless attract buyers looking for cheap products. Counterfeit products are common and their prevalence seems to be growing. Neither country has base oil production facilities, so producers rely completely on imports.
Bashir predicted, though, that these difficulties will not be enough to counteract the benefits of an economic stimulus plan by the government and projected growth in the automobile population.
If he proves correct, Sudan and South Sudan might see their lube markets grow after their conflict, too.