Introduction

A Feasibility Study for Refineries helps investors assess demand, costs, technology, risks, and returns before committing capital. Africa offers a strong opportunity for new and upgraded refining capacity. The IEA expects African refinery capacity to rise by about 750,000 barrels per day over its forecast period. Refined product demand is expected to grow by about 840,000 barrels per day.

A refinery project needs more than crude supply. It needs reliable infrastructure, suitable technology, strong financing, and access to markets. Aviaan supports investors with structured feasibility study and market research services for complex industrial projects. The approach combines commercial research, financial analysis, operational planning, and investment risk assessment.

Market Overview & Industry Insights

Africa's refining sector is entering a major investment phase. New capacity is being added, while older plants need upgrades. Demand growth remains a key driver. However, financing, crude supply, logistics, regulations, and operating efficiency remain major risks.

• Africa's refining capacity: The IEA expects African refinery capacity to increase by about 750,000 barrels per day over its forecast period.
• Refined product demand: African demand is expected to rise by about 840,000 barrels per day over the same period.
• Import dependence: By 2030, Africa may still need nearly 2.3 million barrels per day of imported refined products. Diesel could account for close to 60% of those imports.
• Dangote Refinery: Nigeria's Dangote refinery has a nameplate capacity of 650,000 barrels per day. It began commercial operations in January 2024.
• Nigeria's existing state refineries: Four state-owned refineries have a combined nameplate capacity of 445,000 barrels per day. Their operating status has been affected by prolonged maintenance and rehabilitation.
• Ghana's new capacity: Sentuo Oil Refinery commissioned a 40,000-barrel-per-day Phase 1 refinery in Tema in January 2024.
• Future capacity additions: OPEC's medium-term outlook identifies about 1.2 million barrels per day of refinery capacity additions in Africa through 2030.

The opportunity is not limited to large integrated plants. Modular refineries can serve smaller markets. Brownfield upgrades can also improve existing assets. Investors must select capacity based on local demand and export potential.

Across South Africa, Nigeria, Kenya, Egypt, Morocco, Ghana, Ethiopia, Tanzania, Uganda, Zambia, Côte d’Ivoire, and Botswana, refinery opportunities differ widely. Each market requires a separate assessment of feedstock, demand, infrastructure, regulations, and product pricing.

Go-To-Market Strategy

Aviaan builds refinery market-entry strategies around realistic demand and commercial conditions. The focus is on finding the right customers, products, location, and route to market.

• Market Entry Assessment – Identify priority African markets, demand pockets, and feasible entry routes.
• Customer Segmentation – Map fuel distributors, industrial users, aviation buyers, and government-linked customers.
• Pricing Strategy – Assess import parity, crude costs, refining margins, taxes, duties, and logistics.
• Competitor Benchmarking – Compare refinery capacity, product mix, pricing, utilization, and market positioning.
• Commercialization Planning – Build channel, storage, distribution, export, and implementation plans.

Feasibility Study for Refineries

Aviaan evaluates refinery projects through an integrated commercial, technical, and financial model. The goal is to identify project strengths before major capital is committed.

• Demand Assessment – Measure gasoline, diesel, jet fuel, LPG, fuel oil, and other product demand.
• Technical Feasibility – Review refinery configuration, crude characteristics, processing units, utilities, and technology requirements.
• Operational Feasibility – Assess manpower, maintenance, storage, logistics, utilities, and supply reliability.
• Financial Viability – Build revenue, operating cost, CAPEX, working capital, cash flow, and profitability projections.
• Investment Analysis – Test project IRR, NPV, payback period, debt capacity, and investor returns.
• Risk Assessment – Model crude price, foreign exchange, utilization, margin, construction, and regulatory risks.
• Decision Support – Present clear investment scenarios and recommendations for management and investors.

A key issue is refinery utilization. Ghana's energy planning documents have previously identified 85% utilization as a benchmark for economic refinery operations. This shows why capacity alone does not prove commercial viability.

Market Research for Refineries

Aviaan uses market research to convert industry data into investment decisions. The research combines secondary sources with targeted primary research.

• Customer Analysis – Identify fuel buyers, distributors, industrial customers, and institutional demand.
• Competitor Intelligence – Benchmark existing and planned refineries across selected African markets.
• Market Sizing – Estimate addressable demand by product, geography, customer segment, and time period.
• Demand Forecasting – Develop realistic product demand scenarios using historical and current market signals.
• Pricing Analysis – Track crude costs, product prices, import parity, taxes, transport costs, and margins.
• Supply Chain Research – Examine ports, pipelines, tank farms, road networks, rail links, and crude supply routes.
• Opportunity Mapping – Identify underserved markets, product gaps, export opportunities, and brownfield opportunities.

This approach is important because refinery demand can vary sharply between African markets. A project that works in Nigeria may not have the same economics in Uganda or Botswana.

Business Plan for Refineries

Aviaan develops investor-ready business plans around the project's actual economics. The plan connects market findings with financial requirements and implementation decisions.

• Financial Modelling – Build integrated CAPEX, OPEX, revenue, cash flow, debt, and tax models.
• Revenue Projections – Forecast sales by refined product, customer group, market, and pricing scenario.
• Operational Planning – Define production capacity, staffing, maintenance, utilities, storage, and supply requirements.
• Funding Strategy – Assess equity, debt, strategic investors, development finance, and other funding routes.
• Growth Planning – Create phased expansion plans linked to demand, utilization, margins, and available capital.

The financial model should test both base and downside cases. This is vital for projects exposed to oil prices and currency movements.

How Aviaan Uses Primary Research

Secondary data provides the market foundation. Primary research adds practical market intelligence.

Aviaan can use structured interviews, surveys, supplier discussions, expert consultations, competitor checks, and field research. Refinery projects also benefit from discussions with fuel distributors, logistics operators, storage providers, industrial buyers, and technical specialists.

Primary research helps test assumptions that public data may not capture. It can reveal actual buying preferences, supply bottlenecks, pricing practices, contract terms, and customer concerns.

This evidence strengthens demand forecasts. It also helps identify risks before they appear in the financial model.

Our Experience & Credentials

For refinery projects, strong consulting requires more than financial modelling. It requires sector research, commercial analysis, investment thinking, and operational understanding. The following are representative refinery consulting assignment types that demonstrate the capabilities required for this sector. They are not presented as confidential client case studies.

• Refinery Market Research – Nigeria – Assess product demand, competitor capacity, import exposure, customer segments, and regional market opportunities.
• Refinery Feasibility Study – Ghana – Evaluate technical, commercial, operational, and financial assumptions for a refinery development project.
• Refinery Business Plan – Kenya – Develop market forecasts, operating assumptions, financial projections, funding requirements, and implementation priorities.
• Refinery Financial Model – Egypt – Test CAPEX, operating costs, product revenues, refining margins, cash flows, and investment returns under multiple scenarios.
• Refinery Investment Advisory – South Africa – Assess commercial risks, competitive positioning, market opportunities, and investment decision factors for a refining asset.

Conclusion

A Feasibility Study for Refineries is essential before committing capital to a large refining project. Africa has clear opportunities, but each market has different economics.

South Africa requires careful analysis of existing refining infrastructure and product demand. Nigeria offers major scale, supported by the 650,000-barrel-per-day Dangote refinery. Kenya requires strong attention to import substitution and regional distribution.

Egypt has an established refining base and large domestic demand. Morocco requires careful assessment of import dependence and refinery infrastructure. Ghana offers an important case for new refining capacity, including the 40,000-barrel-per-day Sentuo facility.

Ethiopia and Uganda require detailed landlocked-market logistics analysis. Tanzania offers strategic potential through its coastal location. Zambia requires strong regional supply-chain planning. Côte d’Ivoire has an established downstream petroleum industry. Botswana requires careful assessment of import logistics and regional supply economics.

The right project must balance capacity, demand, crude supply, technology, infrastructure, financing, and regulation. Aviaan can help investors build that decision framework. Contact Aviaan to assess the commercial and financial feasibility of your refinery investment.

FAQs

1. Why is a feasibility study important for a refinery project?

A feasibility study tests whether the project can operate commercially. It evaluates demand, technology, costs, financing, risks, and expected returns.

2. What does a refinery feasibility study include?

It can include market research, technical assessment, CAPEX analysis, operating costs, financial modelling, profitability analysis, risk assessment, and investment recommendations.

3. How much does a refinery feasibility study cost?

The cost depends on project size, country, refinery configuration, research depth, and modelling requirements. A detailed scope is needed before pricing the assignment.

4. Which African countries offer refinery investment opportunities?

Opportunities can be assessed in Nigeria, South Africa, Ghana, Egypt, Kenya, Tanzania, Uganda, Zambia, Côte d’Ivoire, Morocco, Ethiopia, and Botswana. Each requires separate market and financial analysis.

5. How does market research support refinery investment decisions?

Market research identifies demand, competitors, pricing, product gaps, supply routes, customers, and export opportunities. These findings improve the financial model and investment decision.

Related Service Pages

• Feasibility Study Services
• Business Plan Services
• Market Research Services

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