Presented by: Nasr Eldin Elhussein MD, Nile Petroleum Company Limited

Transparency

Established in 1954 as JV between Sudan Gov & Total Company .

Operated under Total flag till 1993

Owns 6 subsidiaries and JVs in Sudan, Ethiopia and Kenya

Owns and operates 28 depots

Owns and operate more than 260 service stations

Owns a modern LOBP and Grease plant

Owns oil products road transport company

Serves around half of the total market of Sudan of all oil products and all

key customers

Blends E5 bio fuels in Ethiopia (only in the region)

Supplies Sudanese Oil products of LPG & Motor Gasoline into the region.

Sudan has been relieved from the longest war in Africa after reaching the

CPA in 2005 and subsequently the 2011 referendum.

However, the nation will split into two countries by next week after a

peaceful referendum. Still more land and population will remain in the

mother country.

Total current population is @ 42.3 m.

Sudan is still under US embargo prohibiting international financial aid and

goods of US origin.

Long negotiations regarding Darfour in Doha resulted in Stakeholders

Peace Agreement.

Secession of South will impact on oil revenue, however this mainly affects

Forex account as oil export represents only 7.2% of GDP.

Sudan will remain controlling around 33% of the total oil production.

Exploration results from northern states are very promising.

Oil from South oilfields will be processed and exported through North

resulting in more oil revenue to Sudan.

Rapidly increasing production and high prospects of Gold and other

minerals are expected to cover for part of the Forex account 2011 loss

after 9th of July.

Sudan suffered from US embargo for more than 15 years which affected the borrowing ability.

However, outstanding economic performance has been achieved:

Sustainable GDP growth over past 15 years from

less than US$ 15bn to over US$ 65bn

Significant Improvement in GDP per Capita from

less than US$1,500 to over US$ 2,300

Increased foreign investment to over US$ 3bln as

yearly average over the past 4 years.

Oil production is at current rate of 483,000 bbld.

More oilfields are expected to enter the production

phase by end of the fiscal year and over the next 3

years.

Khartoum refinery @ night

Northern Sudan climate is hot and dry in September-

May; rainy season from April/May to September/October

depending on latitude (average annual rainfall 100 mm).

Southern Sudan rainy season from April to October

(average annual rainfall 1,000 mm)

With desert covering wider part of the country, such

climate put pressure on the efforts for conservation of

green cover.

The government has thus put plans to encourage the use

of LPG as a cocking gas since the 90’s of the last

centaury, however with logistics difficulties and product

availability issues this has only materialized in good

spread of LPG use after 2003.

To encourage the use of LPG particularly after the

operation of Khartoum refinery, the government

maintained good level of price subsidy, tax and customs

holidays on LPG equipments and relatively better

distribution margin (compared to other Oil Products).

The market is regulated and LPG prices are currently

subsidised by the government with more than 55% of its

international prices.

Sudan LPG consumption was as low as 30K tpa in 2000

and rapidly increased to over 300K tpa in 2010 and

expected to reach 540K tpa by 2014.

LPG per head was less than 1 Kg per head per year in

2000. Now it is exceeding 7 Kgs (2010 actual). This

expected to exceed 12 Kgs by 2014.

Khartoum, the capital represents over 60% of the total

nationwide consumption despite the fact that the

population of Khartoum is only 13% (5.3 m). Khartoum

consumption by head is @ 35 Kgs per head per year.

Currently, the LPG demand is supplied from one of the

local refineries (Khartoum refinery) with nearly one

thousand MT per day.

Consumption of LPG varies according to the demand

location. This is mainly affected by the difficulties of

product logistics. Consumption of some towns is still at

as low as 1 Kg per head per year.

Some supplies to neighboring countries from Khartoum

refinery are taking place.

With projected growth the demand will exceed the local

supplies and thus importation is inevitable.

Main demand for LPG comes from household which is supplied in

mainly 12.5 Kgs bottles.

Other LPG bottles such as 5 Kgs, 25Kgs and 45 Kgs are still in

use but with lower share than 12.5 Kgs bottles.

Other sectors supplied are mainly bakeries and very few autogas.

Industrial sector is also demanding the product that however,

restricted to house holds and bakeries due to high subsidy

There was a successful experience of using LPG in power

production. However, with the development in hydropower

production there was no demand for LPG.

Autogas experience started early this century by a small player. It

is now dying out due to infrastructure and reputational issues.

Currently 99% of the nationwide demand is supplied by 4 key

players with relatively similar size. Aman is the largest with 25%

and Nile is at 22%. Such players are supplying everywhere in the

country except for south where only Nile is operational.

Other small players (5 players) are sharing 1% and operating in

selective markets.

Solid fuel (wood) is still widely used in the form of char coal. Yet to have industry initiatives to encourage the LPG use.

It worth mentioning that no LPG association is yet present in the country.

Despite high governmental subsidy and regulated official prices of LPG bottles, the government is yet to implement

adequate regulations to maximise the targeted end-user benefits. Still some of the subsidy is absorbed as margin by

the long chain of product distribution.

Lack of infra structure, particularly in South, represents real challenge to LPG logistics.

Downstream marketing margin is relatively low compared to the increasing cost of operation.

Issues related to market practices are exist &

need to be addressed collectively by the

industry e.g. counterfeiting and Illegal filling

(decanting) of cylinders and Unauthorised

acquisition, detention and migration of

competitors bottles

HSE is still a concern despite the low level of

accidents reported. As in the rest of Africa the

level of HSE awareness requires more

enhancements.

HSE issues that require attention and action

are laying mainly at the lower layers of the

distribution chain e.g. providing compliant

transport of bottles, loading and offloading of

bottles, LPG kiosks standards and in kiosk

bottles illegal decanting etc.