Niamey, Niger | – Soraz, the oil refinery in Niger owned by China National Petroleum Corporation’s (CNPC) , said on Tuesday it faced short-term difficulties due to a fall in global oil prices, but still aimed to sell its own products eventually.
The refinery, a joint venture between CNPC and the government, has a capacity of 20,000 barrels per day and processes oil from the West African country’s Agadem field that started production in 2011.
The company said in a statement it was struggling to service a $980 million loan to the government by China’s Exim bank used to build the refinery and refinanced in 2012 at a rate of 2 percent over 20 years.
“The plant has encountered recent financial and commercial problems, namely the lowering of the price of hydrocarbons on the international market, operating costs including payments for crude,” Soraz’s statement said.
“Soraz never made any secret of his legitimate desire to be able to market its products,” it said.
Last week, the state company that sells Soraz products said the refinery had built up six to eight months of arrears to CNPC-Agadem. An oil workers union says those debts amount to 100 billion CFA francs ($171.78 million).
The refinery resumed production last week after a 45-day shutdown due to a mechanical failure.
The refinery’s production has never reached its full capacity, oscillating between 12,000 and 16,000 barrels a day.
Under the terms of the agreement between CNPC and Niger, 7,000 barrels a day are reserved for the domestic market, with the rest available for export.