The woes of Morocco’s sole refinery
Casablanca - Morocco’s sole oil refinery Société Anonyme Marocaine de l’Industrie du Raffinage (Samir) is locally bearing the brunt of low global oil prices, with the Moroccan government insisting it will not give in to the debt-laden company’s pressure.
Samir’s accumulated debt to the government reached $133 million prompting the seizure of its assets by Morocco’s tax administration over unpaid taxes. Rabat said August 19th that it would spare no effort to recover unpaid taxes and protect the oil refinery’s workers.
The government’s statement came a day after the Samir’s parent company Corral Petroleum Chief Executive Officer Sheikh Mohammed Hussein al-Amoudi held meetings with the Moroccan government to find ways to save the country’s only refinery from collapse.
Amoudi met the ministers of energy, interior and finance in Rabat on August 18th over the financial difficulties of Samir, which had a total debt of more than $2.45 billion at the end of 2014.
Amoudi proposed $150 million of capital injection into Samir but the three ministers asked for ten times the suggested amount to offset the refinery’s mounting debt.
The ministers stressed their rejection of any form of blackmail over the country’s energy security, calling on Amoudi to honour the company’s debt to the Moroccan government.
Minister of General Affairs and Governance Mohamed el-Ouafa said the Moroccan government would not intervene to save Samir because it would be against Moroccans’ interest.
Samir posted a record consolidated net loss of $257 million in 2014, mainly because of inventory revaluation following the fall of oil prices.
The oil refinery announced in August that it would halt production at Mohammedia refinery, which produces about 200,000 barrels per day, two-thirds of Morocco’s oil consumption.
Sales of Samir’s shares, which have shed about 50% of their value in 2015, were suspended on the Casablanca stock exchange on August 6th by Morocco’s financial markets watchdog, Conseil Déontologique des Valeurs Mobilières. This came after the company announced it was halting production.
According to data from the US Energy Information Administration, Morocco is Africa’s fifth largest oil consumer. The closure of Morocco’s sole refinery would force the country to fully import oil to meet demand.
The government said it had taken all the appropriate measures to ensure enough supplies to the market.