The woes of Morocco’s sole refinery

Friday 28/08/2015
Mounting woes.

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.